CarMax, Inc. (KMX) Securities Class Action Lawsuit Filed [November 7, 2025]

Introduction to CarMax, Inc. (KMX) Securities Class Action Lawsuit

A securities fraud class action has been filed against CarMax, Inc. (NYSE: KMX) covering June 20, 2025 through September 24, 2025, inclusive. Investors allege the company overstated its growth prospects, presenting momentum in early fiscal 2026 as durable when it was tied to temporary buying driven by tariff speculation. The complaint says management highlighted consecutive positive comps and the ability to "deliver significant year-over-year earnings growth for years to come," but later acknowledged the prior uptick was due to tariff chatter and that inventory depreciation followed. When CarMax reported second-quarter fiscal 2026 results on September 25, 2025 and discussed the tariff-driven surge and ensuing headwinds, the market reacted sharply. Investors absorbed steep declines as the stock fell more than 20% in one day and continued lower the next session.

CarMax, Inc. (KMX) Securities Lawsuit Case Details

Case Name: Cap v. CarMax, Inc., et al.
Case No.: 1:25-cv-03602-JKB
Jurisdiction: U.S. District Court, District of Maryland
Filed on: November 3, 2025

CarMax, Inc. (KMX) Company Profile

CarMax sells used cars and describes itself as the nation's largest retailer of used vehicles, operating across multiple locations in this judicial district. The company's business includes used car sales and wholesale operations and is headquartered in Richmond, Virginia.

CarMax, Inc. (KMX) Securities Lawsuit Class Period

June 20, 2025–September 24, 2025, inclusive.

All persons other than defendants who acquired CarMax securities publicly traded on the NYSE during the Class Period, and who were damaged thereby (the "Class"). Excluded from the Class are Defendants, the officers and directors of the Company, members of the Individual Defendants' immediate families and their legal representatives, heirs, successors or assigns and any entity in which Defendants have or had a controlling interest. These investors may be eligible to join the CarMax, Inc. (KMX) class action lawsuit.

Allegations in the CarMax, Inc. (KMX) Securities Class Action Lawsuit

According to the complaint, CarMax, Inc., its Chief Executive Officer William D. Nash, and its Chief Financial Officer Enrique N. Mayor-Mora allegedly overstated the company's growth trajectory during fiscal 2026. Investors allege the defendants portrayed a durable earnings growth model and a strong outlook, while the company's early-quarter strength was actually boosted by customer purchases tied to tariff speculation rather than sustainable demand.

On June 20, 2025, CarMax issued a press release announcing Q1 FY 2026 results. In that release, Nash stated, "[w]e delivered our fourth consecutive quarter of positive retail comps and double-digit year-over-year earnings per share growth," and said these results highlighted the strength of CarMax's model and positioned the company "to continue to drive sales, gain market share, and deliver significant year-over-year earnings growth for years to come." On the Q1 FY 2026 earnings call that day, Nash reinforced the message, saying, "we feel great about the rest of the year… we would expect to grow sales and gain share this year," adding "there's nothing that's changed that outlook." Also on the Q1 FY 2026 earnings call, Mayor-Mora emphasized efficiency gains, explaining that CarMax had "levered SG&A almost 700 basis points this quarter," which he described as illustrative of the power of the company's model.

On September 25, 2025, CarMax issued a press release reporting Q2 FY 2026 results. Later that day on the earnings call, Nash acknowledged that during the Q1 call he had noted an uptick in sales volume in March and April due to tariff speculation and explained how that surge affected Q2 performance through inventory decisions and depreciation.

The complaint alleges that throughout this period defendants recklessly overstated CarMax's growth prospects when, in reality, the earlier growth in fiscal 2026 was a temporary benefit from customers buying cars due to speculation regarding tariffs. As a result, investors allege that statements about the company's business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at the time they were made.

The Truth Emerges

The truth emerged on September 25, 2025. Before market hours, CarMax reported Q2 FY 2026 results showing that retail unit sales decreased 5.4%, comparable store unit sales decreased 6.3%, and wholesale units decreased 2.2%, with net earnings per diluted share of $0.64 versus $0.85 a year earlier. On the earnings call the same day, Nash stated that the Q1 sales uptick had been driven by tariff speculation and explained that CarMax ramped inventory ahead of the second quarter and then saw about $1,000 in depreciation across the back half of May through the end of June, which negatively impacted price competitiveness and sales.

According to the complaint, these disclosures were inconsistent with and allegedly undermined prior assurances of sustainable growth and confidence in the rest of the year. These disclosures linked the prior strength to a temporary, tariff-driven surge and described headwinds—an inventory ramp and about $1,000 in depreciation—that negatively affected price competitiveness and sales.

Market Reaction

The market reacted the same day. On September 25, 2025, after the before-market press release and ensuing call, CarMax's stock fell $11.5 per share, or 20.07%, to close at $45.60 per share. The decline continued the next day, September 26, 2025, when the stock fell a further 1.62% to close at $44.86.

Across two trading sessions, investors absorbed a sharp repricing tied directly to the company's second-quarter results and management's explanation that the prior quarter's strength had been driven by tariff speculation and followed by inventory depreciation.

Next Steps

• Submissions for lead plaintiff are due: December 29, 2025.
• The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.
• The Court will then consider motion for class certification.
• The Court will later consider a Motion to Dismiss.

To learn if you are eligible for recovery under the KMX securities class action lawsuit, visit the case submission page here. 

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.