CarMax Q2 2027 earnings: profit and sales beat estimates as used-car demand rebounds
CarMax topped profit and sales forecasts by a wide margin as used-car sales and its lending arm both rebounded, though per-car profit dipped slightly.
| Q2 2027 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $1.16 | $0.72 | +61.1% |
| Revenue | $7.88B | $7.05B | +11.8% |
Key takeaways
- CarMax beat Wall Street expectations by a wide margin: adjusted earnings came in at $1.16 per share versus roughly $0.72 expected, and revenue of about $7.88 billion topped the roughly $7.05 billion analysts had forecast. Earnings per share were up 81% from the same quarter last year.
- The growth came from selling more cars: comparable-store used-vehicle sales rose about 13%, and combined retail-plus-wholesale unit sales climbed roughly 15%, showing more shoppers completing purchases both in stores and online.
- CarMax’s in-house lender, CarMax Auto Finance, earned $136 million in the quarter, up 32% year over year, partly by expanding loans to “Tier 2” customers (buyers with less-than-prime credit) — a group it financed at more than double last year’s rate. Management flagged that pushing further into this riskier lending means full-year financing income is still expected to land slightly below last year’s level.
- Profit earned on each car sold slipped a bit ($2,105 per retail unit, down $111 from a year ago) because CarMax kept prices competitive to keep sales moving — a trade-off of taking a bit less per car in exchange for selling more of them.
- The trailing-twelve-month fundamentals on this page — a net profit margin under 1% and revenue and earnings still down from a year earlier — reflect the tougher stretch CarMax is emerging from; they haven’t yet caught up to this quarter’s rebound, which management credited to its ongoing turnaround plan (branded internally as “Shift into Gear”).
- CarMax said it plans to resume share buybacks next quarter, a sign management is comfortable with the company’s cash position after the improved results.
- Coverage of the release noted CarMax has also been cutting jobs as part of the broader cost and efficiency push tied to its turnaround strategy.
Q2 2027 in context
| Metric | Aug 2026 | Aug 2025 | Change |
|---|---|---|---|
| Revenue | $7.9B | $6.6B | +19.5% |
| Net income | $165M | $95M | +73.3% |
| Free cash flow | $806M | $654M | +23.2% |
| Diluted EPS | $1.16 | $0.64 | +81.2% |
| Gross margin | 10.1% | 10.9% | -0.7 pts |
| Net margin | 2.1% | 1.4% | +0.7 pts |
Figures for the quarter ended Aug 2026 and the quarter ended Aug 2025, as reported to the SEC.
How the stock took it
Carmax Inc closed at $56.55 on Sep 28, 2026, the last session before the report, and at $55.11 on Sep 30, 2026, the first session after it — -2.5% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 10.5% | Trailing 12 months |
| Operating margin | 1.4% | Trailing 12 months |
| Net profit margin | 0.8% | Trailing 12 months |
| Pretax margin | 1.4% | Trailing 12 months |
| EPS | $1.52 | Trailing 12 months |
| Revenue growth (YoY) | -1.6% | Trailing 12 months |
| EPS growth (YoY) | -58.0% | Trailing 12 months |
| Return on equity | 3.7% | Trailing 12 months |
Sources: company report · earnings call · Automotive News