CarMax Inc (NYSE:KMX) shares fell sharply despite posting an earnings and revenue beat, as underlying sales trends showed signs of softness.

Weak used-vehicle demand and margin pressure overshadowed the headline strength, dragging investor sentiment lower.

Quarterly Performance Details

The company reported fourth-quarter adjusted earnings per share of 34 cents, beating the analyst consensus estimate of 21 cents. Quarterly sales of $5.946 billion outpaced the Street view of $5.681 billion.

Combined retail and wholesale used vehicle unit sales were 303,969, an increase of 0.7% from the prior year's fourth quarter.

Retail used unit sales fell 0.8%, while comparable store used unit sales dropped 1.9%.

CarMax Auto Finance income decreased 9.8% to $143.7 million, driven by lower total interest margin resulting from a decline in auto loans outstanding following the $900 million non‑prime securitization in the third quarter.

Total gross profit was $605.3 million, down 9.4% versus last year's fourth quarter. Retail used vehicle gross profit decreased 9.6%. Quarterly gross profit per retail used unit was $2,115, down $207 from last year's record fourth quarter. The decline reflects pricing actions taken to improve sales trends.

The company said it purchased 270,000 vehicles from consumers and dealers, marking a 0.4% increase.

During the fourth quarter of fiscal 2026, the firm opened one new store location in Florence, Kentucky and one stand-alone reconditioning/auction center located in Frederick, Maryland.

As of Feb 28, the firm had cash and equivalents worth $122.83 million, significantly lower than $246.96 million in the year-ago period.

Outlook

CarMax said it plans to open four new stores, two stand-alone reconditioning and auction centers, and two stand-alone auction facilities in fiscal 2027, with capital expenditures of about $400 million to support long-term growth.

KMX Price Action: CarMax shares are trading lower by 16.14% to $41.16 at last check on Tuesday.

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