CarMax Earnings Jump on Used-Vehicle Sales
CarMax earnings showed double-digit revenue and EPS growth as higher volumes lifted results; resuming buybacks and a Nov. 3 update may spur buyback flows.
KEY TAKEAWAYS
- Total net revenue rose 19.5% to $7.9 billion and diluted EPS rose 81.3% to $1.16.
- Combined retail and wholesale unit sales increased 14.7% to 387,735 vehicles.
- Gross profit per retail unit fell $111 to $2,105 and wholesale fell $135 to $858.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
CarMax Inc. (KMX) reported stronger earnings in the second quarter as higher used-vehicle sales and increased finance income boosted revenue and profit. The company also announced plans to resume share repurchases ahead of a strategic update scheduled for November 3, 2026.
Results and Unit Trends
For the three months ended August 31, 2026, CarMax’s total net revenue rose 19.5% to $7.9 billion. Net earnings reached $165.3 million, while diluted earnings per share (EPS) climbed 81.3% to $1.16 from $0.64 a year earlier.
Combined retail and wholesale unit sales increased 14.7% to 387,735 vehicles. Retail used-vehicle sales rose 13.8%, with comparable-store sales up 13.0% to 227,391 vehicles. Wholesale volumes grew 15.9% to 160,344 vehicles. These volume gains drove the company’s top-line growth despite pricing actions aimed at accelerating sales.
CarMax discussed the results on a September 29 investor call featuring President and CEO Keith Barr, CFO Enrique Mayor-Mora, and CarMax Auto Finance executive Jon Daniels.
Margins and Capital Allocation
Gross profit per retail used vehicle declined $111 year over year to $2,105, reflecting pricing strategies to support sales momentum. Wholesale gross profit per vehicle fell $135 to $858. These declines created a trade-off between volume growth and unit profitability.
Selling, general and administrative (SG&A) expenses rose 4.6% to $628.6 million, but SG&A per total unit declined 8.8% to $1,621, benefiting from lower overhead per vehicle as volumes increased. Income from CarMax Auto Finance grew 32.1% to $135.6 million, contributing to the profit increase and supporting the EPS gain.
The quarter highlighted a balance between rising transactions and finance income lifting revenue and earnings, while per-unit gross margins weakened and aggregate selling expenses increased. CarMax’s decision to resume share repurchases and the upcoming strategic update indicate that capital allocation and margin management will be key investor focuses.
The company plans to release results for the quarter ending November 30 on December 17, 2026, before the market opens, followed by an investor call at 8:00 a.m. ET. That report will provide further insight into whether pricing actions can sustain sales growth without further margin erosion as volumes expand.
