Starboard Value's letter to CarMax's incoming CEO
- Written by
- Jeffrey Smith
- Organisation
- Starboard Value
- Filed
- 10 Mar 2026
- Sector
- Used-car retail
Read the original at sec.gov (opens in a new tab)
This is the view as filed on 10 Mar 2026, not a statement of what the author thinks today.
About this letter
Jeffrey Smith, Managing Member of Starboard Value, wrote this letter on 10 March 2026 to Keith Barr, CarMax's incoming President and Chief Executive Officer, with a copy to the Board of Directors. Starboard filed it with the SEC on form DFAN14A, the form used when a party other than the company files proxy soliciting material, so a private-looking letter to one executive was also made public to every shareholder.
The letter arrives at a leadership transition, after a period in which, in Starboard's view, the used-car retailer's results fell well short of its potential. Rather than a list of demands, it walks through the business as a chain of operations: buying cars, reconditioning them, selling them, pricing and overhead. It also touches on the CarMax Auto Finance arm and the balance sheet, and treats AI as one tool for reworking workflows.
Why read it
Shows an activist laying out a turnaround plan for a new chief executive, one operation at a time, from trade-in sourcing to a numerical SG&A target.
What to notice
- 1
The letter is addressed to Keith Barr before he formally starts as chief executive, and is pitched as an offer to collaborate from a holder with about $350 million invested.
Continue the investment thesis
See the 4 remaining takeaways on what this investor is arguing and why, and every analysis across the Letters & Theses library.
Checking what you can open…
“We believe the primary issue is conversion, not demand.”
Companies discussed
- CarMax (KMX)
Topics
- turnaround
- cost discipline
- competitive advantage
- management change
- ai
- valuation discount
L3VLUP does not host this document. It belongs to Starboard Value and is a public SEC filing; the notes above are L3VLUP’s reading of it.
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