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CarMax (KMX) Q2 Earnings: Used-Car Sales Rebound 13.8%

Steven Levine, Founder of TickerPosts and OpenClassActions.com2 min read
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CarMax reported a sharp recovery in used-vehicle sales for fiscal Q2 2027, with revenue and unit volume growing at double-digit rates. The tradeoff was visible in profit per vehicle, which declined as the company continued pricing actions designed to improve sales.

CarMax Q2 results at a glance

The September 29 earnings release showed total net revenue of $7.88 billion, up 19.5% year over year. Net earnings rose to $165.3 million from $95.4 million, and diluted EPS increased to $1.16 from $0.64.

Retail used-unit sales increased 13.8%, while comparable-store used-unit sales rose 13.0%. Wholesale volume increased 15.9%. Combined retail and wholesale unit sales reached 387,735, up 14.7%.

More sales came with lower unit margins

Gross profit per retail used vehicle declined $111 to $2,105. Wholesale gross profit per unit fell $135 to $858.

That distinction matters because revenue growth benefited from both more units and a 6.3% increase in the average retail selling price. Investors should not assume a 19.5% revenue increase translates proportionally into gross profit.

CarMax did achieve meaningful operating leverage. Selling, general and administrative expense increased only 4.6%, much slower than revenue and unit growth. Total gross profit rose 11.4%, and earnings before taxes increased to $223.1 million from $127.1 million.

Auto finance also improved

CarMax Auto Finance income increased to $135.6 million from $102.6 million. Its total interest-margin percentage remained 6.6% of average auto loans outstanding, while the weighted-average contract rate rose to 11.8%.

Financing can support vehicle sales and profit, but it adds credit and funding risk. Investors should continue monitoring delinquencies, losses and the share of units financed by CarMax.

Buybacks are planned to resume

Management said it intends to restart repurchases at a modest level in fiscal Q3. CarMax had $1.31 billion remaining under its authorization at quarter-end.

The quarter supports a recovery thesis: volume, revenue and earnings improved together. The next question is whether CarMax can sustain that growth while rebuilding gross profit per vehicle rather than relying indefinitely on pricing actions.

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Analysis published September 29, 2026. This article is informational and is not investment advice. Forward-looking plans and announced transactions can change.

Sources