CarMax reports second-quarter fiscal 2027 results, plans share repurchases in Q3

For best results when printing this announcement, please click on link below: CarMax Reports Second Quarter Fiscal 2027 Results Announces plans to resume share repurchases in Q3 FY ‘27. Company to host Strategic Update on November 3rd CarMax, Inc. (NYSE:KMX) today reported results for the second quarter ended August 31, 2026. 9 billion.

7%. 0%; gross profit per retail used unit of $2,105 declined by $111, reflecting the continuation of pricing actions implemented to support an improved sales trend. 9%; gross profit per wholesale unit of $858, a decrease of $135. Extended Protection Plans (EPP) margin per retail unit of $623, an increase of $46 per unit.

9%. 8%, per total unit. Ongoing cost reduction efforts were offset as we annualized over materially reduced incentive-based compensation and by variable costs tied to strong unit growth. 6 million.

In regard to the continued execution of our full spectrum growth strategy, CAF financed 22% of Tier 2 volume versus 10% a year ago and was the largest lender in this space. 3%. Plan to resume share repurchases in the third fiscal quarter of this year. m.

ET where we will provide details on our strategy for growth, key initiatives and milestones. ((1)) Comparisons to the prior year’s second quarter unless otherwise stated. CEO Commentary: “Our strong second quarter results reflect solid execution and early progress against Shift into GEAR, our four-pillar strategy to strengthen CarMax’s core business and return the company to sustained growth,” said Keith Barr, President and Chief Executive Officer.

“We delivered 81% EPS growth as we strengthened our price competitiveness, increased Extended Protection Plan margins, expanded CAF’s share of Tier 2 originations, continued to enhance our digital experience, and drove material SG&A leverage. I am confident in our ability to build on this early momentum. ” Strategy for Growth: Last quarter, we introduced our strategy for growth, which we have named Shift into GEAR. The strategy is built around four pillars designed to place the customer at the center of everything we do with the objective of driving sustainable growth and strong operating performance over time: 1.

Great Offering — give customers every reason to choose CarMax Price competitively across demand cycles while growing saleable inventory and providing customers faster access to our vehicles 2. Easy Experience — make it easy to do business with us, both online and in our stores Better connect digital capabilities with in-store experiences to improve conversion and customer satisfaction 3. Add Value — grow profitability by maximizing value across all aspects of our business Grow long-term profitability across our CAF and EPP businesses 4.

Run Lean — unlock efficiencies to enable a great offering Lower reconditioning costs through technology and operational efficiency while continuing to deliver the high-quality vehicles customers expect from CarMax, enhance our logistics network, and continue to reduce SG&A CarMax will host a Strategic Update virtually on November 3(rd) where details about our strategy for growth, key initiatives and milestones will be provided. Registration details will be available in the days ahead. Second Quarter Business Performance Review: Sales. 9 billion compared to the prior year’s second quarter.

7% from the prior year’s second quarter. 8% to 227,391 compared to the prior year’s second quarter. 0% from the prior year's second quarter. 3%.

9% to 160,344 versus the prior year’s second quarter. 8%. 9% compared to last year’s second quarter. 7%.

0 million, compared with the second quarter of fiscal 2026, primarily reflecting an increase in EPP revenues. Our digital capabilities supported 81% of retail unit sales. Omni sales((2)) were 68% and online retail sales((3)) accounted for 13% of retail unit sales. Gross Profit.

4% versus last year’s second quarter. 1% driven by higher volume and partially offset by lower profit per used unit of $2,105. Retail gross profit per unit decreased $111 from last year’s second quarter, reflecting the continuation of pricing actions to support an improved sales trend. 6 million was flat to a year ago with higher volume offset by lower gross profit per unit of $858, down $135 per unit.

1% from last year’s second quarter. 5 million driven by growth in both unit volume and unit margins, up $46 per unit in the second quarter. 0 million, driven primarily by efficiency gains in cost of sales and leverage from unit volume growth. SG&A.

8%, to $1,621. Ongoing cost reduction efforts were offset as we annualized over materially reduced incentive-based compensation and by variable costs tied to strong unit growth. This increase was partially offset by savings from actions taken to reduce field and corporate payroll as part of our targeted SG&A reductions. We remain on track to achieve targeted SG&A reductions of $200 million in exit rate savings by the end of fiscal 2027.

4 million. During the second quarter of the prior year, we recorded additional provision due to the worsening performance of older vintages at that time, whereas performance this year has been in line with expectations. This was partially offset by provisioning related to Tier 2 originations in the quarter from our full credit spectrum expansion. 1 million increase in servicing fees year-over-year.

2 billion year-over-year reduction in outstanding receivables related to the combination of selling the residual interest in two non-prime securitizations and from lower sales during fiscal 2026. 95% as of May 31, 2026. 6% of average auto loans outstanding, consistent with the prior year’s second quarter. 6% in the prior year’s second quarter.

Additionally, CAF financed 22% of Tier 2 volume and was the largest lender in this space, reflecting continued execution of our full spectrum growth strategy. 8% in the quarter, up 60 basis points from last year’s second quarter. Share Repurchase Activity. Given our second quarter performance, continued momentum, and improving leverage, we intend to resume share repurchases at a modest level in the third quarter of this fiscal year.

During the second quarter of fiscal 2027, we did not repurchase any shares of common stock pursuant to our share repurchase program. 31 billion remaining available for repurchase under the outstanding authorization. The timing and amount of our share repurchases are at the discretion of management and will depend upon market conditions, our leverage, and our capital needs, among other factors. Our share repurchase program may be modified, suspended or terminated at any time at the discretion of our board of directors.

Other Income. 6 million in the second quarter of fiscal 2026. The increase was primarily due to unrealized gains on equity investments recorded during the second quarter of fiscal 2027. Location Openings.

During the second quarter of fiscal 2027, we opened an offsite auction center and store in Conroe, Texas, and a store in Richland, Washington. Subsequent to the end of the quarter, we opened an additional store in Austin, Texas. ((2)) An omni retail unit sale is defined as a sale where customers complete at least one, but not all, of the four activities listed in note (3) below online. An omni retail unit sale also includes additional steps that can be completed online, including pre-qualifying for financing, setting appointments and signing up for notifications of cars coming soon.

((3)) An online retail sale is defined as a sale where the customer completes all four of these major transactional activities online: reserving the vehicle; financing the vehicle, if needed; trading-in or opting out of a trade in; and creating an online sales order. ((4)) Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions. Supplemental Financial Information Amounts and percentage calculations may not total due to rounding. 4 % (1)) Excludes intercompany revenues that have been eliminated in consolidation.

2 )% (1)) Stores are added to the comparable store base beginning in their fourteenth full month of operation. Comparable store calculations include results for a set of stores that were included in our comparable store base in both the current and corresponding prior year periods. 0 % (1)) Calculated as used vehicle units financed for respective channel as a percentage of total used units sold. ((2)) Includes CAF’s Tier 2 and Tier 3 loan originations, which represent less than 5% of total used units sold.

((3)) Third-party finance providers who generally pay us a fee or to whom no fee is paid. ((4)) Third-party finance providers to whom we pay a fee. ((5)) Represents customers arranging their own financing and customers that do not require financing. 2 (1)) Calculated as a percentage of net sales and operating revenues.

6 % (1)) Amounts are net of intercompany eliminations. 9 (1)) Amounts are net of intercompany eliminations. ((2)) Calculated as category gross profit divided by its respective units sold, except the other category, which is divided by total used units sold. ((3)) Calculated as a percentage of its respective sales or revenue.

7 )% (1)) Amounts are net of intercompany eliminations. ((2)) Excludes compensation and benefits related to reconditioning and vehicle repair service, which are included in cost of sales. ((3)) Includes IT expenses, non-CAF bad debt, insurance, preopening and relocation costs, travel, charitable contributions and other administrative expenses.