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CarMax reports quarterly loss due to weak demand for used cars and goodwill charges

CarMax, a retailer of used cars, reported a?loss for the fourth quarter on Tuesday. This was due to a goodwill impairment charge and declining margins.

In premarket trading, shares of the Richmond-based Virginia company fell 6.8%.

Used-car dealers have struggled to sell inventory at a profit, as consumer demand has weakened and import tariffs have squeezed margins.

CarMax's gross profit on a used vehicle dropped to $2,115 during the third quarter from $2,322 one year ago. Wholesale gross profit per unit dropped to $940, down from $1,045?a year earlier, as the company cut prices to increase demand.

The new CEO Keith Barr stated that the largest U.S. Used-Car retailer is moving with "urgency" in order to improve efficiency and regain sales momentum.

Gasoline prices are nearing $4 per gallon and have dampened consumer confidence. This has led to a reduction in spending, and a rise in interest in electric and hybrid cars that are more affordable.

CarMax reported that it had recorded a non-cash impairment charge of 141.3 million dollars in the third quarter. It cited a decline in its share price and a weaker performance fiscal 2026.

The company's quarterly revenue dropped 1% from $5.95 billion a year earlier.

CarMax posted a?loss? of $120.7million, or 85c per share. This compares to a profit?of $89.9million, or 58c per share?a year ago.

It earned a?quarterly profit of 34 cents, as compared to 64 cents last year. (Reporting from Nathan Gomes, Bengaluru. Editing by Tasim Zaid)

(source: Reuters)