CARMAX INC (KMX) Earnings History

CARMAX INC - Q3 FY2026 Earnings

Filed at: Dec 18, 2025, 6:59 AM EST|Read from source

EXECUTIVE SUMMARY

CarMax reported a challenging third quarter with significant declines in unit sales and gross profit, impacted by market depreciation and restructuring charges. The company is implementing changes, including leadership transitions and cost-saving initiatives, to address recent performance trends.

POSITIVE HIGHLIGHTS

  • •

    CarMax Auto Finance (CAF) income increased 9.3% to $174.7 million, driven by a gain on sale of auto loans.

    positive
  • •

    Extended Protection Plans (EPP) margin per retail unit was $570, in line with the prior year.

    neutral
  • •

    On track to achieve SG&A reductions of at least $150 million in exit rate savings by the end of fiscal 2027.

    positive

CONCERNS & RISKS

  • •

    Retail used unit sales decreased 8.0% and comparable store used unit sales declined 9.0%.

    negative
  • •

    Wholesale units decreased 6.2% and gross profit per wholesale unit decreased $116 per unit, impacted by steep market depreciation.

    negative
  • •

    Total gross profit decreased 12.9% to $590.0 million.

    negative
  • •

    Net earnings per diluted share of $0.43, a significant decrease from $0.81 a year ago, impacted by $0.08 due to restructuring charges.

    negative

FINANCIAL METRICS

Revenue
Quarterly
$5.79B
-6.9%
Prior year: $6.22B
Net Income
Quarterly
$62.22M
-50.4%
Prior year: $125.44M
EPS (Diluted)
Quarterly
$0.43
-46.9%
Prior year: $0.81
Operating Income
Quarterly
$83.89M
-49.6%
Prior year: $166.47M
EPS (Basic)
Quarterly
$0.43
-46.9%
Prior year: $0.81

MARGIN ANALYSIS

Gross Margin
Current Quarter
10.2%
Prior Year
10.9%
YoY Change
-70 bps
Operating Margin
Current Quarter
1.4%
Prior Year
2.7%
YoY Change
-130 bps
Net Margin
Current Quarter
1.1%
Prior Year
2.0%
YoY Change
-90 bps

Margin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.

MANAGEMENT GUIDANCE

Q4 FY2026

retail_used_unit_margins
"Anticipate lowering retail used unit margins in the fourth quarter to improve price competitiveness."
marketing_spend
"Expect marketing spend on a total unit basis to be up year-over-year, with a focus on investing in acquisition to drive buys and sales."

Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.

SPECIAL ITEMS & ADJUSTMENTS

Q3 FY2026
Restructuring charges primarily related to CEO change and workforce reductions in Customer Experience Center (CEC).
Impacted net earnings per diluted share.
$0.08 per share

Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.

MANAGEMENT COMMENTARY

David McCreight named Interim President and CEO, and Tom Folliard named Interim Executive Chair of the Board.

— CARMAX INC, Q3 FY2026 2026 Earnings Call

Company acknowledges the need for change based on recent results.

— CARMAX INC, Q3 FY2026 2026 Earnings Call

Commitment to positioning CarMax for success while identifying a permanent CEO.

— CARMAX INC, Q3 FY2026 2026 Earnings Call

Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.

OPERATIONAL METRICS

Caf Financed Units Pct
42.6
-1.2% YoY
Prior year: 43.1
percent
Comparable Store Used Unit Sales
-9
-9.0% YoY
percent
Retail Used Unit Sales
-8
-8.0% YoY
percent
Vehicles Bought From Consumers
-12.1
-12.1% YoY
percent
Vehicles Bought Through Dealers
-8.6
-8.6% YoY
percent
Wholesale Units
-6.2
-6.2% YoY
percent

Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.