CarMax stock falls about 10% as CEO steps down, releases outlook
A CarMax dealership in Santa Rosa, California, on April 11, 2023.
Justin Sullivan | Getty Images
DETROIT – Shares CarMax Inc. It fell nearly 10% during premarket trading Thursday after the used-car retailer announced a weak outlook for its current fiscal quarter and said CEO Bill Nash would unexpectedly resign.
The preliminary outlook for the third fiscal quarter includes an 8% to 12% decline in comparable store used unit sales and diluted net earnings per share of 18 cents to 36 cents, of which 9 cents are non-recurring expenses primarily related to leadership change and other workforce reductions.
As for the CEO, the company said Board member David McCreight served as retail apparel executive and CEO. Lulu’s Fashion Salon Holdings and the president Urban Outfitters Inc.will replace Nash on an interim basis until a permanent replacement is found.
CarMax also said President Tom Folliard, an executive with a 30-year history with the company who served as CEO from 2006 to 2016, has been named interim executive chairman.
“The board determined that more direct involvement from David and I would help strengthen the business during this transition period. During this time we are focused on growing sales, improving profitability and reducing cost,” Folliard said in a statement, adding that the company’s recent results “do not reflect this potential and change is needed.”
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According to CarMax, the announced changes will be effective as of December 1.
In conjunction with the announced changes and outlook, William Blair downgraded CarMax shares from outperform to market perform.
CarMax has struggled this year, with its share price falling roughly 50% in 2025. That compares with the double-digit rise of other auto retailers’ stocks, including online used car retailer Carvana’s 52% gain this year.
In CarMax’s most recent quarterly earnings call in September, Nash admitted that results “fell short” of both the company’s and Wall Street’s expectations. The results included notable declines in nearly all major earnings, including sales, net earnings and gross profit.
The September results led to a significant decline in the company’s shares and negative reactions from analysts, including a $24 price cut from Morgan Stanley.
CarMax is scheduled to report its current fiscal quarter results on December 18.
