CarMax Inc., the largest used car retailer in the U.S., saw its shares tumble 24% on Thursday after announcing a disappointing preliminary outlook for its third fiscal quarter and the unexpected resignation of its longtime CEO, Bill Nash. The dual blow has raised concerns about the company’s leadership stability and its ability to regain footing in a turbulent used car market.
Leadership Shake-Up at the Top
In a surprise move, CarMax said Nash would be stepping down as chief executive officer effective December 1. The board has appointed David McCreight, a veteran retail executive with stints as CEO of Lulu’s Fashion Lounge Holdings and president of Urban Outfitters Inc., as interim CEO while a search for a permanent replacement begins.
Adding to the transition, former CEO and current chair Tom Folliard will step in as interim executive chair. Folliard, who led CarMax from 2006 to 2016, emphasized that the leadership changes were designed to restore confidence and operational discipline.
“The Board has decided that more direct involvement from David and me will help strengthen the business in this transitional period,” Folliard said in a statement. “We’re focused on driving sales, enhancing profitability, and reducing costs. Recent results don’t reflect our potential, and change is needed.”
Weak Forecast Deepens Investor Concerns
Alongside the leadership announcement, CarMax issued a preliminary outlook that painted a bleak picture of current operations. The company expects comparable store used unit sales to decline between 8% and 12% for the third fiscal quarter.
Earnings per diluted share are projected to fall between 18 cents and 36 cents, a sharp drop compared with the same period last year. This forecast includes approximately 9 cents in non-recurring charges tied to leadership changes and workforce reductions.
Analysts quickly reacted to the news. Investment firm William Blair downgraded CarMax shares from “outperform” to “market perform,” citing uncertainty around management transitions and the company’s deteriorating fundamentals.
Struggling to Compete in a Shifting Market
CarMax has had a rough 2025. The stock is down nearly 50% year-to-date, even as competitors such as Carvana have surged ahead. Carvana’s shares are up 52% this year, buoyed by cost-cutting measures and strong digital sales momentum areas where CarMax has struggled to keep pace.
On a September earnings call, Nash acknowledged that results had “fallen short” of both internal and Wall Street expectations. The company reported declines across nearly all major metrics, including total sales, gross profit, and net income. Those results triggered a wave of analyst downgrades and a $24 price target cut by Morgan Stanley.
Looking Ahead
CarMax’s upcoming quarterly earnings report, scheduled for December 18, will be closely watched by investors seeking signs of stabilization under new leadership.
The company’s interim executives face the challenge of rebuilding momentum in a used car market that’s becoming increasingly competitive and price-sensitive. Rising financing costs, inventory imbalances, and cautious consumers have all contributed to a sector slowdown.
Still, with two experienced leaders temporarily at the helm, CarMax hopes to steady its operations and chart a clearer path forward. Whether that’s enough to restore investor faith remains to be seen, but after Thursday’s market reaction, expectations couldn’t be much lower.
