CarMax Q4 Loss Hits $120.7M After Price Cuts, Shares Dive 13%
CarMax reported a $120.7 million fourth-quarter loss, or 85 cents per share, reversing from a $89.9 million profit a year earlier. The company lowered vehicle prices and cut hundreds of jobs, triggering a 13% share decline and contributing to a 37% drop in stock value over the past year.
1. Fourth-Quarter Loss and Share Slump
CarMax recorded a $120.7 million net loss, or $0.85 per share, in its fourth quarter, compared with a $89.9 million profit, or $0.58 per share, a year earlier. Shares fell over 13% on the day of the announcement and have declined 37% over the past year.
2. Price Cuts and Workforce Reduction
In December, CarMax lowered vehicle prices and eliminated hundreds of positions to narrow its average selling price gap with the broader market and attract more cost-sensitive buyers.
3. Activist Pressure and Dynamic Pricing Push
Starboard Value, which holds a $350 million stake, urged CarMax to adopt a real-time, data-driven pricing system with modest $100–$300 per vehicle adjustments to restore competitiveness during market volatility.