CarMax, Inc. (KMX) Faces Securities Class Action Amid Problems with Q2 Growth, Unexpected $142 Million Loss Provision -- Hagens Berman
CarMax, Inc. (KMX) Faces Securities Class Action Amid Problems with Q2 Growth, Unexpected $142 Million Loss Provision -- Hagens Berman |
| [05-November-2025] |
SAN FRANCISCO, Nov. 5, 2025 /PRNewswire/ -- A securities fraud class action, styled Cap v. CarMax, Inc., et al., No.1:25-cv-03602-JKB (D. Md.) seeks to represent investors who purchased or otherwise acquired publicly traded CarMax, Inc. (NYSE: KMX) securities between June 20, 2025 and September 24, 2025.
The lawsuit follows a sharp sell-off on September 25, 2025, with the stock plummeting nearly 20% following the release of its second-quarter 2026 financial results. The catalyst for the decline was a surprise fall in the company's net EPS which was accompanied by a surge in the provision for loan losses within the company's CarMax Auto Finance (CAF) segment, its in-house financing arm. This development and severe market reaction has prompted national shareholders rights firm Hagens Berman to investigate the alleged claims against CarMax, including whether CarMax may intentionally have misled investors about the strength of its business model and trends adversely affecting its financial performance. The firm urges investors in CarMax who suffered significant losses to submit your losses now. The firm also encourages persons with knowledge who may be able to assist in the investigation to contact its attorneys. Class Period: June 20, 2025 – Sept. 24, 2025 CarMax, Inc. (KMX) Securities Class Action: The litigation is focused on the propriety of CarMax's disclosures about the strength of its business model and growth prospects. More specifically, on June 20, 2025, CarMax touted double digit Q1 2026 EPS growth and assured investors that "a fragmented market that positions us to continue to drive sales, gain market share, and deliver year-over-year earnings growth for years to come." The complaint alleges that CarMax misled investors about its prospects, was in no position to assure investors of earnings growth for years to come, and failed to disclose that its Q1 2026 results were positive because of consumers' pulling forward their car purchases to avoid tariffs. Investors allegedly learned the truth on September 25, 2025. That day, CarMax reported dismal Q2 2026 financial results. Year-over-year, the company's net EPS fell a whopping 24%, retail used unit sales fell 5.4%, and comparable store used unit sales fell 6.3%. In addition, questions arose about the quality of CAF's loan portfolio. The company reported that CAF's revenue declined 11.02% year-over-year due to a $142 million loan loss provision even though management had previously assured investors that "we feel good about our reserve[.]" This figure represents a sequential increase of nearly 40% and a year-over-year jump of approximately 24%. The news sent CarMax shares falling by $11.45 on that day, a decline of roughly 20%. "We're focused on investors' losses and whether CarMax may have intentionally misled investors about the strength of its business model, actual growth prospects, and the quality of the CAF portfolio," said Reed Kathrein, the Hagens Berman partner leading the firm's investigation. If you invested in CarMax and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now » If you'd like more information and answers to frequently asked questions about the CarMax case and our investigation, read more » Whistleblowers: Persons with non-public information regarding CarMax should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email KMX@hbsslaw.com. About Hagens Berman
SOURCE Hagens Berman Sobol Shapiro LLP | ||
Company Codes: NYSE:KMX |
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