CarMax Accelerates Used Car Sales Growth, Despite Earnings Miss

CarMax, Inc. (NYSE:KMX) shares are trading higher after the company reported fourth-quarter earnings results.

• Quarterly sales of $6 billion beat the street view of $5.96 billion.
• Retail used unit sales rose by 6.2% Y/Y
• Comparable store used unit sales increased by 5.1% Y/Y
• Wholesale units increased 3.1% Y/Y.
• The company reported earnings per share of 58 cents, missing the analyst consensus estimate of 68 cents.
• CarMax Auto Finance income was $159.3 million, an increase of 8.2 % year over year (Y/Y)
• The provision for loan losses stood at $68.3 million vs. $71.6 million a year ago quarter.
• Gross profit per retail used unit was $2,322 (up $71 per unit), and gross profit per wholesale unit was $1,045 (down $75 per unit).
• The Extended Protection Plan margin increased by $10 per retail unit to $580.
• In the fourth quarter, the company repurchased 1.2 million shares of common stock for $98.5 million.

Buyback: As of Feb. 28, the company had $1.94 billion remaining available for repurchase under the outstanding authorization.

The company exited the quarter with cash and equivalents worth $247 million. Restricted cash from collections on auto loans receivable totaled $559.1 million.

Inventories at quarter-end stood at $3.935 billion.

Outlook: For fiscal year 2026, the company plans to open new store growth of six locations, as well as four stand-alone reconditioning/auction centers.

The company projects capital expenditures of around $575 million in FY26.

The year-over-year increase is mainly due to the timing of land purchases, which were deferred from fiscal year 2025 to fiscal year 2026.

Investors can gain exposure to the stock via Valued Advisers Trust Kovitz Core Equity ETF (NYSE:EQTY) and Invesco S&P 500 Equal Weight Consumer Discretionary ETF (NYSE:RSPD).

Price Action: KMX shares are trading higher by 6.44% to $86.66 premarket at last check Thursday.

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