You know, the more I think about it… I haven’t seen the Carfox on TV in a while. Maybe he saw this mess coming…

I never thought I’d see the day that CarMax, the nation’s largest used-car retailer, would be getting smoked like a Texas brisket by a car vending machine… but that’s the sad reality for Mr. Carfox. The stock is getting sold for scraps (-20%) after Bill Nash, a man who’s been at the company for 30 years and CEO since 2016, decided to step out of the kitchen midfire.

Don’t think the guy’s that important, a huge reason for the crashout is Carfox and friends, dropped a disgusting outlook for the current quarter: comparable-store used vehicle sales are expected to drop 8-12%, and earnings could sputter to as low as 18 cents a share (down from $1.01 last year). Say it with me now: “Damn, that’s bad!.”

(Source: Wall Street Journal)

But have no fear guys… board member David McCreight, a retail guy who used to run Urban Outfitters and Lulu’s Fashion Lounge, is stepping in as interim CEO. Nothing says “we can fix a used-car empire” quite like experience selling crop tops to 25 year old IG models.

And for some extra nostalgia, former CEO Tom Folliard is rolling back into the driver’s seat as executive chair, as he acknowledged that “change is needed.” The numbers are downright embarrassing. Carvana’s stock is up 52% this year, while CarMax has crashed 50%.

As if the stock chart isn’t already evidence… Wall Street’s done waiting. William Blair (one of the last analysts still holding out hope for the used-car king) finally threw in the towel and downgraded the stock, while Morgan Stanley already took a wrench to its price target earlier this year, chopping it by $24.

Now we’re one more bad selloff away from investors asking the real question: does CarMax’s whole “trust-based dealership” model even make sense in a world run by algorithms, instant approvals, and one-click financing? (I think we already know the answer).

The company reports again on December 18, and unless McCreight can somehow convince people that wandering a parking lot full of Kias is more fulfilling than shopping online without pants, CarMax will be walking the halls of bankruptcy court very soon.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.