KMX · CarMax, Inc.

CarMax's fourth quarter results were significantly impacted by a $141.3 million non-cash goodwill impairment charge, driven by a decline in market capitalization, pressured financial performance during fiscal 2026, and downward revisions to the forecasted financial outlook. Excluding this impairment and $33.9 million in restructuring charges, adjusted net earnings per diluted share was $0.34. The company's operational performance showed mixed trends: combined retail and wholesale unit sales increased 0.7% to 303,969 vehicles, but retail used unit sales decreased 0.8% and comparable store used unit sales declined 1.9%. Gross profit per retail used unit declined $207 to $2,115, reflecting pricing actions implemented to drive improved sales trends. Wholesale units increased 3.0%, though gross profit per wholesale unit decreased $105 to $940. CarMax Auto Finance income decreased 9.8% to $143.7 million, reflecting a lower balance of auto loans outstanding following a $900 million non-prime securitization in the third quarter and an increase in the provision for loan losses related to CAF's expansion in the credit spectrum. Management has increased targeted SG&A reductions to $200 million in exit rate savings by the end of fiscal year 2027, up from the prior goal of $150 million, and took steps toward these savings with a reduction in corporate workforce. The company repurchased $50.4 million in shares during the quarter before pausing the program, with $1.31 billion remaining available under the authorization. For fiscal 2027, CarMax plans to open four new stores, two stand-alone reconditioning/auction centers, and two stand-alone auction facilities, with expected capital expenditures of approximately $400 million.