Carmax Stock Earnings Reports

CarMax reported weaker-than-expected Q2 fiscal 2026 results: total sales of $6.6B (down ~6% YoY), retail units down ~5.4% and used comps down ~6.3%. EPS was $0.64 vs. $0.85 a year ago, driven by lower volume and a CAF (CarMax Auto Finance) loan-loss provision adjustment tied primarily to 2022–2023 vintages. Management cites two main short-term drivers: (1) an inventory ramp ahead of the quarter tied to tariff-related demand that produced roughly $1,000 of depreciation across May–June and pressured price competitiveness, and (2) a modest pull-forward of demand into Q1. Actions taken included lowering retail margin to drive sell-through and intentionally slowing buys (now reversed). Operational highlights: CAF originations exceeded $2B in the quarter with penetration of 42.6% (net of three-day payoffs); CAF NIM was 6.6%; GAAP loan-loss provision was $142M (total reserves $507M, ~3.02% of managed receivables). Management closed a $900M upsized non-prime securitization (25-B) with most of the residual interest sold to third parties (off-balance-sheet), expecting a Q3 gain on sale of $5–30M plus $40–45M of additional CAF income over the life of the transaction. Profitability and cost actions: CarMax reiterated a plan to deliver at least $150M of incremental SG&A reductions over the next 18 months (largely via tech/AI, legacy system retirements, automation, vendor renegotiation), with some of those savings planned for reinvestment (marketing, pricing). Marketing: launched new brand campaign “Wanna Drive” and will increase advertising spend in H2 (notably Q3). Capital allocation: repurchased ~2.9M shares for $180M in Q2 with ~$1.56B remaining authorization. Management remains focused on regaining price competitiveness, driving sales and market share, improving operational efficiency, expanding CAF responsibly across the credit spectrum, and expects its earnings model to deliver high-teen EPS CAGR with mid-single-digit retail unit growth over time.