EarningsQ2 2027 Earnings Report
MX:KMX Q2 2027 EPS Results
Actual EPS$21.22
Consensus EPS$13.39
Beat/MissBeat by +$7.83
One Year Ago EPS$11.71
MX:KMX Q2 2027 Revenue Results
Actual Revenue$152.47B
Expected Revenue$129.74B
Beat/MissBeat by +$22.73B
YoY Revenue Growth+17.64%
Earnings Announcement Details
QuarterQ2 2027
Date09/29/2026
TimeBefore Open
Conference CallTuesday, September 29, 2026
MX:KMX Upcoming Earnings
CarMax's next earnings date is estimated for December 17, 2026, based on past reporting schedules.
Q2 2027 Earnings Call Audio
MX:KMX Q2 2027 Earnings Call
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Q2 2027 Earnings Slide Deck
Q2 2027 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive, with substantial year-over-year growth in sales, comparable units, EPS, gross profit, CAF income, EPP margins, and SG&A productivity. Management also highlighted improved pricing competitiveness, resilient consumers, AI and digital initiatives, strategy execution, and the planned resumption of share repurchases. The main negatives were lower gross profit per unit, declining CAF penetration, an expectation for slightly lower FY2027 CAF income, upcoming pension and severance charges, higher transportation costs, and affordability pressure from elevated interest rates. Highlights significantly outweighed the lowlights.Company Guidance
Strong Sales Growth
Second-quarter total sales were $7.9 billion, up 19% year-over-year. Approximately 388,000 vehicles were sold across retail and wholesale channels, up 15%. Used unit comps increased 13%, total used unit sales grew 14%, and wholesale unit sales increased 16%.
Significant Earnings Improvement
Net earnings per diluted share increased 81% year-over-year to $1.16 from $0.64, supported by robust comparable sales growth, other gross profit expansion, increased CarMax Auto Finance contribution, and continued SG&A leverage.
Gross Profit Expansion
Total gross profit was $799 million, up 11% year-over-year. Used retail margin dollars increased 8% to $479 million, and other gross profit increased 33% to $183 million.
More Competitive Pricing Supported Sales
CarMax continued to improve price competitiveness by driving reconditioning efficiencies, dynamically managing gross profit per unit, passing savings to customers, and improving pricing algorithms with more granular local-market insights and broader vehicle comparisons.
FTC Transparency Tailwind
Management said enhanced FTC regulatory focus requiring advertised fees to be included has improved industrywide pricing transparency and benefited CarMax's no-haggle pricing model. The company estimated that FTC-related benefits accounted for about half of its comparable sales performance, with the other half coming from company-controlled actions. The percentage of CarMax vehicles rated 'great deals' on Cars.com more than doubled year-over-year in the quarter.
Digital and AI Customer Experience Enhancements
CarMax scaled AI voice technology to 100% of inbound store and customer experience center calls. It also redesigned its car detail page to improve inventory visibility, provide personalized monthly payments, and clarify purchase-process next steps. Management said these enhancements supported sales conversion and expects further gains over time.
Extended Protection Plan Momentum
Extended protection plan unit margins increased materially year-over-year. EPP margin dollars rose $27 million, including a $46 per-unit increase in the quarter, driven by the redesigned product and the new wheel, tire and dent offering. CarMax remains on track to generate approximately $35 per unit in incremental EPP margin for the full fiscal year, with national rollout of the new product expected by year-end.
CarMax Auto Finance Income Growth
CarMax Auto Finance income increased 32% year-over-year to $136 million. The improvement was driven by a $29 million decrease in loan-loss provision to $113 million, a $17 million gain on sale, and a $6 million increase in servicing fees.
Progress in Tier 2 Financing
CAF continued expanding across the credit spectrum. CAF financed 22% of Tier 2 volume versus 10% a year ago, while Tier 2 origination volume was described as up substantially year-over-year. Management said observed Tier 2 credit performance remained in line with original expectations and plans to originate nearly $1 billion in Tier 2 by year-end.
Stable CAF Credit Metrics
Credit losses were within expectations across the Tier 1 and Tier 2 portfolios. CAF's reserve balance was $497 million, or 3.07% of receivables held for investment, and quarterly net interest margin was 6.6%, consistent with the prior year.
SG&A Leverage and Cost-Savings Progress
SG&A expenses increased 4.6% to $629 million, but SG&A declined by $157 per total unit, or 9%, to $1,621. CarMax remains on track to deliver $200 million of identified savings on an FY2027 exit-rate basis and said compensation excluding share-based compensation would have decreased by over $14 million year-over-year.
Expanded Vehicle Sourcing Through Dealers
CarMax bought approximately 310,000 vehicles during the quarter, up 6% year-over-year. Approximately 262,000 vehicles were sourced from consumers, relatively flat year-over-year, while approximately 48,000 were sourced through dealers with support from Edmunds, up 54%.
Leadership Additions and Strategy Execution
CarMax rolled out its Shift into GEAR strategy across its corporate offices and field organization. Elizabeth Dirgins will join as Executive Vice President, Chief Digital and Customer Officer on October 5, and Jeff Campbell joined the senior leadership team as Senior Vice President, Strategy to lead a centralized strategy, data science, AI, and pricing function.
Share Repurchases Set to Resume
Based on second-quarter performance, continued momentum, and improving leverage, CarMax intends to resume share repurchases at a modest level in the third quarter. The company had $1.31 billion of repurchase authorization remaining at quarter-end.
Resilient Consumer Demand
Management described consumers as resilient across income cohorts. The lowest-income cohort had approximately the same number of customers year-over-year, while higher-income cohorts grew year-over-year. CarMax's 13% comparable sales growth compared with an overall industry that was described as down 1% or flat to 1%.
Reconditioning and Operating Efficiency Initiatives
CarMax continued taking costs out of reconditioning operations and passed savings to customers through more competitive pricing. Actions included new operator tools, a new parts-selection tool, and changing from a 90-day warranty to a 30-day warranty while returning the savings through lower customer pricing.
Inventory Productivity Work Underway
Management identified faster inventory turns, fewer unproductive transfers, and fewer unproductive holds as opportunities within Shift into GEAR. CarMax transfers close to 2.5 million vehicles annually and is testing how holds and transfers affect sales and inventory productivity.
Pension Plan Funding Position
CarMax expects the assets in its pension trust to fully fund the settlement of its legacy pension liabilities. Planned termination of the pension plan is expected to eliminate potential future corporate funding requirements.
MX:KMX Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed