Carmax 2026 Q2 Earnings Sustained Profitability Despite 28% Net Income Drop

Carmax (KMX) reported its fiscal 2026 Q2 earnings on September 24, 2025, with the company maintaining profitability for over two decades in the same quarter, despite a notable decline in key financial metrics. The report revealed a revenue contraction and a sharp drop in net income and EPS, reflecting a challenging operating environment. The company did not raise or revise its forward-looking guidance.

Carmax reported total revenue of $6.42 billion in Q2 2026, a 6.0% decline from $6.83 billion in the same period of 2025. Used vehicle sales accounted for the largest share at $5.27 billion, while wholesale vehicle sales contributed $1.15 billion. Additional revenue streams, including other sales and operating revenues, added $174.40 million, bringing the total net sales and operating revenues to $6.59 billion. The performance highlights a mix of core and secondary revenue sources amid a softer market.

The company’s earnings declined significantly, with net income falling to $95.38 million in Q2 2026 from $132.81 million a year earlier, a 28.2% decrease. Similarly, earnings per share (EPS) dropped by 24.7% to $0.64 from $0.85 in the prior year. Despite the decline, the consistent profitability over 20+ years underscores operational resilience in a volatile market.

Carmax’s stock price has shown weakness post-earnings, with a 1.04% dip during the latest trading day, a 3.52% weekly decline, and a 5.01% drop month-to-date. The market reaction reflects investor concerns over the company’s near-term challenges.

Post-earnings, CEO Bill Nash acknowledged a difficult quarter but emphasized confidence in CarMax’s long-term strategy. He highlighted the new “Wanna Drive?” brand campaign, aimed at enhancing the omnichannel experience and empowering customers. Nash also reiterated the company’s commitment to cost efficiency, targeting at least $150 million in SG&A savings over 18 months, with the majority expected by the end of fiscal 2027.

Additional News

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