Carmax Reports Q2 Fiscal 2027 Results, Resumes Share Repurchases

CarMax, Inc. reported its financial results for the second quarter ended August 31, 2026, revealing a 19.5% increase in total net revenues to $7.9 billion. The company also announced plans to resume share repurchases in the third quarter of fiscal 2027.

During the quarter, combined retail and wholesale unit sales reached 387,735, a 14.7% increase compared to the prior year. Retail used vehicle sales increased 13.8% to 227,391 units, while comparable store used unit sales rose 13.0%. Average retail selling prices increased by approximately $1,600 per unit, or 6.3%. Total wholesale unit sales increased 15.9% to 160,344 units.

Gross profit for the quarter totaled $799.5 million, up 11.4% year-over-year. However, gross profit per retail used unit decreased by $111 to $2,105, and gross profit per wholesale unit decreased by $135 to $858. This was attributed to pricing actions implemented to support an improved sales trend. In contrast, the margin for Extended Protection Plans (EPP) increased by $46 per retail unit to $623.

Operating expenses increased 4.6% to $628.6 million, though SG&A per total unit improved by $157, or 8.8%, to $1,621. The company remains on track to achieve targeted SG&A reductions of $200 million in exit rate savings by the end of fiscal 2027.

CarMax Auto Finance (CAF) income increased 32.1% to $135.6 million. CAF financed 22% of Tier 2 volume, making it the largest lender in that space. The weighted average contract rate was 11.8% in the quarter, up 60 basis points from the prior year.

Net earnings per diluted share were $1.16, an increase of 81.3% compared to $0.64 in the prior year. As of August 31, 2026, CarMax had $1.31 billion remaining available for repurchase under its outstanding authorization. Given the second quarter performance and improving leverage, the company intends to resume share repurchases at a modest level in the third quarter of fiscal 2027.

CarMax also opened an offsite auction center and store in Conroe, Texas, and a store in Richland, Washington, during the quarter. Following the end of the quarter, the company opened an additional store in Austin, Texas.