TLDR
- CarMax stock rose about 3.5% in premarket trading after fiscal second quarter earnings topped Wall Street forecasts.
- Adjusted earnings came in at $1.16 per share, well above the 73 cent estimate analysts expected.
- Revenue grew 20% to $7.9 billion, beating the $7.09 billion consensus call from FactSet.
- Gross profit per used retail vehicle fell to $2,105, though that still beat Wall Street’s $2,022 estimate.
- CarMax said it plans to resume stock buybacks at a modest level in the fiscal third quarter.
CarMax stock climbed Tuesday after the used car retailer posted a stronger than expected fiscal second quarter. The stock rose 3.5% to $58.50 in premarket trading, building on a year that has already outpaced the broader market.
The company reported adjusted earnings of $1.16 per share for the quarter ended August 31. That was up from 64 cents a year earlier and far above the 73 cent estimate analysts had penciled in.
Revenue grew 20% year over year to $7.9 billion. That beat the $7.09 billion consensus estimate compiled by FactSet.
CARMAX $KMX Q2’27 EARNINGS HIGHLIGHTS
🔹 Revenue: $7.9B (Est. $7.01B) 🟢; +19.5% YoY
🔹 EPS: $1.16 (Est. $0.74) 🟢; +81.3% YoY
🔹 Net Earnings: $165.3M (Est. $106M) 🟢; +73.3% YoY
🔹 Total Gross Profit: $799.5M; +11.4% YoYQ2 Metrics:
🔹 Retail Used Units: 227,391; +13.8% YoY…— Wall St Engine (@wallstengine) September 29, 2026
Net income for the quarter reached $165.3 million, compared with $95.4 million a year ago. On a per share basis, that works out to $1.16 versus 64 cents last year.
A Look at Pricing and Volume
Gross profit per used retail vehicle came in at $2,105, down from $2,216 a year earlier. Still, that figure landed above the $2,022 Wall Street had projected.
CarMax said the dip reflected ongoing pricing moves designed to push sales higher rather than protect profit per vehicle. The strategy appears to be working on the volume side.
Combined retail and wholesale used vehicle unit sales rose 15% to 387,735. Retail used vehicle sales alone climbed 13.8% to 227,391 units.
Higher interest rates and a tight supply of cheaper used cars have kept many buyers on the sidelines. Vehicles priced under $15,000 had just 29 days of supply, well below the industry average, according to Cox Automotive.
That shortage has made it tougher for retailers to reach entry level buyers. CarMax appears to have offset some of that pressure by prioritizing volume over margin.
Buybacks Set to Return
CarMax did not repurchase any stock during the second quarter. That is set to change going forward.
In its release, the company said it plans to resume buybacks “at a modest level” in the fiscal third quarter. It pointed to its second quarter performance, ongoing momentum, and improving leverage as the reasons behind the decision.
Wall Street had been split on whether CarMax’s turnaround was truly gaining traction. Optimism had been building since the company’s fiscal first quarter results in June.
Tuesday’s report added weight to that view. The return of buybacks was seen as another sign management feels confident in where the business is heading.
Competitors moved differently on the day. Carvana ticked up 0.2%, AutoNation held flat, and Group 1 Automotive added 0.3%.
CarMax stock has advanced 8.5% since June 17, when it reported fiscal first quarter results. Shares of the company are up 46% this year, comfortably ahead of the S&P 500’s 12% gain over the same period.
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