CarMax Faces Near-Term Pressure from Earnings Shortfalls and Tariff Impacts

about 1 month ago

Tom Keen

"CarMax (KMX) is down as much as 13% after posting big earnings per share and sales shortfalls in the second quarter. The decline is attributed to customers rushing to purchase cars ahead of 25% import tariffs, leading to a subsequent drop, along with a decrease in CarMax Auto Finance income by more than 11% and an increased provision for loan losses."

CarMax (KMX) experienced a significant price drop (down 13%) driven by a temporary surge in sales ahead of anticipated tariffs, which subsequently led to a correction. Additionally, deteriorating loan performance in its finance division adds to the near-term headwinds, suggesting potential caution for investors in the short term.

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