CarMax (NYSE:KMX) shares rose 2.6% in pre-market trading on Tuesday after the used-car retailer reported second-quarter fiscal 2027 earnings and revenue above analyst expectations.
Adjusted earnings per share were $1.16, compared with the consensus estimate of $0.73.
Revenue increased 19.5% year over year to $7.88 billion, exceeding the analyst estimate of $7.03 billion.
Net earnings per diluted share were also $1.16, up 81.3% from $0.64 in the prior-year period.
Used Vehicle Sales Increase 13.8%
CarMax sold 227,391 used retail vehicles during the quarter, an increase of 13.8% from a year earlier. Comparable-store used unit sales rose 13.0%.
Gross profit per retail used unit declined by $111 to $2,105. The company attributed the decrease to pricing actions implemented to support sales trends.
Wholesale unit sales increased 15.9% to 160,344 vehicles, while gross profit per wholesale unit decreased by $135 to $858.
“Our strong second quarter results reflect solid execution and early progress against Shift into GEAR, our four-pillar strategy to strengthen CarMax’s core business and return the company to sustained growth,” President and Chief Executive Keith Barr said.
CarMax Auto Finance Income Rises 32.1%
CarMax Auto Finance income increased 32.1% to $135.6 million, supported by a decrease in the loan loss provision to $113.4 million.
CAF financed 22% of Tier 2 volume during the quarter, compared with 10% in the prior-year period.
Extended Protection Plans margin per retail unit increased by $46 to $623.
CarMax Targets $200 Million in SG&A Savings
Selling, general and administrative expenses increased 4.6% to $628.6 million.
However, SG&A expense per total unit decreased by $157, or 8.8%, to $1,621.
CarMax said it remains on track to achieve its targeted $200 million in exit-rate SG&A savings by the end of fiscal 2027.
The company also plans to resume share repurchases at what it described as a modest level during the third quarter.
CarMax is scheduled to hold a Strategic Update on November 3.
CarMax stock price
