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CarMax Q2 Earnings Beat Estimates on Strong Unit Sales, CAF Growth
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Key Takeaways
CarMax posted an 81.3% rise in Q2 EPS as retail and wholesale unit sales surged.
Retail used-unit sales climbed 13.8%, while average selling prices rose 6.3% to $27,623.
CAF income jumped 32.1%, while SG&A per unit fell 8.8% on stronger unit sales and cost control.
CarMax, Inc. (KMX - Free Report) reported second-quarter fiscal 2027 earnings of $1.16 per share, which increased 81.3% year over year and beat the Zacks Consensus Estimate of 68 cents by 70.6%. Revenues increased 19.5% to $7.88 billion, surpassing the consensus mark of $7.06 billion by 11.5%.
Results benefited from strong retail and wholesale volumes, higher vehicle pricing and CarMax Auto Finance growth. Retail used-unit sales increased 13.8%, while comparable-store used-unit sales advanced 13%.
For the quarter ended Aug. 31, 2026, used vehicle sales increased 19.7% year over year to $6.31 billion. Total retail used vehicle unit sales rose 13.8% to 227,391. The average retail selling price increased 6.3%, or approximately $1,600 per unit, to $27,623.
CarMax bought 310,107 vehicles from consumers and dealers, up 5.9%. Purchases from consumers were flat at 262,570 vehicles, while dealer purchases surged 53.7% to 47,537. Digital capabilities supported 81% of retail unit sales, with omni sales representing 68% and online retail sales accounting for 13%.
CarMax Wholesale Business Maintains Momentum
Wholesale vehicle sales increased 18.2% year over year to $1.36 billion. Wholesale unit sales climbed 15.9% to 160,344, while the average wholesale selling price increased 1.8% to $8,036.
Wholesale vehicle gross profit was nearly flat at $137.6 million, as higher volumes were offset by weaker unit economics. Gross profit per wholesale unit declined by $135 to $858, highlighting the margin pressure accompanying stronger sales activity.
KMX Margins Reflect Competitive Pricing Actions
Total gross profit increased 11.4% year over year to $799.5 million. Retail used vehicle gross profit rose 8.1% to $478.6 million, driven by higher volume. However, gross profit per used unit declined by $111 to $2,105 as KMX continued pricing actions to support sales trends.
Other gross profit rose 33.1% to $183.3 million. Extended Protection Plan margin dollars increased $26.5 million, supported by higher volume and a $46 rise in margin per retail unit to $623. Service margin improved $22 million, primarily reflecting cost-of-sales efficiency gains and leverage from unit growth.
CarMax Cost Control Drives SG&A Leverage
Selling, general and administrative expenses increased 4.6% year over year to $628.6 million. Despite the increase, SG&A per total unit fell $157, or 8.8%, to $1,621, reflecting leverage from the sharp rise in unit sales.
Ongoing cost-reduction efforts were partly offset by the annualization of materially reduced incentive-based compensation in the prior-year period and variable costs associated with higher volumes. Savings from reductions in field and corporate payroll provided an offset. CarMax remains on track to achieve $200 million in targeted SG&A exit-rate savings by the end of fiscal 2027.
KMX Finance Arm Posts Strong Income Growth
CarMax Auto Finance income increased 32.1% year over year to $135.6 million, aided by a lower provision for loan losses. The provision declined to $113.4 million from $142.2 million. CAF also recorded a $16.6 million gain on the sale of auto loans and benefited from $6.1 million in servicing income.
CAF financed 40.9% of units sold after three-day payoffs, down from 42.6% a year earlier. However, it financed 22% of Tier 2 volume compared with 10% in the prior-year quarter. The total interest margin remained unchanged at 6.6%, while the weighted average contract rate increased 60 basis points to 11.8%.
CarMax Plans to Resume Share Repurchases
KMX ended the quarter with cash and cash equivalents of $170.5 million and inventory of $3.85 billion. Long-term debt, excluding the current portion, totaled $1.66 billion. The company generated $900.5 million in net cash from operating activities during the first six months of fiscal 2027.
CarMax did not repurchase shares during the quarter but plans to resume buybacks at a modest level in the third quarter. It had $1.31 billion remaining under its authorization as of Aug. 31, 2026. KMX currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
General Motors Company (GM - Free Report) reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. (TSLA - Free Report) reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts Company (GPC - Free Report) reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.
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CarMax Q2 Earnings Beat Estimates on Strong Unit Sales, CAF Growth
Key Takeaways
CarMax, Inc. (KMX - Free Report) reported second-quarter fiscal 2027 earnings of $1.16 per share, which increased 81.3% year over year and beat the Zacks Consensus Estimate of 68 cents by 70.6%. Revenues increased 19.5% to $7.88 billion, surpassing the consensus mark of $7.06 billion by 11.5%.
Results benefited from strong retail and wholesale volumes, higher vehicle pricing and CarMax Auto Finance growth. Retail used-unit sales increased 13.8%, while comparable-store used-unit sales advanced 13%.
CarMax, Inc. Price, Consensus and EPS Surprise
CarMax, Inc. price-consensus-eps-surprise-chart | CarMax, Inc. Quote
KMX Sales Rise on Higher Volumes and Pricing
For the quarter ended Aug. 31, 2026, used vehicle sales increased 19.7% year over year to $6.31 billion. Total retail used vehicle unit sales rose 13.8% to 227,391. The average retail selling price increased 6.3%, or approximately $1,600 per unit, to $27,623.
CarMax bought 310,107 vehicles from consumers and dealers, up 5.9%. Purchases from consumers were flat at 262,570 vehicles, while dealer purchases surged 53.7% to 47,537. Digital capabilities supported 81% of retail unit sales, with omni sales representing 68% and online retail sales accounting for 13%.
CarMax Wholesale Business Maintains Momentum
Wholesale vehicle sales increased 18.2% year over year to $1.36 billion. Wholesale unit sales climbed 15.9% to 160,344, while the average wholesale selling price increased 1.8% to $8,036.
Wholesale vehicle gross profit was nearly flat at $137.6 million, as higher volumes were offset by weaker unit economics. Gross profit per wholesale unit declined by $135 to $858, highlighting the margin pressure accompanying stronger sales activity.
KMX Margins Reflect Competitive Pricing Actions
Total gross profit increased 11.4% year over year to $799.5 million. Retail used vehicle gross profit rose 8.1% to $478.6 million, driven by higher volume. However, gross profit per used unit declined by $111 to $2,105 as KMX continued pricing actions to support sales trends.
Other gross profit rose 33.1% to $183.3 million. Extended Protection Plan margin dollars increased $26.5 million, supported by higher volume and a $46 rise in margin per retail unit to $623. Service margin improved $22 million, primarily reflecting cost-of-sales efficiency gains and leverage from unit growth.
CarMax Cost Control Drives SG&A Leverage
Selling, general and administrative expenses increased 4.6% year over year to $628.6 million. Despite the increase, SG&A per total unit fell $157, or 8.8%, to $1,621, reflecting leverage from the sharp rise in unit sales.
Ongoing cost-reduction efforts were partly offset by the annualization of materially reduced incentive-based compensation in the prior-year period and variable costs associated with higher volumes. Savings from reductions in field and corporate payroll provided an offset. CarMax remains on track to achieve $200 million in targeted SG&A exit-rate savings by the end of fiscal 2027.
KMX Finance Arm Posts Strong Income Growth
CarMax Auto Finance income increased 32.1% year over year to $135.6 million, aided by a lower provision for loan losses. The provision declined to $113.4 million from $142.2 million. CAF also recorded a $16.6 million gain on the sale of auto loans and benefited from $6.1 million in servicing income.
CAF financed 40.9% of units sold after three-day payoffs, down from 42.6% a year earlier. However, it financed 22% of Tier 2 volume compared with 10% in the prior-year quarter. The total interest margin remained unchanged at 6.6%, while the weighted average contract rate increased 60 basis points to 11.8%.
CarMax Plans to Resume Share Repurchases
KMX ended the quarter with cash and cash equivalents of $170.5 million and inventory of $3.85 billion. Long-term debt, excluding the current portion, totaled $1.66 billion. The company generated $900.5 million in net cash from operating activities during the first six months of fiscal 2027.
CarMax did not repurchase shares during the quarter but plans to resume buybacks at a modest level in the third quarter. It had $1.31 billion remaining under its authorization as of Aug. 31, 2026. KMX currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
General Motors Company (GM - Free Report) reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. (TSLA - Free Report) reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts Company (GPC - Free Report) reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.