CarMax Inc. has recently released its 10-Q report, providing an insight into its financial performance and operations. CarMax, Inc. is the nation’s largest retailer of used vehicles, operating in two reportable segments: CarMax Sales Operations and CarMax Auto Finance. The CarMax Sales Operations segment includes retail sales of used vehicles, wholesale vehicle sales, extended protection plan products, advertising and subscription revenues, and vehicle repair services. The CarMax Auto Finance segment provides financing to customers buying retail vehicles from CarMax.
In the first three months of fiscal 2026, CarMax reported net sales and operating revenues of $7,546.5 million, marking a 6.1% increase from the same period in fiscal 2025. Gross profit for the same period stood at $893.6 million, reflecting a 12.8% increase. The company's net earnings for the first quarter of fiscal 2026 reached $210.4 million, indicating a 38.0% growth compared to the first quarter of fiscal 2025. In terms of unit sales, CarMax sold 230,210 used units, marking a 9.0% increase, and 149,517 wholesale units, reflecting a 1.2% increase.
CarMax's omni-channel experience aims to provide customers with a seamless platform to buy vehicles on their terms, whether online, in-store, or through a combination of both. The company's digital capabilities and overall experiences have led to a high net promoter score, indicating strong customer satisfaction. In fiscal 2026, CarMax plans to leverage and enhance its capabilities to drive growth through better execution, innovative efforts, and upleveled experiences.
The company's strategic initiatives for fiscal 2026 include leveraging data science and AI to offer better digital experiences, launching a new marketing campaign to highlight its omni-channel experience, streamlining the online appraisal checkout process, and expanding CAF’s participation across the credit spectrum. CarMax also aims to drive down its cost of sales by pursuing incremental efficiency opportunities across its logistics network and reconditioning operations.
As of May 31, 2025, CarMax operated 250 used car stores in 109 U.S. television markets, covering approximately 85% of the U.S. population. The company plans to open six stores and two additional stand-alone reconditioning/auction facilities during the remainder of fiscal 2026. CarMax's earnings model is designed to deliver an earnings per share compound annual growth rate (“CAGR”) in the high teens when used unit growth is in the mid-single digits.
The company's primary ongoing sources of liquidity include funds provided by operations, proceeds from non-recourse funding vehicles, and borrowings under its revolving credit facility. CarMax's current capital allocation strategy focuses on investing in digital capabilities, expanding its store and capacity footprint, pursuing CAF’s expansion into the full credit spectrum, and returning excess capital to shareholders.
Following these announcements, the company's shares moved -0.98%, and are now trading at a price of $66.84. For more information, read the company's full 10-Q submission here.
