CarMax (NYSE: KMX) posts $8.0B Q1 revenue and unveils four-pillar growth plan
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
CarMax reported first quarter fiscal 2027 results showing modest growth in sales but lower profit. Net sales and operating revenues rose 6.2% to $8.0 billion, driven by higher used and wholesale vehicle revenues. Combined retail and wholesale unit sales grew 3.3% to 392,357 vehicles.
Net earnings declined 11.8% to $185.6 million, and diluted EPS decreased to $1.31 from $1.38 as gross margin compressed. SG&A fell 3.7% to $635.2 million, improving cost leverage. CarMax Auto Finance contributed $140.2 million of income, down 1.0% year over year, while financing penetration increased to 43.3%.
CarMax also entered a new $500 million Term Loan Facility maturing in 2029, using proceeds mainly to pay down borrowings under its $2.0 billion unsecured revolving credit facility and for working capital and general corporate purposes. Management introduced a four‑pillar growth strategy focused on competitive pricing, seamless omni-channel experiences, maximizing value per transaction, and running a leaner cost structure.
Positive
- None.
Negative
- None.
Insights
CarMax posts higher revenue but lower margins while adding $500M term debt.
CarMax grew net sales 6.2% to $8.0B, with total units up 3.3%. However, gross profit fell 4.4% to $854.4M as retail used gross profit per unit declined $230 from last year’s record, reflecting deliberate pricing actions to support volume.
Net earnings dropped 11.8% to $185.6M and diluted EPS slipped to $1.31, while SG&A fell 3.7% and SG&A per unit improved 6.8%, showing cost discipline. CarMax Auto Finance income was stable, down only 1.0% with total interest margin percentage improving to 6.7% of average loans.
The company added a $500M Term Loan Facility maturing in 2029, primarily to repay borrowings on its $2.0B revolving credit facility and support general corporate needs. Overall, this filing shows a trade-off between pricing-driven margin pressure and controlled costs within a new four-pillar growth framework, without a clear shift in the long-term investment thesis based on the provided data.
8-K Event Classification
3 items: 2.02, 2.03, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net sales and operating revenues: $8,013.5M
Net earnings: $185.6M
Diluted EPS: $1.31 per share
+5 more
8 metrics
Net sales and operating revenues
$8,013.5M
Three months ended May 31, 2026; up 6.2% year over year
Net earnings
$185.6M
Three months ended May 31, 2026; down 11.8% year over year
Diluted EPS
$1.31 per share
Three months ended May 31, 2026; vs. $1.38 prior year
Term Loan Facility
$500.0M
New term loan maturing June 15, 2029
Combined vehicle unit sales
392,357 units
Total retail and wholesale units, up 3.3% year over year
SG&A expenses
$635.2M
Three months ended May 31, 2026; down 3.7%
CAF income
$140.2M
CarMax Auto Finance income, down 1.0% year over year
Retail used gross profit per unit
$2,177 per unit
Down $230 from last year’s all-time record
Key Terms
Term Loan Facility, Daily SOFR, CarMax Auto Finance, omni retail unit sale, +1 more
5 terms
Term Loan Facility financial
"The Credit Agreement provides for a term loan facility under which the Borrower has borrowed term loans in an aggregate principal amount of $500,000,000 (the “Term Loan Facility”)."
A term loan facility is a type of loan provided by a lender that is repaid over a set period of time, usually with fixed payments. It functions like a large, upfront loan that a borrower agrees to pay back gradually, often used to fund major investments or projects. For investors, understanding a company's use of such loans helps assess its financial stability and risk level.
Daily SOFR financial
"Daily SOFR loans will bear interest at a “Daily SOFR” rate, plus an applicable margin."
Daily SOFR is the overnight interest rate for loans secured by U.S. Treasury securities, published each business day as the actual cost of borrowing cash with high-quality collateral. Investors use it as a low-risk benchmark for pricing short-term loans, floating-rate bonds, derivatives and corporate financing; like the headline gas price for borrowing cash, small daily moves can change interest costs, hedging decisions and the valuation of interest-sensitive assets.
CarMax Auto Finance financial
"CarMax Auto Finance (CAF) penetration expanded 150 basis points year over year to 43.3%, reflecting continued execution of our full spectrum growth strategy."
omni retail unit sale financial
"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 is the sale of one physical product to a customer through any combination of a retailer’s channels—online store, mobile app, call center, or a brick-and-mortar location—tracked as a single completed unit. For investors it signals how well a company can meet demand across channels and manage inventory, fulfillment and returns; strong omni sales suggest broader customer reach and greater operational flexibility, like a single order flowing smoothly whether bought in-store or online.
non-recourse notes payable financial
"Non-recourse notes payable, excluding current portion | 15,499,705 | | | 15,254,330 | | | 16,639,622 |"
Earnings Snapshot
Net sales and operating revenues: $8,013.5M
First quarter fiscal 2027 (three months ended May 31, 2026)
Net sales and operating revenues
$8,013.5M
+6.2% YoY
Net earnings
$185.6M
-11.8% YoY
Diluted EPS
$1.31
-5.1% YoY
Combined unit sales
392,357 units
+3.3% YoY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
(Address of Principal Executive Offices) | (Zip Code) | ||||||||||
(804 ) 747-0422
Registrant's telephone number, including area code
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
| Item 2.02. | Results of Operations and Financial Condition. | ||||
| CarMax, Inc. (the “Company”) issued a press release on June 17, 2026, announcing its first quarter results. The press release is being furnished as Exhibit 99.1 hereto and is incorporated by reference into this Item 2.02. | |||||
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. | ||||
| On June 15, 2026, CarMax, Inc. (the “Company”) and CarMax Auto Superstores, Inc. (“CASI” or the “Borrower”) entered into a term loan credit agreement (the “Credit Agreement”) with MUFG Bank, Ltd. (“MUFG”), as lender and as administrative agent, and the other lenders party thereto. The Credit Agreement provides for a term loan facility under which the Borrower has borrowed term loans in an aggregate principal amount of $500,000,000 (the “Term Loan Facility”). The Term Loan Facility will mature on June 15, 2029. The proceeds of the Term Loan Facility were used to pay down normal course borrowings under the Company’s $2.0 billion unsecured revolving credit facility and for other working capital and general corporate purposes. The borrowings and other obligations under the Credit Agreement are guaranteed by the Company and certain of its subsidiaries. The Credit Agreement includes customary covenants, including a covenant that requires as of the last day of any fiscal quarter the maintenance of (i) a consolidated net leverage ratio to be less than or equal to 3.75 to 1.00, subject to adjustment in connection with a material acquisition and (ii) a consolidated interest and rent coverage ratio to be greater than or equal to 2.00 to 1.00. The Credit Agreement also includes customary events of default, a cross-default provision and a change of control provision. If an event of default occurs, the lenders may declare the obligations outstanding under the Credit Agreement to be due and payable. Such acceleration will occur automatically in the event of an insolvency or bankruptcy default. Borrowings under the Term Loan Facility will bear interest based on a Daily SOFR rate or a Base Rate. Daily SOFR loans will bear interest at a “Daily SOFR” rate, plus an applicable margin. The Daily SOFR rate is a rate per annum determined for the applicable interest period by reference to the secured overnight financing rate (“SOFR”). Borrowings under Base Rate loans will bear interest at a “Base Rate,” plus an applicable margin. The Base Rate is a rate of interest equal to the highest of (i) the Federal Funds Rate plus ½ of 1%, (ii) the rate of interest in effect for such day as publicly announced by MUFG as its “prime rate” and (iii) SOFR. Interest will generally be payable on the first business day of each calendar month. The above description of the Term Loan Facility is not complete and is qualified in its entirety by reference to the Credit Agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2026. | |||||
| Item 9.01. | Financial Statements and Exhibits. | ||||
| (d) Exhibits | The following exhibit is being furnished pursuant to Item 2.02 above. | ||||
99.1 | Press release, dated June 17, 2026, issued by CarMax, Inc., entitled “CarMax Reports First Quarter Fiscal 2027 Results.” | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CARMAX, INC. | ||||||||
| (Registrant) | ||||||||
| Dated: June 17, 2026 | By: /s/ Enrique N. Mayor-Mora | |||||||
| Enrique N. Mayor-Mora | ||||||||
| Executive Vice President and | ||||||||
| Chief Financial Officer | ||||||||
CARMAX REPORTS FIRST QUARTER FISCAL 2027 RESULTS
Introduces Strategy for Growth
Richmond, Va., June 17, 2026 – CarMax, Inc. (NYSE:KMX) today reported results for the first quarter ended May 31, 2026.
First Quarter Highlights:(1)
•CEO Keith Barr announces CarMax's four-pillar strategic framework with the objective of delivering strong unit and earnings growth that enables CarMax to consistently reward shareholders.
•Net revenues rose 6.2% to $8.0 billion.
•Combined retail and wholesale unit sales of 392,357, an increase of 3.3%.
•Retail used unit sales increased slightly and comparable store used unit sales declined 0.8%; gross profit per retail used unit of $2,177 declined from last year’s all-time record by $230, reflecting the continuation of pricing actions implemented to drive an improved sales trend.
•Wholesale units increased 8.4%; gross profit per wholesale unit of $1,046, in line with the prior year.
•Extended Protection Plans (EPP) margin per retail unit of $580, an increase of $8 per unit.
•Bought 322,000 vehicles from consumers and dealers, a decrease of 4.4%.
•SG&A expenses decreased 3.7% or $24.5 million to $635.2 million. Ongoing cost reduction efforts, combined with total unit growth, drove strong SG&A leverage of 6.8% to $1,619 per total unit, an improvement of $118 per total unit.
•CarMax Auto Finance (CAF) penetration expanded 150 basis points year over year to 43.3%, reflecting continued execution of our full spectrum growth strategy. Delivered $140.2 million in CAF income, a slight decrease of 1.0%.
•Net earnings per diluted share of $1.31 versus $1.38 a year ago.
(1) Comparisons to the prior year’s first quarter unless otherwise stated.
-more-
CarMax, Inc.
Page 2 of 13
CEO Commentary:
“I came to CarMax because I saw a strong foundation, an award-winning, people-first culture, and significant potential to unlock growth. Three months in, I am more convinced than ever that this is a business with everything it needs to thrive," said Keith Barr, President and Chief Executive Officer.
“We are entering this fiscal year with a clear strategy that is driving early results,” he continued. “We have identified four strategic pillars that will meaningfully improve how we operate at scale and support strong performance. Our goal is clear: deliver strong unit sales and earnings growth that enables us to consistently reward our shareholders.”
Strategy for Growth:
CarMax’s 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 through a seamless experience
•Better connect digital capabilities with in-store experiences to improve conversion and customer satisfaction
3.Add Value on Each Transaction - grow profitability by maximizing value across all aspects of our business
•Grow long-term profitability across the CAF and Extended Protection Plan (EPP) businesses
4.Run Lean - reimagine our cost structure 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 plans to host a Strategic Update in late Fall to share additional detail on key initiatives and milestones underlying our Strategy for Growth.
First Quarter Business Performance Review:
Sales. Total net revenues rose 6.2% to $8.0 billion compared to the prior year’s first quarter. Combined retail and wholesale used vehicle unit sales were 392,357, an increase of 3.3% from the prior year’s first quarter.
Total retail used vehicle unit sales increased slightly to 230,293 compared to 230,210 in the prior year’s first quarter, which benefited from tariff-driven demand. Comparable store used unit sales decreased 0.8% from the prior year’s first quarter. Total retail used vehicle revenues increased 4.7% compared with the prior year’s first quarter, driven by an increase in average retail selling price of approximately $1,200 per unit or 4.5%.
Total wholesale vehicle unit sales increased 8.4% to 162,064 versus the prior year’s first quarter. Total wholesale revenues increased 14.0% compared with the prior year’s first quarter due to an increase in wholesale units sold and an increase in the average wholesale selling price of approximately $400 per unit or 5.1%.
We bought 322,000 vehicles from consumers and dealers, down 4.4% compared to last year’s first quarter. Of these vehicles, 281,000 were bought from consumers and 41,000 were bought through dealers, a decrease of 2.5% and 15.4%, respectively, from last year’s first quarter.
-more-
CarMax, Inc.
Page 3 of 13
Our digital capabilities supported 84% of retail unit sales. Omni sales(2) were 70% and online retail sales(3) accounted for 14% of retail unit sales.
Gross Profit. Total gross profit was $854.4 million, down 4.4% versus last year’s first quarter. Retail used vehicle gross profit decreased 9.5% and retail gross profit per used unit was $2,177, down $230 from last year’s all-time record, reflecting the continuation of pricing actions to drive an improved sales trend.
Wholesale vehicle gross profit increased 8.3% versus the prior year’s first quarter, reflecting higher wholesale unit volume and gross profit per unit of $1,046 per unit, which was in line with the prior year’s first quarter.
SG&A. Compared with the first quarter of fiscal 2026, SG&A expenses decreased 3.7% or $24.5 million to $635.2 million, primarily driven by lower compensation and benefits costs as we make tangible progress toward our targeted SG&A reductions. These reductions were partially offset by higher advertising expense to support sales and buys. SG&A per total unit improved by $118, or 6.8%, to $1,619. We are on track to achieve our targeted SG&A reductions of $200 million in exit rate savings by the end of fiscal year 2027.
CarMax Auto Finance.(4) CAF income was $140.2 million, down 1.0% from the prior year’s first quarter, driven by a decline in auto loans outstanding following the $900 million non‑prime securitization in the third quarter of last year, in which most of the related residual financial interest was sold, which in turn reduced total interest margin. This decrease was largely offset by interest earned on higher margin receivables from our full spectrum growth and servicing income associated with the sale of the residual interest. This quarter’s provision for loan losses, which incorporates CAF’s additional growth into the Tier 2 space, was $95.6 million compared to $101.7 million in the prior year’s first quarter. There was a reduction in this quarter’s provision due to the release of $25.1 million for the allowance previously recorded for loans that are now classified as held for sale.
As of May 31, 2026, the allowance for loan losses of $475.0 million was 2.95% of auto loans held for investment, up from 2.78% as of February 28, 2026.
CAF’s total interest margin percentage, which represents the spread between interest and fees charged to consumers and our funding costs, was 6.7% of average auto loans outstanding, which includes held for investment and held for sale, up 20 basis points from the prior year’s first quarter. After the effect of 3-day payoffs, CAF financed 43.3% of units sold in the current quarter, up from 41.8% in the prior year’s first quarter. CAF’s weighted average contract rate was 11.3% in the quarter, in line with the first quarter last year.
Share Repurchase Activity. During the first quarter of fiscal 2027, we did not repurchase any shares of common stock pursuant to our share repurchase program. As of May 31, 2026, we had $1.31 billion remaining available for repurchase under the outstanding authorization. We remain committed to returning capital to shareholders and intend to resume share repurchases in the future at the appropriate time depending upon market conditions, our leverage, and our capital needs, among other factors.
Location Openings. During the first quarter of fiscal 2027, we opened one stand-alone reconditioning/auction center located in Locust Grove, Georgia.
(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.
-more-
CarMax, Inc.
Page 4 of 13
Supplemental Financial Information
Amounts and percentage calculations may not total due to rounding.
Sales Components
| Three Months Ended May 31 | |||||||||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||||||||
| Used vehicle sales | $ | 6,391.3 | $ | 6,103.4 | 4.7 | % | |||||||||||
| Wholesale vehicle sales | 1,427.6 | 1,252.7 | 14.0 | % | |||||||||||||
| Other sales and revenues: | |||||||||||||||||
| Extended protection plan revenues | 133.5 | 131.7 | 1.4 | % | |||||||||||||
| Third-party finance fees, net | (4.5) | (0.7) | (542.8) | % | |||||||||||||
Advertising & subscription revenues (1) | 36.7 | 36.5 | 0.4 | % | |||||||||||||
| Other | 28.9 | 22.9 | 26.2 | % | |||||||||||||
| Total other sales and revenues | 194.6 | 190.4 | 2.2 | % | |||||||||||||
| Total net sales and operating revenues | $ | 8,013.5 | $ | 7,546.5 | 6.2 | % | |||||||||||
(1) Excludes intercompany revenues that have been eliminated in consolidation.
Unit Sales
| Three Months Ended May 31 | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Used vehicles | 230,293 | 230,210 | — | % | |||||||||||||
| Wholesale vehicles | 162,064 | 149,517 | 8.4 | % | |||||||||||||
| Total vehicles | 392,357 | 379,727 | 3.3 | % | |||||||||||||
Average Selling Prices
| Three Months Ended May 31 | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Used vehicles | $ | 27,288 | $ | 26,120 | 4.5 | % | |||||||||||
| Wholesale vehicles | $ | 8,364 | $ | 7,959 | 5.1 | % | |||||||||||
Vehicle Sales Changes
| Three Months Ended May 31 | ||||||||
| 2026 | 2025 | |||||||
| Used vehicle units | — | % | 9.0 | % | ||||
| Used vehicle revenues | 4.7 | % | 7.5 | % | ||||
| Wholesale vehicle units | 8.4 | % | 1.2 | % | ||||
| Wholesale vehicle revenues | 14.0 | % | (0.3) | % | ||||
-more-
CarMax, Inc.
Page 5 of 13
Comparable Store Used Vehicle Sales Changes (1)
| Three Months Ended May 31 | ||||||||
| 2026 | 2025 | |||||||
| Used vehicle units | (0.8) | % | 8.1 | % | ||||
| Used vehicle revenues | 3.8 | % | 6.6 | % | ||||
(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.
Used Vehicle Financing Penetration by Channel (Before the Impact of 3-day Payoffs) (1)
| Three Months Ended May 31 | ||||||||
| 2026 | 2025 | |||||||
CAF (2) | 45.7 | % | 44.4 | % | ||||
Tier 2 (3) | 15.7 | % | 17.7 | % | ||||
Tier 3 (4) | 9.0 | % | 8.0 | % | ||||
Other (5) | 29.6 | % | 29.9 | % | ||||
| Total | 100.0 | % | 100.0 | % | ||||
(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.
Selected Operating Ratios
| Three Months Ended May 31 | |||||||||||||||||
| (In millions) | 2026 | % (1) | 2025 | % (1) | |||||||||||||
| Net sales and operating revenues | $ | 8,013.5 | 100.0 | $ | 7,546.5 | 100.0 | |||||||||||
| Gross profit | $ | 854.4 | 10.7 | $ | 893.6 | 11.8 | |||||||||||
| CarMax Auto Finance income | $ | 140.2 | 1.8 | $ | 141.7 | 1.9 | |||||||||||
Selling, general, and administrative expenses | $ | 635.2 | 7.9 | $ | 659.6 | 8.7 | |||||||||||
| Interest expense | $ | 33.8 | 0.4 | $ | 27.1 | 0.4 | |||||||||||
| Earnings before income taxes | $ | 258.6 | 3.2 | $ | 283.1 | 3.8 | |||||||||||
| Net earnings | $ | 185.6 | 2.3 | $ | 210.4 | 2.8 | |||||||||||
(1)Calculated as a percentage of net sales and operating revenues.
-more-
CarMax, Inc.
Page 6 of 13
Gross Profit (1)
| Three Months Ended May 31 | |||||||||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||||||||
| Used vehicle gross profit | $ | 501.4 | $ | 554.2 | (9.5) | % | |||||||||||
| Wholesale vehicle gross profit | 169.5 | 156.6 | 8.3 | % | |||||||||||||
| Other gross profit | 183.5 | 182.8 | 0.4 | % | |||||||||||||
| Total | $ | 854.4 | $ | 893.6 | (4.4) | % | |||||||||||
(1) Amounts are net of intercompany eliminations.
Gross Profit per Unit (1)
| Three Months Ended May 31 | ||||||||||||||
| 2026 | 2025 | |||||||||||||
$ per unit(2) | %(3) | $ per unit(2) | %(3) | |||||||||||
| Used vehicle gross profit per unit | $ | 2,177 | 7.8 | $ | 2,407 | 9.1 | ||||||||
| Wholesale vehicle gross profit per unit | $ | 1,046 | 11.9 | $ | 1,047 | 12.5 | ||||||||
| Other gross profit per unit | $ | 797 | 94.4 | $ | 794 | 96.1 | ||||||||
(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.
SG&A Expenses (1)
| Three Months Ended May 31 | |||||||||||||||||
| (In millions except per unit data) | 2026 | 2025 | Change | ||||||||||||||
| Compensation and benefits: | |||||||||||||||||
Compensation and benefits, excluding share-based compensation expense | $ | 329.6 | $ | 349.0 | (5.6) | % | |||||||||||
| Share-based compensation expense | 39.7 | 45.6 | (12.9) | % | |||||||||||||
Total compensation and benefits (2) | $ | 369.3 | $ | 394.6 | (6.4) | % | |||||||||||
| Occupancy costs | 66.8 | 68.9 | (3.0) | % | |||||||||||||
| Advertising expense | 75.9 | 67.9 | 11.8 | % | |||||||||||||
Other overhead costs (3) | 123.2 | 128.2 | (4.0) | % | |||||||||||||
| Total SG&A expenses | $ | 635.2 | $ | 659.6 | (3.7) | % | |||||||||||
| SG&A per total unit | $ | 1,619 | $ | 1,737 | (6.8) | % | |||||||||||
(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.
-more-
CarMax, Inc.
Page 7 of 13
Components of CAF Income and Other CAF Information
| Three Months Ended May 31 | ||||||||
| (In millions) | 2026 | 2025 | ||||||
| Interest margin: | ||||||||
| Interest and fee income | $ | 460.9 | $ | 485.4 | ||||
| Interest expense | (184.2) | (197.5) | ||||||
| Total interest margin | 276.7 | 287.9 | ||||||
| Provision for loan losses | (95.6) | (101.7) | ||||||
Total interest margin after provision for loan losses | 181.1 | 186.2 | ||||||
| Servicing income | 4.2 | — | ||||||
| Total direct expenses | (45.1) | (44.5) | ||||||
| CarMax Auto Finance income | $ | 140.2 | $ | 141.7 | ||||
Average auto loans outstanding (1) | $ | 16,533.7 | $ | 17,719.9 | ||||
| Total interest margin as a percent of average auto loans outstanding | 6.7 | % | 6.5 | % | ||||
Net auto loans originated (1) | $ | 2,445.1 | $ | 2,318.5 | ||||
Net penetration rate (1) | 43.3 | % | 41.8 | % | ||||
Weighted average contract rate (1) | 11.3 | % | 11.4 | % | ||||
| Ending allowance for loan losses | $ | 475.0 | $ | 474.2 | ||||
(1)Includes auto loans held for investment and auto loans held for sale.
Earnings Highlights
| Three Months Ended May 31 | |||||||||||||||||
| (In millions except per share data) | 2026 | 2025 | Change | ||||||||||||||
| Net earnings | $ | 185.6 | $ | 210.4 | (11.8) | % | |||||||||||
Diluted weighted average shares outstanding | 142.1 | 152.6 | (6.9) | % | |||||||||||||
| Net earnings per diluted share | $ | 1.31 | $ | 1.38 | (5.1) | % | |||||||||||
-more-
CarMax, Inc.
Page 8 of 13
Conference Call Information
We will host a conference call for investors at 8:00 a.m. ET today, June 17, 2026. Domestic investors may access the call at 1-800-225-9448 (international callers dial 1-203-518-9708). The conference I.D. for both domestic and international callers is 3171396. A live webcast of the call will be available on our investor information home page at investors.carmax.com. An investor presentation is also available on the website.
A replay of the webcast will be available on the company’s website at investors.carmax.com through September 28, 2026, or via telephone (for approximately one week) by dialing 1-800-839-1247 (or 1-402-220-0470 for international access) and entering the conference ID 3171396.
Second Quarter Fiscal 2027 Earnings Release Date
We currently plan to release results for the second quarter ending August 31, 2026, on Tuesday, September 29, 2026, before the opening of trading on the New York Stock Exchange. We plan to host a conference call for investors at 8:00 a.m. ET on that date. Information on this conference call will be available on our investor information home page at investors.carmax.com in early September 2026.
About CarMax
CarMax, the nation’s largest retailer of used autos, revolutionized the automotive retail industry by driving integrity, honesty and transparency in every interaction. The company offers a truly personalized experience with the option for customers to do as much, or as little, online and in-store as they want. During the fiscal year that ended February 28, 2026, CarMax sold approximately 780,000 used vehicles and 540,000 wholesale vehicles at its auctions. In addition, CarMax Auto Finance originated $8 billion in auto loans during fiscal 2026, adding to its $16 billion portfolio. CarMax has more than 255 store locations, approximately 28,000 associates, and is proud to have been recognized for 22 consecutive years as one of the Fortune 100 Best Companies to Work For®. CarMax is committed to helping its communities thrive and reducing the environmental footprint of its operations. Learn more in the 2026 Responsibility Report. For more information, visit www.carmax.com.
Forward-Looking Statements
We caution readers that the statements contained in this release that are not statements of historical fact, including statements about our future business plans, operations, challenges, opportunities or prospects, including without limitation any statements or factors regarding our recent leadership transition, four-pillar strategic framework, operating capacity, sales, inventory, market share, financial and operational targets and goals, revenue, margins, expenses, liquidity, loan originations, capital expenditures, share repurchase plans, debt obligations or earnings, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of words such as “anticipate,” “believe,” “commit,” “could,” “enable,” “encourage,” “estimate,” “expect,” “focus on,” “intend,” “may,” “on track,” “outlook,” “plan,” “position,” “predict,” “should,” “target,” “will” and other variations of these words or similar expressions, whether in the negative or affirmative. Such forward-looking statements are based upon management’s current knowledge, expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially from anticipated results. Among the factors that could cause actual results and outcomes to differ materially from those contained in the forward-looking statements are the following:
-more-
CarMax, Inc.
Page 9 of 13
•Changes in the competitive landscape and/or our failure to successfully adjust to such changes.
•Changes in general or regional U.S. economic conditions, including economic downturns, inflationary pressures, fluctuating interest rates, tariffs, the effect of trade policies or related uncertainties, and the potential impact of international events (including the conflict in the Middle East).
•Changes in the availability or cost of capital and working capital financing, including changes related to the asset-backed securitization market.
•Events that damage our reputation or harm the perception of the quality of our brand.
•Significant changes in prices of new and used vehicles.
•A reduction in the availability of or access to sources of inventory or a failure to expeditiously liquidate inventory.
•The failure or inability to realize the expected benefits and objectives associated with our four-pillar strategic framework.
•Our inability to realize the benefits associated with our omni-channel platform or initiatives designed to leverage evolving technologies, including AI.
•Factors related to geographic and sales growth, including the inability to effectively manage our growth.
•Our inability to recruit, develop and retain associates and maintain positive associate relations.
•The loss of key associates from our store, regional or corporate management teams, the failure to effectively execute key executive succession plans, disruptions associated with leadership transitions, or a significant increase in labor costs.
•Changes in economic conditions or other factors that result in greater credit losses for CAF’s portfolio of auto loans than anticipated.
•The failure or inability to realize the benefits associated with our strategic investments.
•Changes in consumer credit availability provided by our third-party finance providers.
•Changes in the availability of extended protection plan products from third-party providers.
•The performance of the third-party vendors we rely on for key components of our business.
•Adverse conditions affecting one or more automotive manufacturers.
•The inaccuracy of estimates and assumptions used in the preparation of our financial statements, or the effect of new accounting requirements or changes to U.S. generally accepted accounting principles.
•The failure or inability to adequately protect our intellectual property.
•The occurrence of severe weather events.
•The failure or inability to meet our environmental goals or satisfy related disclosure requirements.
•Factors related to the geographic concentration of our stores.
•Security breaches or other events that result in the misappropriation, loss or other unauthorized disclosure of confidential customer, associate or corporate information.
•The failure of or inability to sufficiently enhance key information systems.
•Factors related to the regulatory and legislative environment in which we operate.
•The effect of evolving regulations, disclosure requirements, standards and expectations relating to environmental, social and governance matters.
•The effect of various litigation matters.
•The volatility in the market price for our common stock.
•The impact of potential shareholder activism.
For more details on factors that could affect expectations, see our Annual Report on Form 10-K for the fiscal year ended February 28, 2026, and our quarterly or current reports as filed with or furnished to the U.S. Securities and Exchange Commission. Our filings are publicly available on our investor information home page at investors.carmax.com. Requests for information may also be made to the Investor Relations Department by email to investor_relations@carmax.com or by calling (804) 747-0422 x7865. We undertake no obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
-more-
CarMax, Inc.
Page 10 of 13
Contacts:
Investors:
David Lowenstein, Vice President, Investor Relations
investor_relations@carmax.com, (804) 747-0422 x7865
Media:
pr@carmax.com, (855) 887-2915
-more-
CarMax, Inc.
Page 11 of 13
CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
| Three Months Ended May 31 | ||||||||||||||
| (In thousands except per share data) | 2026 | %(1) | 2025 | %(1) | ||||||||||
| SALES AND OPERATING REVENUES: | ||||||||||||||
| Used vehicle sales | $ | 6,391,332 | 79.8 | $ | 6,103,440 | 80.9 | ||||||||
| Wholesale vehicle sales | 1,427,635 | 17.8 | 1,252,738 | 16.6 | ||||||||||
| Other sales and revenues | 194,552 | 2.4 | 190,363 | 2.5 | ||||||||||
| NET SALES AND OPERATING REVENUES | 8,013,519 | 100.0 | 7,546,541 | 100.0 | ||||||||||
| COST OF SALES: | ||||||||||||||
| Used vehicle cost of sales | 5,889,979 | 73.5 | 5,549,257 | 73.5 | ||||||||||
| Wholesale vehicle cost of sales | 1,258,144 | 15.7 | 1,096,167 | 14.5 | ||||||||||
| Other cost of sales | 10,982 | 0.1 | 7,494 | 0.1 | ||||||||||
| TOTAL COST OF SALES | 7,159,105 | 89.3 | 6,652,918 | 88.2 | ||||||||||
| GROSS PROFIT | 854,414 | 10.7 | 893,623 | 11.8 | ||||||||||
| CARMAX AUTO FINANCE INCOME | 140,241 | 1.8 | 141,650 | 1.9 | ||||||||||
Selling, general, and administrative expenses | 635,175 | 7.9 | 659,643 | 8.7 | ||||||||||
| Depreciation and amortization | 69,213 | 0.9 | 65,739 | 0.9 | ||||||||||
| Interest expense | 33,811 | 0.4 | 27,070 | 0.4 | ||||||||||
| Other income | (2,101) | — | (309) | — | ||||||||||
| Earnings before income taxes | 258,557 | 3.2 | 283,130 | 3.8 | ||||||||||
| Income tax provision | 72,930 | 0.9 | 72,749 | 1.0 | ||||||||||
| NET EARNINGS | $ | 185,627 | 2.3 | $ | 210,381 | 2.8 | ||||||||
| WEIGHTED AVERAGE COMMON SHARES: | ||||||||||||||
| Basic | 141,847 | 152,137 | ||||||||||||
| Diluted | 142,148 | 152,607 | ||||||||||||
| NET EARNINGS PER SHARE: | ||||||||||||||
| Basic | $ | 1.31 | $ | 1.38 | ||||||||||
| Diluted | $ | 1.31 | $ | 1.38 | ||||||||||
(1) Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding.
-more-
CarMax, Inc.
Page 12 of 13
CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| As of | ||||||||||||||||||||
| May 31 | February 28 | May 31 | ||||||||||||||||||
| (In thousands except share data) | 2026 | 2026 | 2025 | |||||||||||||||||
| ASSETS | ||||||||||||||||||||
| CURRENT ASSETS: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 132,223 | $ | 122,826 | $ | 262,819 | ||||||||||||||
| Restricted cash from collections on auto loans held for investment | 595,103 | 592,033 | 584,277 | |||||||||||||||||
| Accounts receivable, net | 263,919 | 204,453 | 200,305 | |||||||||||||||||
| Auto loans held for sale | 618,979 | 100,491 | 637,947 | |||||||||||||||||
| Inventory | 4,062,765 | 4,137,005 | 3,624,353 | |||||||||||||||||
| Other current assets | 161,340 | 153,594 | 142,890 | |||||||||||||||||
| TOTAL CURRENT ASSETS | 5,834,329 | 5,310,402 | 5,452,591 | |||||||||||||||||
| Auto loans held for investment, net | 15,689,952 | 15,952,291 | 16,802,744 | |||||||||||||||||
| Property and equipment, net | 4,079,993 | 4,070,293 | 3,909,977 | |||||||||||||||||
| Deferred income taxes | 72,917 | 78,479 | 141,183 | |||||||||||||||||
| Operating lease assets | 451,441 | 459,514 | 482,613 | |||||||||||||||||
| Goodwill | — | — | 141,258 | |||||||||||||||||
| Other assets | 498,266 | 496,924 | 456,039 | |||||||||||||||||
| TOTAL ASSETS | $ | 26,626,898 | $ | 26,367,903 | $ | 27,386,405 | ||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
| CURRENT LIABILITIES: | ||||||||||||||||||||
| Accounts payable | $ | 1,056,719 | $ | 1,117,976 | $ | 980,499 | ||||||||||||||
| Accrued expenses and other current liabilities | 417,841 | 475,495 | 409,003 | |||||||||||||||||
| Accrued income taxes | 54,191 | 2,019 | 79,412 | |||||||||||||||||
| Current portion of operating lease liabilities | 56,988 | 57,341 | 58,332 | |||||||||||||||||
| Current portion of long-term debt | 17,234 | 217,323 | 217,319 | |||||||||||||||||
| Current portion of non-recourse notes payable | 554,081 | 544,651 | 532,787 | |||||||||||||||||
| TOTAL CURRENT LIABILITIES | 2,157,054 | 2,414,805 | 2,277,352 | |||||||||||||||||
| Long-term debt, excluding current portion | 2,061,271 | 2,006,217 | 1,366,176 | |||||||||||||||||
| Non-recourse notes payable, excluding current portion | 15,499,705 | 15,254,330 | 16,639,622 | |||||||||||||||||
| Operating lease liabilities, excluding current portion | 453,352 | 464,696 | 470,912 | |||||||||||||||||
| Other liabilities | 336,931 | 338,999 | 345,434 | |||||||||||||||||
| TOTAL LIABILITIES | 20,508,313 | 20,479,047 | 21,099,496 | |||||||||||||||||
| Commitments and contingent liabilities | ||||||||||||||||||||
| SHAREHOLDERS’ EQUITY: | ||||||||||||||||||||
| Common stock, $0.50 par value; 350,000,000 shares authorized; 141,909,099 and 141,799,070 shares issued and outstanding as of May 31, 2026 and February 28, 2026, respectively | 70,955 | 70,900 | 75,291 | |||||||||||||||||
| Capital in excess of par value | 1,834,058 | 1,810,223 | 1,899,003 | |||||||||||||||||
| Accumulated other comprehensive loss | (13,914) | (34,126) | (8,246) | |||||||||||||||||
| Retained earnings | 4,227,486 | 4,041,859 | 4,320,861 | |||||||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 6,118,585 | 5,888,856 | 6,286,909 | |||||||||||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 26,626,898 | $ | 26,367,903 | $ | 27,386,405 | ||||||||||||||
-more-
CarMax, Inc.
Page 13 of 13
CARMAX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Three Months Ended May 31 | |||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| OPERATING ACTIVITIES: | |||||||||||
| Net earnings | $ | 185,627 | $ | 210,381 | |||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 92,895 | 79,784 | |||||||||
| Share-based compensation expense | 41,946 | 46,981 | |||||||||
| Provision for loan losses | 95,584 | 101,707 | |||||||||
| Provision for cancellation reserves | 26,166 | 24,803 | |||||||||
| Deferred income tax (benefit) provision | (991) | 2,782 | |||||||||
| Other | (3,252) | 1,310 | |||||||||
| Net (increase) decrease in: | |||||||||||
| Accounts receivable, net | (59,466) | (11,572) | |||||||||
| Auto loans held for sale | (518,488) | (637,947) | |||||||||
| Inventory | 74,240 | 310,269 | |||||||||
| Other current assets | 6,487 | 2,692 | |||||||||
| Auto loans held for investment, net | 166,755 | 338,338 | |||||||||
| Other assets | (8,146) | (5,712) | |||||||||
| Net decrease in: | |||||||||||
| Accounts payable, accrued expenses and other | |||||||||||
| current liabilities and accrued income taxes | (58,274) | (141,867) | |||||||||
| Other liabilities | (23,494) | (22,406) | |||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 17,589 | 299,543 | |||||||||
| INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures | (103,335) | (136,736) | |||||||||
| Proceeds from disposal of property and equipment | 63 | 48 | |||||||||
| Purchases of investments | (1,668) | (4,926) | |||||||||
| Sales and returns of investments | 845 | 425 | |||||||||
| Principal payments received on beneficial interests | 4,469 | — | |||||||||
| NET CASH USED IN INVESTING ACTIVITIES | (99,626) | (141,189) | |||||||||
| FINANCING ACTIVITIES: | |||||||||||
| Proceeds from issuances of long-term debt | 1,517,800 | 87,000 | |||||||||
| Payments on long-term debt | (1,669,622) | (90,930) | |||||||||
| Cash paid for debt issuance costs | (6,048) | (8,895) | |||||||||
| Payments on finance lease obligations | (4,084) | (3,443) | |||||||||
| Issuances of non-recourse notes payable | 3,261,564 | 3,988,864 | |||||||||
| Payments on non-recourse notes payable | (3,006,781) | (3,906,323) | |||||||||
| Repurchase and retirement of common stock | (2,308) | (204,027) | |||||||||
| Equity issuances | — | 8,329 | |||||||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 90,521 | (129,425) | |||||||||
| Increase in cash, cash equivalents, and restricted cash | 8,484 | 28,929 | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of year | 862,850 | 960,310 | |||||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | $ | 871,334 | $ | 989,239 | |||||||
# # #
FAQ
How did CarMax (KMX) perform financially in the first quarter of fiscal 2027?
CarMax grew net sales and operating revenues 6.2% to $8.0 billion in the first quarter of fiscal 2027. Combined retail and wholesale unit sales increased 3.3% to 392,357 vehicles, but lower gross margin led to net earnings of $185.6 million, down 11.8% year over year.
How did CarMax (KMX) vehicle sales and pricing trend in the latest quarter?
CarMax sold 392,357 vehicles in total, up 3.3% year over year. Used vehicle revenues rose 4.7% as average retail selling price increased about $1,200 or 4.5% per unit. Wholesale vehicle revenues increased 14.0% on higher units and a roughly $400 or 5.1% higher average wholesale price.
What is the status of CarMax (KMX) margins and SG&A costs this quarter?
Total gross profit was $854.4 million, down 4.4%, with retail used gross profit per unit at $2,177, $230 below last year’s record. SG&A expenses decreased 3.7% to $635.2 million, improving SG&A per total unit by $118 or 6.8% to $1,619.
How did CarMax Auto Finance (CAF) perform in the quarter for KMX?
CarMax Auto Finance generated income of $140.2 million, down 1.0% from the prior-year quarter. Total interest margin was 6.7% of average auto loans outstanding, up 20 basis points, and CAF financed 43.3% of units sold after the effect of three-day payoffs.
What new debt facility did CarMax (KMX) enter into in June 2026?
On June 15, 2026, CarMax and a subsidiary entered a $500 million Term Loan Facility maturing June 15, 2029. Proceeds were used to pay down borrowings under its $2.0 billion unsecured revolving credit facility and for working capital and general corporate purposes.
What strategic framework did CarMax (KMX) introduce with these results?
CarMax’s CEO outlined a four-pillar strategy: a Great Offering with competitive pricing and inventory, an Easy Experience through better omni-channel integration, Add Value on Each Transaction via CAF and EPP, and Run Lean by reducing reconditioning and SG&A costs over time.