Here's Why CarMax Shares Slumped This Week

By Lee Samaha – Apr 17, 2026 at 7:03AM ESTKey PointsLower vehicle prices drove slight unit sales growth but reduced gross profit.New CEO plans $200 million in expense reductions for fiscal 2027, and structure the company to deal with the trading environment. CarMax (KMX 0.05%) shares declined 13.3% in the week to Friday morning. The decline came after a disappointing fourth-quarter 2026 earnings report released earlier in the week. Challenging end markets CarMax has a new CEO in place, and Keith Barr (appointed in mid-March) faces an immediate challenge in dealing with difficult end markets. The consumer automotive market is price-sensitive at the moment, and, as many automakers found out last year, it's moving toward lower-priced models. ExpandNYSE: KMXCarMaxToday's Change(-0.05%) $-0.02Current Price$40.49Key Data PointsMarket Cap$5.7BDay's Range$39.65 - $41.8752wk Range$30.26 - $71.99Volume1.7KAvg Vol3.5MGross Margin10.69% That observation holds for new cars and the kind of used cars that CarMax sells. Consequently, CarMax sought to lower the average selling price of its vehicles to drive volume growth. CFO Enrique Mayor-Mora discussed the matter on the earnings call and disclosed that of the three levers (increased marketing, better online selling capability, and lower prices) the company pulled to drive 0.7% unit sales growth in the quarter, "we do believe that our lower pricing had the biggest impact on the quarter." The result was a drop in average selling prices of used vehicles (down 0.4% to $26,019) and wholesale vehicle prices (down 3.3% to $7,776), but a combined (used and wholesale). Unfortunately, the mix led to a lower gross profit of $605.3 million in the quarter, down 9.4% from the same quarter of last year. Image source: Getty Images. Where next for CarMax There isn't a lot the company can do about its end markets. Still, it can restructure to better deal with them, and Barr's plans reduce expenses by $200 million in its fiscal 2027, which makes sense, not least as it will help the company deal with margin challenges coming from having to lower prices. In addition, management announced it had bought relatively more used cars from consumers than from dealers, which should help profitability.In short, it's a game of blocking and tackling as the company navigates a difficult trading environment. Read NextApr 14, 2026 •By Rich SmithWhy CarMax Stock Just CrashedApr 4, 2026 •By Catie HoganShould You Buy CarMax While It's Below $45?Apr 17, 2026 •By Adria CiminoPrediction: This Under-the-Radar E-Commerce Stock is Set to SoarApr 16, 2026 •By Daniel SparksNetflix Stock Is Down, and It Could Get Worse. Here's Why Shares Could Fall Even More.Apr 16, 2026 •By Geoffrey SeilerBull vs. Bear: Is Amazon Stock a Buy or Sell?Apr 17, 2026 •By Will Ebiefung3 Reasons to Avoid SpaceX Stock When It IPOsAbout the AuthorLee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. Prior to The Motley Fool, Lee was a Civil Engineer and Investment Manager. He holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment. Lee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community.TMFSaintGermainX@LeeSamahaStocks MentionedCarMaxNYSE: KMX$40.49(-0.05%)-$0.02*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.