CarMax Q2 Fiscal 2027 EPS Surges 81% as Revenue Jumps Nearly 20% to $7.9 Billion

CarMax posted a blowout second quarter for fiscal 2027, with revenue rising 19.5% year over year to $7.9 billion against analyst estimates of $7.01 billion. Diluted earnings per share climbed 81.3% to $1.16, well ahead of the $0.74 consensus estimate, while net earnings reached $165.3 million, up 73.3% from the prior-year period and above the $106 million estimate.

Unit sales drove the outperformance. Retail used unit sales grew 13.8% to 227,391 vehicles, with comparable store used unit sales up 13.0%. Wholesale units rose 15.9% to 160,344, bringing combined retail and wholesale unit volume to 387,735, a 14.7% increase. Used vehicle revenue reached $6.3 billion, up 19.7%, while wholesale revenue grew 18.2% to $1.4 billion. Total gross profit came in at $799.5 million, up 11.4% year over year.

Gross profit per retail unit fell $111 to $2,105, a deliberate result of pricing actions the company implemented to strengthen price competitiveness. Gross profit per wholesale unit was $858. CarMax Auto Finance income rose 32.1% to $135.6 million, aided by expanded CAF share of Tier 2 originations. SG&A expenses grew a modest 4.6% to $628.6 million, reflecting the operating leverage the company cited as a key strategic win. Management noted demand remains resilient despite affordability pressure, with the lowest-income customer group roughly flat from a year ago.

CarMax attributed the results to its "Shift into GEAR" strategy, citing stronger price competitiveness, higher Extended Protection Plan margins, and continued digital experience improvements. The company plans to resume share repurchases in Q3 fiscal 2027, with $1.31 billion remaining under its buyback authorization, and has scheduled a strategic update for November 3. KMX shares rose approximately 6.1% in premarket trading and were up around 6.3% by early afternoon.