CarMax Reports Second Quarter Fiscal Year 2026 Results

CarMax, Inc., the largest retailer of used autos in the United States, has released its financial results for the second quarter of fiscal year 2026, ending August 31, 2025. The company reported a challenging quarter with declines in several key financial metrics but remains optimistic about its long-term strategy and recent initiatives.

Financial Highlights

For the second quarter, CarMax reported net earnings per diluted share of $0.64, down from $0.85 in the same period last year. Total net sales and operating revenues decreased by 6.0% to $6.59 billion, compared to $7.01 billion in the prior year's second quarter. The company's gross profit also saw a decline, falling 5.6% to $717.7 million.

CarMax Auto Finance (CAF) income decreased by 11.2% to $102.6 million, primarily due to an increase in the provision for loan losses. The net interest margin percentage for CAF improved to 6.6%, up 50 basis points from the previous year.

Business and Operational Highlights

Retail used unit sales decreased by 5.4%, with comparable store used unit sales down 6.3%. Wholesale vehicle unit sales also saw a decline of 2.2%. Despite these decreases, the company maintained solid unit margins, with a gross profit per retail used unit of $2,216 and a gross profit per wholesale unit of $993.

CarMax bought 293,000 vehicles from consumers and dealers, a decrease of 2.4% from the previous year. The company's digital capabilities supported 80% of retail unit sales, with omni-channel sales accounting for 68% and online retail sales making up 12% of retail unit sales.

Strategic Initiatives and Corporate Developments

During the quarter, CarMax repurchased $180.0 million in shares of common stock, continuing its accelerated pace compared to fiscal year 2025. The company also launched a new brand positioning campaign, "Wanna Drive?", aimed at enhancing its omni-channel experience.

CarMax opened three new store locations and one stand-alone reconditioning/auction center during the quarter, expanding its footprint in key markets.

Management's Perspective

Bill Nash, President and CEO of CarMax, acknowledged the challenging quarter but expressed confidence in the company's long-term strategy. He highlighted the recent launch of the "Wanna Drive?" campaign and the company's commitment to driving SG&A efficiency, targeting at least $150 million in incremental SG&A reductions over the next 18 months.

Future Outlook

CarMax plans to release its third-quarter results on December 18, 2025. The company remains focused on its strategic initiatives and expects to realize significant SG&A savings by the end of fiscal 2027.

SEC Filing: CARMAX INC [ KMX ] - 8-K - Sep. 25, 2025