CarMax shares fall 7% despite earnings beat, sector worries

Shares of CarMax fell sharply on Wednesday, June 17, 2026, despite the used-car retailer reporting quarterly earnings and revenue that significantly exceeded analyst expectations. The stock closed down approximately 7%, a decline mirrored by rival Carvana in a sector-wide selloff driven by concerns over shrinking profit margins and credit quality.

For its fiscal first quarter ended May 31, CarMax reported adjusted earnings per share of $1.31, surpassing the consensus estimate of approximately $0.94. Revenue rose 6.2% year-over-year to $8.01 billion, also beating forecasts. However, net earnings fell 12% to $185.6 million.

Investors focused on underlying pressures that overshadowed the headline beats. The retail gross profit per used vehicle fell by $230 from the prior year to $2,177, which the company attributed to deliberate price cuts aimed at stimulating sales. Comparable-store used unit sales declined 0.8%, indicating soft underlying demand. Furthermore, the allowance for loan losses at CarMax Auto Finance increased, with income from the unit slipping to $140.2 million.

This was the first quarterly report under new CEO Keith Barr, who assumed the role in March. In a...