CarMax reported a fourth-quarter loss on Tuesday, citing a substantial non-cash goodwill impairment and weakening profitability in its used-vehicle operations. The Richmond, Virginia-based retailer recorded a net loss of $120.7 million, or 85 cents per share, compared with a year-ago profit of $89.9 million, or 58 cents per share.
The company recorded a non-cash goodwill impairment charge of $141.3 million during the quarter, which management attributed to a decline in CarMax's share price and weaker financial results in fiscal 2026. On an adjusted basis, the company reported quarterly earnings of 34 cents per share, down from 64 cents a year earlier.
Quarterly revenue fell 1% to $5.95 billion versus the prior year. CarMax said pressure across the used-car sector has complicated attempts to move inventory at profitable prices, as softer consumer demand and import tariffs constrict margins industry-wide.
Per-unit profitability showed notable declines. Retail gross profit per used vehicle decreased to $2,115 in the quarter, down from $2,322 a year ago. Wholesale gross profit per unit also fell, to $940 from $1,045 a year earlier, reflecting price reductions CarMax implemented to stimulate demand.
Shares of the company declined 6.8% in premarket trading following the results. New Chief Executive Officer Keith Barr said the largest U.S. used-car retailer is acting "with urgency" to boost efficiency and regain sales momentum.
CarMax highlighted several external factors weighing on consumer behavior. The ongoing conflict in Iran was cited as having a dampening effect on sentiment. With gasoline prices near $4 per gallon, some consumers have pared other spending and shown increased interest in more affordable electric and hybrid vehicles.
The company also noted that, amid the difficult market backdrop, it reduced prices to drive retail and wholesale demand, a move that contributed to the year-over-year erosion in per-unit gross profit.
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Bottom line: CarMax's latest quarter reflects the combined impact of a large goodwill write-down, weaker used-vehicle margins, and modest revenue contraction, prompting management to prioritize efficiency and sales recovery.