CarMax Inc. (KMX) became the latest major U.S. company to shelve long-term financial targets, citing growing uncertainty around President Donald Trump’s escalating trade war.
The used-car giant removed the timelines associated with its multi-year growth objectives after posting disappointing fourth-quarter earnings that sent shares tumbling more than 19% on Thursday—its steepest intraday drop since September 2022.
The Richmond, Virginia-based company said macroeconomic volatility, especially the evolving tariff landscape, made it difficult to offer reliable projections. “Why put a target out there that’s really speculative not knowing exactly where this environment is going to go?” CEO Bill Nash told analysts on a conference call.
Just a year ago, CarMax aimed to reach more than 2 million in annual combined retail and wholesale sales by fiscal 2030, supported by revenue targets of $33 billion and a nationwide used-vehicle market share of over 5%. As of now, those benchmarks remain, but the timeline is on hold.
Earnings Miss Clouds Positive Retail Momentum
The retreat from long-term forecasting overshadowed modest fourth-quarter gains. CarMax reported earnings of $0.58 per share, missing Wall Street estimates by $0.07, while revenue rose 6.7% year-over-year to $6.0 billion—slightly ahead of consensus forecasts.
Retail sales improved, with unit volume rising 6.2% year-over-year to 182,655 vehicles and same-store sales growing 5.1%, up from 4.3% in Q3. Wholesale revenue also saw a 3.5% increase, though total unit sales across both channels fell short of analyst expectations.
CarMax attributed a soft February to the absence of last year’s Leap Day and delayed tax refunds, but noted a rebound in March and early April. “We saw comps accelerate in early April,” said Nash, highlighting growing consumer interest—especially in lightly used, late-model vehicles.
Despite the near-term boost, the guidance change spooked investors, with CarMax shares down more than 16% shortly after the opening bell. Analysts noted that the stock’s drop was likely driven more by the scrapping of growth timelines than the earnings miss itself.
Tariffs Could Boost Demand and Costs in Tandem
While the near-term outlook remains positive, the macro backdrop continues to complicate strategy. Trump’s 25% tariffs on automotive imports remain in place despite a broader 90-day pause on many other levies. That policy shift is expected to sharply increase prices for new vehicles, pushing consumers toward used alternatives—potentially benefitting CarMax.
“We’re seeing a lot of interest in used cars right now,” Nash said, pointing to the company’s first year-over-year increase in average selling prices in more than two years. He suggested that rising new car prices could widen the value gap, supporting CarMax’s sales trajectory.
But rising costs are a double-edged sword. Tariffs are also likely to increase expenses on the parts CarMax buys to refurbish used vehicles. The company said it's actively pursuing mitigation strategies to manage parts inflation.
The auto sector is widely expected to bear the brunt of Trump’s tariff regime. Analysts predict both new and used vehicles could become thousands of dollars more expensive. Companies like Delta Air Lines and Nintendo have also pulled or delayed guidance amid the policy shift.
CarMax’s market share, which declined in the first half of fiscal 2024, rebounded in the second half—especially for 0- to 4-year-old vehicles. Industry data shows the company’s share continued to grow in January, and CarMax remains confident about its positioning heading into fiscal 2026.
Still, with broader economic uncertainty and policy risks mounting, even market leaders are being forced to tread carefully. For CarMax, the road ahead remains profitable—but foggy.
The Richmond, Virginia-based company said macroeconomic volatility, especially the evolving tariff landscape, made it difficult to offer reliable projections. “Why put a target out there that’s really speculative not knowing exactly where this environment is going to go?” CEO Bill Nash told analysts on a conference call.
Just a year ago, CarMax aimed to reach more than 2 million in annual combined retail and wholesale sales by fiscal 2030, supported by revenue targets of $33 billion and a nationwide used-vehicle market share of over 5%. As of now, those benchmarks remain, but the timeline is on hold.
Earnings Miss Clouds Positive Retail Momentum
The retreat from long-term forecasting overshadowed modest fourth-quarter gains. CarMax reported earnings of $0.58 per share, missing Wall Street estimates by $0.07, while revenue rose 6.7% year-over-year to $6.0 billion—slightly ahead of consensus forecasts.
Retail sales improved, with unit volume rising 6.2% year-over-year to 182,655 vehicles and same-store sales growing 5.1%, up from 4.3% in Q3. Wholesale revenue also saw a 3.5% increase, though total unit sales across both channels fell short of analyst expectations.
CarMax attributed a soft February to the absence of last year’s Leap Day and delayed tax refunds, but noted a rebound in March and early April. “We saw comps accelerate in early April,” said Nash, highlighting growing consumer interest—especially in lightly used, late-model vehicles.
Despite the near-term boost, the guidance change spooked investors, with CarMax shares down more than 16% shortly after the opening bell. Analysts noted that the stock’s drop was likely driven more by the scrapping of growth timelines than the earnings miss itself.
Tariffs Could Boost Demand and Costs in Tandem
While the near-term outlook remains positive, the macro backdrop continues to complicate strategy. Trump’s 25% tariffs on automotive imports remain in place despite a broader 90-day pause on many other levies. That policy shift is expected to sharply increase prices for new vehicles, pushing consumers toward used alternatives—potentially benefitting CarMax.
“We’re seeing a lot of interest in used cars right now,” Nash said, pointing to the company’s first year-over-year increase in average selling prices in more than two years. He suggested that rising new car prices could widen the value gap, supporting CarMax’s sales trajectory.
But rising costs are a double-edged sword. Tariffs are also likely to increase expenses on the parts CarMax buys to refurbish used vehicles. The company said it's actively pursuing mitigation strategies to manage parts inflation.
The auto sector is widely expected to bear the brunt of Trump’s tariff regime. Analysts predict both new and used vehicles could become thousands of dollars more expensive. Companies like Delta Air Lines and Nintendo have also pulled or delayed guidance amid the policy shift.
CarMax’s market share, which declined in the first half of fiscal 2024, rebounded in the second half—especially for 0- to 4-year-old vehicles. Industry data shows the company’s share continued to grow in January, and CarMax remains confident about its positioning heading into fiscal 2026.
Still, with broader economic uncertainty and policy risks mounting, even market leaders are being forced to tread carefully. For CarMax, the road ahead remains profitable—but foggy.
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