Carmax (KMX) risk factors, FY2026 10-K

BUSINESS RISKS

1. 01We operate in a highly competitive industry. Failure to develop and execute strategies to compete in the used vehicle marketplace and to adapt to the increasing use of digital and online tools to market, buy, sell and finance used vehicles could adversely affect our business, sales and results of operationsNew
2. 02Retail Competition. Some of our competitors have replicated or attempted to replicate portions of our consumer offer, including our use of competitive, no-haggle prices and our commitment to buy a customer’s vehicle even if they do not purchase one from usNew
3. 03If we fail to respond effectively to competitive pressures or to changes in the used vehicle marketplace, it could have a material adverse effect on our business, sales and results of operations
4. 04The automotive retail industry in general and our business in particular are sensitive to economic conditions. These conditions could adversely affect our business, sales, results of operations and financial condition29% rewritten
5. 05Our business is dependent upon capital to operate, fund growth and support the activities of our CAF segment. Changes in capital and credit markets could adversely affect our business, sales, results of operations and financial condition
6. 06CarMax was founded on the fundamental principle of integrity. Failure to maintain a reputation of integrity and to otherwise maintain and enhance our brand could adversely affect our business, sales and results of operations95% rewritten
7. 07Our business is sensitive to changes in the prices of new and used vehicles
8. 08A reduction in the availability of, or access to, sources of inventory, including parts used to recondition inventory, could have a material adverse effect on our business, sales and results of operations
9. 09Our failure to realize the benefits associated with our omni-channel platform or initiatives designed to leverage evolving technologies, including AI, could have a material adverse effect on our business, sales and results of operations
10. 10Our failure to manage our growth and the related challenges could have a material adverse effect on our business, sales and results of operations21% rewritten
11. 11Our success depends upon the continued contributions of our associates50% rewritten
12. 12We may experience greater credit losses in CAF’s portfolio of auto loans than anticipated
13. 13Our failure to realize the benefits associated with our strategic investments, including actual or potential acquisitions, could have a material adverse effect on our business, sales and results of operations and we may incur impairment losses on our strategic investments in equity securities
14. 14We rely on third-party finance providers to finance a significant portion of our customers’ vehicle purchases. Accordingly, our sales and results of operations are partially dependent on the actions of these third parties
15. 15We rely on third-party providers to supply EPP products to our customers. Accordingly, our sales and results of operations are partially dependent on the actions of these third-parties
16. 16We rely on third-party vendors for key components of our business
17. 17Our business is sensitive to conditions affecting automotive manufacturers
18. 18Our results of operations and financial condition are subject to management’s accounting judgments and estimates, as well as changes in accounting policies30% rewritten
19. 19We may not be able to adequately protect our intellectual property, which could adversely affect our business, sales, results of operations and financial condition
20. 20Our business is sensitive to weather events
21. 21We have communicated certain environmental goals that are subject to related disclosure requirements. Failure to meet environmental goals or satisfy disclosure requirements could adversely affect our business, sales, results of operations and financial condition
22. 22We are subject to local conditions in the geographic areas in which we are concentrated

TECHNOLOGY AND DATA PRIVACY RISKS

1. 23We collect sensitive confidential information from our customers. A breach of this confidentiality, whether due to a cybersecurity or other incident, could result in harm to our customers and damage to our brand
2. 24We rely on sophisticated information systems to run our business. The failure of these systems, or the inability to enhance our capabilities, could have a material adverse effect on our business, sales and results of operations

REGULATORY AND LITIGATION RISKS

1. 25We operate in a highly regulated industry and are subject to a wide range of federal, state and local laws and regulations. Changes in these laws and regulations, or our failure to comply, could have a material adverse effect on our business, sales, results of operations and financial condition
2. 26We are subject to evolving regulations, disclosure requirements, standards and expectations relating to environmental, social and governance matters. Failure to satisfy these regulations, requirements, standards and expectations could adversely affect our business, sales, results of operations and financial condition
3. 27We are subject to various legal proceedings. If the outcomes of these proceedings are adverse to CarMax, it could have a material adverse effect on our business, results of operations and financial condition27% rewritten

GENERAL RISKS

1. 28The market price of our common stock has been and may continue to be volatile and could expose us to securities class action litigation63% rewritten
2. 29Our business and operations could be negatively affected by actions of activist shareholders against us, which could cause us to incur significant expense, hinder execution of business and growth strategy, and impact our stock priceNew