CarMax, Inc. (NYSE:KMX) has outlined a multi-year strategy aimed at accelerating used-vehicle sales, improving operating efficiency and increasing shareholder returns. The US used-car retailer is targeting mid-single-digit annual growth in retail vehicle sales volumes and mid-teens adjusted earnings per share growth through fiscal 2030.
The company presented its new strategy, named “Shift into GEAR,” during a strategic update webcast. Using fiscal 2026 as its baseline, CarMax plans to strengthen its customer offering, improve the integration of digital and physical retail operations, increase the value generated from each transaction and reduce operating costs.
The initiative also includes changes to the company’s automotive financing operations and continued investment in its retail infrastructure.
CarMax’s new strategic framework focuses on improving business performance while building on its existing retail network, digital capabilities and vehicle financing operations.
The Shift into GEAR programme is organised around four priorities: strengthening the customer proposition, improving the digital-to-store purchasing experience, increasing value per transaction and lowering costs.
The company intends to use these initiatives to attract more customers, improve sales efficiency and support stronger profitability over the coming years.
President and Chief Executive Officer Keith Barr said the strategy is designed to maximise the benefits of CarMax’s existing operations.
“Shift into GEAR is about strengthening our core operations and getting the most from these advantages,” Barr said.
“Our plan is designed to win more customers, increase value per transaction and lower costs to support competitive pricing and drive operating leverage.”
The strategy reflects management’s focus on improving both sales growth and the profitability of individual transactions.
CarMax is targeting a mid-single-digit compound annual growth rate in used retail vehicle sales volumes through fiscal 2030.
The target uses fiscal 2026 as the starting point and represents management’s expectation for sustained expansion over the four-year period.
The company intends to achieve this growth by improving its customer offering and making the vehicle purchasing process more convenient across its digital and physical sales channels.
CarMax’s strategy also seeks to strengthen customer engagement by creating a more integrated experience between online vehicle searches and in-store transactions.
The approach is intended to help the retailer attract additional buyers while improving the efficiency of its existing sales operations.
During the fiscal year ended February 28, 2026, CarMax sold approximately 780,000 used vehicles through its retail business.
The company also sold around 540,000 vehicles through its wholesale operations, demonstrating the scale of its broader vehicle distribution activities.
Alongside its retail volume objectives, CarMax expects adjusted earnings per share to increase at a mid-teens compound annual growth rate through fiscal 2030.
The earnings target exceeds the company’s projected rate of retail unit growth, indicating that management expects profitability improvements to contribute significantly to financial performance.
Chief Financial Officer Enrique Mayor-Mora said the company’s financial framework is intended to support growth while maintaining balance sheet strength.
“Our framework targets mid-single-digit used retail unit CAGR and mid-teens adjusted EPS CAGR through fiscal 2030,” Mayor-Mora said.
The company plans to support earnings growth through a combination of higher sales volumes, increased value per transaction and lower operating expenses.
Management also intends to maintain financial flexibility while returning excess capital to shareholders.
The targets represent forward-looking objectives rather than guaranteed financial outcomes.
Improving the connection between digital shopping and physical retail locations is a central component of CarMax’s new strategy.
The company aims to make the vehicle purchasing experience more consistent as customers move between online platforms and stores.
The initiative is intended to reduce friction during the purchasing process and improve the overall customer experience.
CarMax believes a stronger digital-to-store model can help attract buyers and support higher retail transaction volumes.
The company also intends to enhance its customer offering as part of its efforts to remain competitive in the used-vehicle market.
These improvements form part of the broader plan to generate sustainable sales growth without relying exclusively on expanding the physical store network.
CarMax Auto Finance is expected to play an important role in the company’s longer-term growth strategy.
The financing business plans a disciplined expansion into Tier 2 lending, potentially broadening the range of customers eligible for its financing products.
CarMax also intends to develop more flexible funding capabilities to support its automotive lending operations.
The company originated approximately $8 billion in auto loans during fiscal 2026.
Those originations contributed to an automotive loan portfolio valued at approximately $16 billion.
The planned expansion reflects management’s intention to increase the contribution of financing services while maintaining a disciplined approach to lending.
However, the company did not provide specific financial targets for the proposed Tier 2 expansion.
CarMax plans to improve its cost structure through reductions in vehicle reconditioning and logistics expenses.
The company also intends to increase efficiency in selling, general and administrative costs.
These measures are designed to support operating leverage, allowing earnings to grow faster than sales as the business expands.
Management expects cost savings to help fund strategic investments while supporting competitive vehicle pricing.
Lower operating expenses could also contribute to the company’s objective of achieving mid-teens annual adjusted earnings per share growth.
The strategy combines cost management with efforts to increase the value generated from each customer transaction.
CarMax did not disclose a specific dollar amount for the planned cost reductions.
CarMax’s financial framework also includes maintaining a strong balance sheet and returning excess capital to shareholders.
Chief Financial Officer Enrique Mayor-Mora indicated that the company intends to balance investment requirements with shareholder distributions.
The approach is designed to provide sufficient financial resources for growth initiatives while preserving flexibility in its financing and retail operations.
CarMax did not announce a specific new share repurchase target or dividend commitment as part of the strategic update.
However, the inclusion of shareholder returns within the framework indicates that capital allocation will remain an important component of management’s longer-term financial strategy.
CarMax enters the new strategic period with an established nationwide retail network and significant automotive financing operations.
During fiscal 2026, the company sold approximately 780,000 used retail vehicles and 540,000 wholesale vehicles.
Its financing division originated $8 billion in loans, contributing to a portfolio of approximately $16 billion.
CarMax operates more than 255 store locations and employs approximately 28,000 associates.
The scale of these operations provides the foundation for the company’s plans to improve efficiency, expand customer reach and increase profitability.
Management’s strategy focuses on extracting greater value from its existing infrastructure while pursuing measured growth across retail and financing activities.
CarMax’s Shift into GEAR strategy establishes a multi-year framework for increasing vehicle sales, improving operating efficiency and strengthening adjusted earnings growth through fiscal 2030.
The company is targeting mid-single-digit annual growth in used retail unit sales and mid-teens adjusted earnings per share growth, using fiscal 2026 as its base year.
Key initiatives include enhancing the customer experience, integrating digital and physical retail channels, expanding financing capabilities and reducing reconditioning, logistics and administrative costs.
CarMax also intends to maintain a strong balance sheet and return excess capital to shareholders as it implements the strategy.
Investors will be monitoring the company’s progress towards its sales and earnings targets, particularly its ability to generate higher profitability through improved transaction economics and operating leverage.
The success of the plan will depend on execution across the company’s retail, financing and cost-efficiency initiatives over the coming years.
CarMax is a major US retailer of used vehicles, operating a nationwide network of retail locations alongside digital vehicle purchasing and financing services.
The company sells used vehicles to retail customers and operates a wholesale vehicle business. Through CarMax Auto Finance, it also provides automotive financing solutions to customers purchasing vehicles.
CarMax operates more than 255 stores and employs approximately 28,000 associates across its business.
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