CarMax, Inc. (NYSE: KMX) reported first-quarter fiscal 2027 results on June 17, 2026, posting net revenues of $8.0 billion, a 6.2% increase from the prior year's first quarter, while diluted earnings per share fell 5.1% to $1.31 from $1.38 a year ago.
The Richmond, Virginia-based company operates more than 255 used vehicle retail locations across the United States and runs CarMax Auto Finance, an in-house lending arm with a loan portfolio of approximately $16 billion. The results come three months into the tenure of new President and Chief Executive Officer Keith Barr.
#New CEO Sets Out Four-Pillar Strategy for Fiscal 2027
Alongside the quarterly results, CarMax announced a strategic framework built around four areas: pricing and inventory access, digital and in-store integration, profitability across financing and protection plans, and cost reduction. The company said it plans to host a Strategic Update in late fall to provide additional detail on specific initiatives and milestones.
Barr said in the earnings release: "We are entering this fiscal year with a clear strategy that is driving early results. We have identified four strategic pillars that will meaningfully improve how we operate at scale and support strong performance. Our goal is clear: deliver strong unit sales and earnings growth that enables us to consistently reward our shareholders."
CarMax said it is on track to achieve targeted SG&A reductions of $200 million in exit-rate savings by the end of fiscal year 2027. SG&A expenses fell 3.7%, or $24.5 million, to $635.2 million in the quarter, driven by lower compensation and benefits costs, though advertising expense rose 11.8%. SG&A per total unit improved by $118, or 6.8%, to $1,619.
#Wholesale Volume Gains Offset Retail Margin Pressure
Combined retail and wholesale unit sales reached 392,357, up 3.3% from the prior year's first quarter. Wholesale vehicle unit sales increased 8.4% to 162,064, with total wholesale revenues rising 14.0% on higher unit volume and an average wholesale selling price increase of approximately $400 per unit.
Retail used vehicle unit sales were 230,293, essentially flat versus the prior year. Comparable store used unit sales declined 0.8%. Total retail used vehicle revenues rose 4.7%, driven by an average retail selling price increase of approximately $1,200 per unit, or 4.5%.
Gross profit per retail used unit was $2,177, down $230 from last year's all-time record, which CarMax attributed to the continuation of pricing actions implemented to drive improved sales volume. Total gross profit was $854.4 million, a decrease of 4.4% from the prior year's first quarter.
#CarMax Auto Finance Penetration Expands as Income Dips
CarMax Auto Finance financed 43.3% of units sold in the quarter, up 150 basis points from 41.8% in the prior year's first quarter. CAF income was $140.2 million, down 1.0% from the prior year's first quarter. The company said the decline reflected lower average auto loans outstanding following a $900 million non-prime securitization in the third quarter of last year, in which most of the related residual financial interest was sold.
The allowance for loan losses stood at $475.0 million, or 2.95% of auto loans held for investment, as of May 31, 2026, up from 2.78% as of February 28, 2026. CAF's total interest margin was 6.7% of average auto loans outstanding, up 20 basis points from the prior year's first quarter.
Digital capabilities supported 84% of retail unit sales in the quarter, with omni-channel sales accounting for 70% and fully online retail sales representing 14%.
CarMax did not repurchase any shares in the first quarter. As of May 31, 2026, $1.31 billion remained available under the company's outstanding buyback authorization. CarMax said it intends to resume share repurchases in the future, subject to market conditions, leverage levels, and capital requirements.
Management projected continued execution of the four-pillar strategy through fiscal 2027, though the company cautioned that actual results could differ materially from forward-looking statements due to risks including changes in used vehicle pricing, tariff and trade policy uncertainty, consumer credit availability, competitive conditions, macroeconomic pressures, and the ability to execute on the new strategic framework under a recently transitioned leadership team.