Leadership Shakeup at CarMax: Interim CEO Named as Company Projects 8-12% Sales Decline for Q3 Fiscal 2026
Board Signals Shift with Interim CEO Appointment Amid Search for New Leadership
CarMax, the nation’s largest used car retailer, has announced significant changes at the top. David McCreight, a board member and experienced retail executive, will serve as Interim President and CEO starting December 1, 2025. At the same time, Tom Folliard—CarMax’s long-serving chair and former CEO—will become Interim Executive Chair of the Board. This leadership reshuffle follows the departure of CEO Bill Nash and is accompanied by a continued search for a permanent chief executive, assisted by Russell Reynolds Associates.
Leadership Transition to Focus on Strengthening Sales, Profitability, and Cost Efficiency
Both McCreight and Folliard bring extensive retail and brand management backgrounds to their interim roles. McCreight’s previous stints leading omni-channel and brand turnarounds at Lulu’s Fashion Lounge, Urban Outfitters, and Anthropologie, coupled with Folliard’s three-decade tenure guiding CarMax’s national growth, suggest the company is leaning on trusted hands during a transitional phase. The stated priority: boost sales, enhance profitability, and trim costs while searching for a long-term leader.
CarMax Forecasts 8-12% Drop in Comparable Store Sales for Q3 2026
Accompanying the executive changes is a preliminary financial outlook that reveals ongoing challenges for the retailer. For the third fiscal quarter ending November 30, 2025, CarMax projects:
| Metric | Preliminary Outlook Q3 FY26 |
|---|---|
| Comparable Store Used Unit Sales | -8% to -12% |
| Net Earnings per Diluted Share | $0.18 to $0.36* |
*Includes approximately $0.09 in non-recurring expenses tied to leadership change and workforce reductions.
The drop in sales comes amid lower retail unit demand, sharp wholesale market depreciation, and an expected rise in marketing costs as CarMax launches new brand positioning. However, the company noted that loan loss provisions at CarMax Auto Finance remain on track with earlier forecasts, offering a slight silver lining.
What’s Driving These Results? Industry Pressures and Internal Investment
CarMax’s current performance mirrors ongoing headwinds in the auto retail sector: higher interest rates, volatile wholesale prices, and shifting consumer habits. The increased marketing spend, a key reason for margin pressure this quarter, reflects an aggressive push to revitalize CarMax’s brand and reach more customers, even as foot traffic and unit sales soften. Company leadership framed these efforts as necessary for future growth, albeit at the cost of short-term profit.
Investor Takeaways: Watching for Turnaround or Further Turbulence
For investors, CarMax’s leadership transition and cautious outlook set the stage for a pivotal period. The new interim team’s mandate is clear—stabilize sales, restore margins, and execute on brand investment, while the Board searches for a CEO to drive CarMax’s next chapter. As the company approaches its Q3 fiscal results announcement on December 18, 2025, market watchers will be keenly focused on sales trends, cost discipline, and progress on executive recruitment.
With almost 790,000 used cars sold and $8 billion in loan originations last fiscal year, CarMax remains a giant in used car retail. The coming quarters will test whether this leadership shuffle can reverse recent declines and reinvigorate long-term growth.
Key Executive Backgrounds: Experience in Turnarounds and Brand Growth
| Executive | Experience |
|---|---|
| David McCreight | Ex-CEO at Lulu's, former President at Urban Outfitters and Under Armour, led digital and omni-channel growth initiatives, Board member at Victoria’s Secret. |
| Tom Folliard | Over 30 years at CarMax; CEO 2006–2016; led company’s expansion as a national brand and serves as Non-Executive Chair since 2016. |
Investors and market watchers will look to see whether the leadership team’s retail pedigree and focus on operational discipline can guide CarMax through its latest period of uncertainty.
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