CarMax (KMX) Q3 2025 earnings summary

Executive summary

• Net sales and operating revenues rose 1.2% to $6.22B for Q3 2025, with net earnings per diluted share up 55.8% to $0.81 and net earnings up 53% to $125.4M year-over-year.

• Retail used unit sales increased 5.4%, comparable store used unit sales up 4.3%, and wholesale units rose 6.3% year-over-year.

• CAF income increased 7.6% to $159.9M, supported by higher net interest margin and managed receivables.

• SG&A expenses rose 2.8% to $575.8M, but improved as a percent of gross profit, leveraging by 640 basis points.

• Omnichannel and digital tools drove higher conversion rates and operational efficiencies, supporting future growth.

Financial highlights

• Gross profit increased 10.6% to $677.6M; used vehicle gross profit up 6.8%, wholesale gross profit up 12.3%.

• Net earnings per diluted share were $0.81, up 55.8% year-over-year.

• Gross profit per retail used unit was $2,306; gross profit per wholesale unit rose to $1,015.

• Cash and cash equivalents at quarter-end were $271.9M, down from $574.1M at the start of the fiscal year.

• Net cash provided by operating activities was $478.1M for the nine months ended November 30, 2024.

Outlook and guidance

• Management expects continued growth in omni-channel and online sales, with 70% of customers using digital capabilities.

• SG&A as a percent of gross profit targeted in the mid-70% range annually, requiring low single-digit gross profit growth.

• Capital expenditures for fiscal 2025 are estimated at $500M–$550M, focused on reconditioning, auction facilities, and new stores.

• Long-term targets include selling over 2 million combined retail and wholesale units annually and achieving $33B in annual revenue between fiscal 2026 and 2030.

• Next earnings release scheduled for April 10, 2025.