CarMax (KMX) Q3 2026 earnings summary

Executive summary

• Leadership transition underway with David McCreight as Interim President & CEO and Tom Folliard as Interim Executive Chair, following the CEO's departure in December 2025; search for a permanent CEO is ongoing.

• Leadership aims to drive operational improvement, digital transformation, and omni-channel experience, with immediate focus on narrowing price gaps, enhancing digital sales, and reducing SG&A.

• Recent results deemed unacceptable, prompting urgent actions to improve sales, cost structure, and customer experience.

• Near-term priorities include lowering used unit margins, increasing marketing, and leveraging omnichannel assets.

• Digital capabilities supported 81% of retail sales, with omni-channel experience driving customer engagement.

Financial highlights

• Q3 FY26 net sales and operating revenues were $5.79 billion, down 6.9% year-over-year; net earnings were $62.2 million, a 50.4% decrease year-over-year.

• Net earnings per diluted share were $0.43, down from $0.81 last year, including $0.08 in restructuring expenses.

• Total gross profit was $590 million, down 12.9% year-over-year; used retail margin decreased 11%.

• Retail used unit sales declined 8%, used unit comps down 9%, and wholesale unit sales fell 6.2% year-over-year.

• CarMax Auto Finance income rose 9.3% to $174.7 million, including a $27 million gain on sale from a non-prime securitization.

Outlook and guidance

• Margin reductions and increased marketing spend are expected to improve sales trends but may pressure near-term earnings.

• SG&A savings of at least $150 million targeted by end of FY27, with a baseline of $2.5 billion and a 30% CEC workforce reduction already implemented.

• Capital expenditures for FY26 estimated at $575 million, focused on reconditioning, auction facilities, and new stores.