CarMax Shares Drop 16% Despite Earnings Beat On Goodwill Impairment

CarMax (NYSE: KMX) reported quarterly results that exceeded analyst expectations, but shares plunged more than 16% intraday Tuesday after the company recorded a significant goodwill impairment charge.
The used-vehicle retailer posted earnings of $0.34 per share for the fourth quarter of fiscal 2026, beating the consensus estimate of $0.18. Revenue reached $5.95 billion, ahead of expectations of $5.65 billion.
During the quarter, the company recognized a $141.3 million goodwill impairment, which it attributed to a substantial decline in its market capitalization, weaker financial performance during fiscal 2026, and downward revisions to its long-term outlook.
Retail used vehicle unit sales declined 0.8% year over year to 181,188 units, while comparable store sales fell 1.9%. Average retail selling prices decreased by approximately $110 per vehicle. Wholesale unit sales increased 3.0% to 122,781 units, though wholesale revenue slipped 0.1% as average prices declined by roughly $270 per unit.
Total combined retail and wholesale unit volume rose modestly by 0.7% to 303,969 units.
Looking ahead, CarMax stated that it planned to open four new retail stores and four additional reconditioning and auction facilities in fiscal 2027, with capital expenditures projected at approximately $400 million.