CarMax, Inc. (NYSE:KMX) has reported its first quarter results for fiscal year 2026, ending on May 31, 2025. The company's net earnings per diluted share increased by 42.3% to $1.38 from $0.97 compared to the same period last year. Retail used unit sales saw a significant increase of 9.0%, with comparable store used unit sales also rising by 8.1%. Total gross profit experienced a substantial 12.8% increase to $893.6 million, driven by higher unit volumes and strong unit margin performance.
The company bought 336,000 vehicles from consumers and dealers, marking a 7.2% increase from the previous year. Additionally, CarMax's extended protection plans (EPP) margin per retail unit increased by $9 per unit to $572, and service margin per retail unit improved by $128 per retail unit.
During this period, CarMax repurchased 3.0 million shares of common stock for $199.8 million. The company also opened two new stand-alone reconditioning/auction centers in El Mirage, Arizona, and Midlothian, Texas, during the first quarter of fiscal 2026.
Total net sales and operating revenues for the quarter were $7,546.5 million, a 6.1% increase from the same period in the previous year. Used vehicle sales amounted to $6,103.4 million, marking a 7.5% increase, while wholesale vehicle sales slightly decreased by 0.3%. Other sales and revenues increased by 6.1%, primarily driven by growth in EPP revenues.
The average selling price for used vehicles decreased by 1.5%, reaching $26,120, while the average selling price for wholesale vehicles decreased by 1.7% to $7,959. Comparable store used vehicle sales also showed positive changes, with a 8.1% increase in used vehicle units and a 6.6% increase in used vehicle revenues.
CarMax's strong performance is further emphasized by its improved operating ratios. Gross profit saw an 11.8% increase to $893.6 million, with SG&A expenses increasing by 3.3% to $659.6 million. CarMax Auto Finance (CAF) income decreased by 3.6% to $141.7 million, primarily due to an increase in the provision for loan losses.
The expansion of CarMax Auto Finance's non-prime funding program is expected to provide significant flexibility in supporting CAF's full spectrum penetration growth plans while mitigating risk. The company's weighted average contract rate remained consistent at 11.4%.
CarMax's positive financial performance in the first quarter of fiscal 2026 showcases its strong growth and strategic initiatives, positioning the company for continued success in the automotive retail industry. Today the company's shares have moved -0.15% to a price of $64.33. For more information, read the company's full 8-K submission here.
