CarMax, Inc. Faces Turbulence After Shocking $142 Million Loss Strikes Investor Confidence
CarMax's Recent Financial Woes
CarMax, Inc. (KMX), the well-known vehicle retailer, recently faced a tumultuous period in the stock market, with shares plunging nearly 20% on September 25, 2025. This significant dip was triggered by an unexpected announcement regarding a startling $142 million provision for loan losses within its CarMax Auto Finance (CAF) segment, which provides in-house financing solutions for vehicle purchases. The announcement has led to heightened scrutiny from investors and has prompted Hagens Berman, a national shareholders rights firm, to initiate an investigation into the company’s disclosures regarding the quality of CAF's loan portfolio.
The Fallout from the Financial Report
The sharp decline in CarMax's stock price raised alarm bells among shareholders, as the figure represented a staggering sequential increase of nearly 40% in loan loss provisions compared to prior reports. This increase was further compounded by statements made during the first quarter earnings call back in June, where management assured investors that the company's provisions for loan losses would likely not escalate further, labeling the previous quarter's provision as
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