CarMax Faces Class Action Lawsuit Over Tariff-Linked Growth Claims

2025-11-04 companies

Richmond, Tuesday, 4 November 2025.
A lawsuit alleges CarMax overstated growth potential linked to tariffs, leading to investor losses after missed earnings and declines.

Background of the Lawsuit

A class action lawsuit has been filed against CarMax, Inc. (NYSE: KMX) alleging that the company overstated its growth potential related to tariffs, which subsequently led to missed earnings estimates and significant financial losses for investors. The lawsuit was officially lodged on November 3, 2025, in the United States District Court for the District of Maryland [1][3][5].

Timeline and Financial Performance

The class period for the lawsuit spans from June 20, 2025, to September 24, 2025. During this time, CarMax reported a 6.0% decline in revenue and a 5.6% drop in total gross profit, largely attributed to inventory adjustments and increased loan loss provisions [1][3]. On September 25, 2025, the company’s stock fell by 20.1%, closing at $45.60 per share following the disappointing financial disclosures [5][6].

Legal and Investor Reactions

In response to the financial downturn, several law firms, including Rosen Law Firm and Robbins Geller Rudman & Dowd LLP, have filed lawsuits on behalf of affected investors. These lawsuits claim that CarMax’s executives made materially false statements regarding growth prospects, misleading investors about the impact of tariffs [2][4][5]. Investors have until January 2, 2026, to apply to be the lead plaintiff in the case [1][2].

Broader Implications

The legal actions against CarMax highlight growing concerns over transparency and accuracy in corporate growth projections, particularly in the automotive sector. The outcome of these cases could influence future regulatory scrutiny and investor confidence in companies that rely heavily on macroeconomic factors, such as tariffs, for their business strategies [3][6].

Sources

lawsuit CarMax