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CarMax (KMX) stock: EPS jumps 81 percent to $1.16 as Buybacks resume in Q3. CarMax posted a broad earnings beat on September 29, with second-quarter EPS of $1.16, up 81 percent from a year ago. Revenue rose 19.5 percent to $7.9 billion, used retail comps grew 13 percent, and the company said it will resume share repurchases this quarter after a long pause. The setup. The used-car market has been rough for two years, with sluggish affordability and high loan rates pressuring demand. CarMax's results show the company winning share anyway. Management credited its Shift into GEAR strategy, which emphasizes competitive pricing, a redesigned extended protection plan, wider financing options, and lower costs. Analysts expected about $0.73 in EPS and $7.03 billion in revenue, so the print cleared both bars by a wide margin. Shares rose more than 6 percent in premarket trading to near $60 after closing at $56.55 the day before. Key numbers from the quarter. | Metric | Q2 FY2027 result | Change | | Diluted EPS | $1.16 | Up 81.3 percent from $0.64 | | Total revenue | $7.9 billion | Up 19.5 percent | | Used retail comps | Up 13 percent | Industry roughly flat to down 1 percent | | Vehicles sold, retail and wholesale | About 388,000 | Up 15 percent | | Total gross profit | $799 million | Up 11 percent | | CarMax Auto Finance income | $135.6 million | Up 32.1 percent | Why earnings grew faster than sales. The beat came from several levers working at once. Extended protection plan margin per retail unit rose $46 to $623. Auto finance income jumped 32 percent as the loan-loss provision fell $28.8 million from a year ago. SG&A grew just 4.6 percent while units climbed 15 percent, meaning overhead per unit improved by $157, or 8.8 percent. Retail gross profit per unit fell $111 to $2,105, which management framed as a deliberate choice. The company lowered prices to win customers, then made up the difference through volume, service, protection products, and cost cuts. The strategy showed up directly in the comp growth, which ran about 14 points ahead of the overall used-car market. What buybacks mean for shareholders. CarMax has $1.31 billion of repurchase authorization remaining. Management plans to restart the program in the third fiscal quarter at a modest pace, below the average quarterly run rate from before the pause. The table shows the shareholder-return picture. | Item | Amount | | Repurchase authorization remaining | $1.31 billion | | Buyback pace, Q3 FY2027 | Modest, below pre-pause average | | SG&A savings target, exit rate | $200 million by end of fiscal 2027 | | Expected severance charge, Q3 | About $6 million | | Pension settlement charges, over time | About $50 million | Buybacks at current prices retire more shares per dollar than they did when the stock traded near its 52-week high of $65.28. A buyer purchasing CarMax today alongside management gets a shrinking share count and a cost base falling by hundreds of millions of dollars. What to watch. * GPU guidance. Management now expects full-year retail gross profit per unit to decline less than the $200 previously guided. Third and fourth quarters should still show declines, but smaller ones. * Financing costs. CarMax Auto Finance depends on securitization markets and consumer credit. The weighted average contract rate hit 11.8 percent, up 60 basis points year over year, and higher rates could cool demand. * Loan losses. The allowance for loan losses rose to 3.07 percent of loans held for investment, up from 2.95 percent in May. Tier 2 originations are growing, which carries higher expected loss rates by design. * The November 3 strategic update. Management will lay out growth plans and milestones at a virtual event, which is the next scheduled catalyst for the stock. Bottom line. The quarter shows a retailer executing well in a hard market: 13 percent comps against a flat industry, SG&A discipline, and a buyback restarting. Risks sit in credit costs and used-vehicle affordability. With the stock near the top of its 52-week range, most of the beat is likely already priced in, but the cost cuts and share repurchases give the story room to run.

CarMax rebounds in Q2 while installing 2 new execs to reinforce Shift into GEAR strategy. New CarMax CEO Keith Barr. Image courtesy of CarMax. Tuesday, Sep. 29, 2026, 03:33 PM Auto Remarketing Staff By subscribing, you agree to receive communications from Auto Remarketing and its partners in accordance with its Privacy Policy. Auto Remarketing may share your information with select partners and sponsors who may contact you about their products and services. You may unsubscribe at any time. CarMax rebounded in multiple operational and performance ways during the second quarter of its 2027 fiscal year; a span that also included a workforce reduction of almost 150 employees. The used-car retailer on Tuesday also promoted an executive and announced the hiring of another one previously with a captive finance company to go with plans to host a "virtual strategic update" when CarMax said it will provide details on its "strategy for growth, key initiatives and milestones." Before that virtual session unfolds on Nov. 3, CarMax president and chief executive officer Keith Barr evaluated the Q2 financial statement, saying through a news release, "Its strong second quarter results reflect solid execution and early progress against Shift into GEAR, its four-pillar strategy to strengthen CarMax's core business and return the company to sustained growth. "We have a clear strategy, a solid foundation, and an exceptional team accelerating our progress to create long-term value for our shareholders," continued Barr, who took over as the CarMax boss on March 16. CarMax reiterated what Shift into GEAR entails, including: * Great offering: Give customers every reason to choose CarMax "Price competitively across demand cycles while growing saleable inventory and providing customers faster access to our vehicles." By subscribing, you agree to receive communications from Auto Remarketing and its partners in accordance with its Privacy Policy. Auto Remarketing may share your information with select partners and sponsors who may contact you about their products and services. You may unsubscribe at any time. * Easy experience: Make it easy to do business with Auto Remarketing, both online and in stores. "Better connect digital capabilities with in-store experiences to improve conversion and customer satisfaction." * Add value: Grow profitability by maximizing value across all aspects of its business "Grow long-term profitability across our (CarMax Auto Finance) and (Extended Protection Plan) businesses." * Run lean: Unlock efficiencies to enable a great offering "Lower reconditioning costs through technology and operational efficiency while continuing to deliver the high-quality vehicles customers expect from CarMax, enhance our logistics network, and continue to reduce SG&A." Perhaps that last pillar is what created the recent workforce reduction, which CarMax said in a separate statement that the moves involved approximately 145 associates in Richmond, Va., Dallas and Atlanta and in the CarMax Auto Finance and Edmunds divisions. "These changes will help us move faster and create better alignment across teams. By running leaner as an organization, we are positioning CarMax to be more competitive, drive sustainable growth, and provide even more value for our customers," the company said in that statement sent to Auto Remarketing. "Our primary focus is supporting our associates throughout this transition," CarMax continued. "Auto Remarketing is grateful for their contributions to CarMax and are committed to supporting them as they take their next step. Auto Remarketing is providing resources to the associates who are impacted, including providing severance, outplacement support, and the opportunity to apply for open internal roles. "We have approximately 70 open corporate roles, as well as many more open field roles, and are working with interested impacted associates to find opportunities to stay with CarMax," the company went on to say. Overall Q2 results. While layoffs certainly are negative, CarMax had plenty of positives to highlight from the second quarter, including: - Total net revenues rose 19.5% to $7.9 billion. - Combined retail and wholesale unit sales of 387,735, an increase of 14.7%. - Retail used unit sales increased 13.8% and comparable store used unit sales increased 13.0%; gross profit per retail used unit of $2,105 declined by $111, reflecting the continuation of pricing actions implemented to support an improved sales trend. - Wholesale units increased 15.9%; gross profit per wholesale unit of $858, a decrease of $135. - Extended Protection Plans (EPP) margin per retail unit of $623, an increase of $46 per unit. - Bought 310,107 vehicles from consumers and dealers, an increase of 5.9%. - SG&A expenses increased 4.6% to $628.6 million, while leveraging robustly by $157, or 8.8%, per total unit. Ongoing cost reduction efforts were offset as Auto Remarketing annualized over materially reduced incentive-based compensation and by variable costs tied to strong unit growth. - CarMax Auto Finance (CAF) income increased 32.1% to $135.6 million. "Our customer promise is to deliver a great car at the right price, with an online and in-store experience that our customers love. All of the steps we have been taking are in service of that promise and to create confidence for the road ahead for our associates, customers and investors," Barr said. "We are encouraged by our performance this quarter and the progress we are making across the business. While we are still early in our journey, the results we are seeing reinforce our confidence in our strategy and the opportunity ahead," he added. "We are steadfast in our focus on delivering the right cars at the right price, making it easier for customers to do business with us, capturing more value from each transaction and operating more efficiently at scale," Barr went on to say. Executive moves. Being a part of CarMax on that journey are two professionals in new executive positions. The company named Elizabeth Dirgins as executive vice president and chief digital and customer officer, a newly created role that will further unify the end-to-end customer experience, from customer acquisition through vehicle transaction. In this capacity, CarMax said Dirgins will oversee the company's marketing, product and Edmunds teams, including the digital tools that support both online and in-store experiences. With more than two decades of digital product and customer experience leadership, Dirgins will join CarMax from Volkswagen Financial Services, where she served as the chief digital officer for its North American region and led digital strategy, customer experience and marketing for the business. Dirgins previously held customer experience and product strategy leadership roles at Capital One, Wells Fargo, and Marriott. She will join CarMax on Oct. 5 and report to Barr. "CarMax has built real trust with customers over decades, and I'm excited to continue to grow this beloved brand," Dirgins said in a news release. "CarMax gives customers the ease of shopping online with the confidence that comes from seeing and confirming their choice in person. My focus will be making sure that we make every step in the customer's car buying and selling journey simple, fast and connected." CarMax also announced the promotion of Jeff Campbell to senior vice president of strategy, leading a newly centralized function that brings together the company's strategy, data science, AI, and pricing teams in order to accelerate key decisions. Campbell joined CarMax in 2016 and has held leadership roles spanning transformation, product and strategy. He most recently served as vice president of product, leading the supply product group and the supply strategy function, while also playing an instrumental role in the development of CarMax's new strategic plan. Campbell came to CarMax from Boston Consulting Group. While his appointment was effective in August, CarMax said Campbell will report to Barr beginning in January. "We have a strong strategic plan for growth and incredible runway ahead," Campbell said in the news release. "I'm excited about my new role and am grateful for the incredible associates I get to work with in this next chapter. Bringing our strategy, data and pricing teams together will give us a clearer, shared view of the business, which will enhance our decision making." Barr elaborated about what this personnel changes mean. "Elizabeth and Jeff both bring the skills, experience and focus we need as we build a faster, more connected company that puts the customer at the center of everything we do," Barr said Keith. "Elizabeth has spent her career building digital experiences and financial products grounded in deep customer understanding, and she'll bring an invaluable perspective to guiding customers through this carefully considered, complex purchase," Barr continued. "Jeff has been instrumental in shaping its strategy over the last decade, and in his new role he will support the delivery of its strategic plan with the speed and alignment it demands. "I know they'll both create confidence for the road ahead for every customer we serve," Barr went on to say.