Carmax Inc (NYSE:KMX) stock plunges 21.33% (As on September 25, 11:29:31 AM UTC-4, Source: Google Finance) after the company after the group reported lower-than-expected results, confirming the ongoing difficulties in the used car market. The company described it as a “challenging” quarter, marked by macroeconomic pressures and weaker demand. Performance deteriorated significantly, with total vehicle sales down 4.1%. Further, CarMax reported a drop in second-quarter profit, as excess inventory build up, depreciation costs and fall in used-vehicle prices hammered its margins. CarMax reported a net profit of $95.4 million, or 64 cents per share, for the quarter ended August 31, compared with $133 million, or 85 cents per share, in the year-ago period. The used-car retailer, whose shares hit a five-year low, said its results were impacted by a pull-forward in demand earlier this year and a sharp rise in vehicle depreciation that hurt pricing power. CEO Bill Nash said the company had ramped up inventory following stronger sales in March and April amid tariff speculation, but saw about $1,000 in depreciation per vehicle from mid-May through June, pressuring margins and sales. To offset the impact, CarMax said it cut retail margins to spur demand and deliberately slowed purchases to better align inventory with sales. CarMax sold 199,729 units of used vehicles in the June-to-August period, down 5.4% from a year ago, while sales of wholesale vehicles also fell 2.2% year-over-year.

Moreover, the company has launched a new brand positioning campaign in late August. The new “Wanna Drive?” tagline brings the omni-channel experience to life and emphasizes that CarMax customers are empowered to buy their way, with clarity, confidence and control.

KMX in the second quarter of FY 26 has reported the adjusted earnings per share of 99 cents, missing the analysts’ estimates for the adjusted earnings per share of $1.05, according to data compiled by LSEG. The company had reported the adjusted revenue decline of 6 percent to $6.6 billion in the second quarter of FY 26, beating the analysts’ estimates for revenue of $7.02 billion. Solid unit margins with gross profit per retail used unit of $2,216, gross profit per wholesale unit of $993, and Extended Protection Plans (EPP) margin per retail unit of $576, all in line with the prior year’s second quarter. CarMax Auto Finance (CAF) income decreased 11.2% to $102.6 million as an increase in the provision for loan losses outweighed growth in the net interest margin percentage.