CarMax (NYSE:KMX) reported fourth-quarter results that exceeded analyst expectations, but the stock declined after the company disclosed a $141.3 million goodwill impairment.
Shares dropped more than 6% in premarket trading Tuesday.
The used-car retailer posted earnings of $0.34 per share for the fourth quarter of fiscal 2026, ahead of the $0.18 consensus estimate. Revenue came in at $5.95 billion, also above expectations of $5.65 billion.
The goodwill charge taken during the quarter was attributed to a significant decline in CarMax’s market capitalization, weaker financial performance throughout fiscal 2026, and a downward revision to its long-term outlook, the company said.
Retail used vehicle sales edged down 0.8% year-over-year to 181,188 units, with comparable store sales declining 1.9%. Average retail selling prices fell by about $110 per vehicle. Wholesale unit sales rose 3.0% to 122,781, although wholesale revenue slipped 0.1% due to a roughly $270 drop in average prices.
Total combined retail and wholesale volume was largely unchanged, rising just 0.7% to 303,969 units.
“We are moving with urgency to improve execution, drive efficiencies, and sharpen our customer offering,” said Keith Barr, President and CEO. “We will make CarMax the obvious choice for customers through competitive pricing, access to a large selection of high-quality vehicles, and an exceptional end-to-end customer experience.”
Looking ahead to fiscal 2027, CarMax plans to open four new stores and add four reconditioning and auction facilities, with capital spending expected to reach approximately $400 million.