CarMax's FQ2 2026 Earnings Potential: A Deep Dive into Unit Economics, Pricing Trends, and Digital Momentum

The used vehicle market remains a critical battleground for retailers like CarMax (KMX), as macroeconomic shifts, consumer behavior, and digital innovation converge to shape earnings trajectories. With CarMax set to report fiscal Q2 2026 earnings on September 25, investors are scrutinizing three key levers: unit economics, used vehicle pricing dynamics, and the acceleration of digital retailing.

Unit Economics: Margin Pressures and Cost Recovery

CarMax's unit economics face dual pressures from declining wholesale vehicle prices and rising operational costs. In Q1 2026, the average selling price of wholesale vehicles fell to $7,959 from $8,094 in the prior year, directly impacting gross profit per unit CarMax Gears Up to Report Q2 Earnings: Here's What to Expect^[2]. This decline aligns with broader industry trends, as the U.S. vehicle fleet's average age climbed to 12.8 years in 2025, softening demand in the wholesale channel CarMax Gears Up to Report Q2 Earnings: Here's What to Expect^[2]. However, the company has mitigated some of these headwinds through cost recovery initiatives. For instance, service gross margin improved by $30 million year-over-year, driven by efficiency gains and pricing adjustments CarMax Gears Up to Report Q2 Earnings: Here's What to Expect^[2].

Analysts project CarMax to report Q2 2026 earnings of $1.03 per share, a 21.2% increase from $0.85 in Q2 2025 Used Vehicle Value Index - Manheim^[3]. This growth, while impressive, must be contextualized against a 0.6% year-over-year revenue increase of $7.05 billion, suggesting that volume expansion is no longer the primary driver of profitability CarMax Gears Up to Report Q2 Earnings: Here's What to Expect^[2].

Used Vehicle Pricing Trends: A Mixed Bag

The used vehicle market in 2025 has been characterized by volatility. While the CarGurus Pricing Index reported an average used car price of $28,012 in Q1 2026, the data reveals divergent trends across segments. Luxury vehicles and EVs saw pronounced price movements, whereas SUVs and pickups experienced modest declines Used Car Price Trends - CarGurus Pricing Index^[1]. The Manheim Used Vehicle Value Index (MUVVI) further underscores this instability, noting a 2.9% year-over-year increase in wholesale prices in July 2025, despite a month-over-month dip Used Vehicle Value Index - Manheim^[3].

High consumer borrowing costs—exceeding 11% for CarMax financing in F1Q25—have compounded affordability challenges, suppressing demand for used vehicles Used Car Price Trends - CarGurus Pricing Index^[1]. Meanwhile, the lingering effects of the pandemic-era semiconductor shortage have reduced the supply of new cars, indirectly limiting the inventory of used vehicles returning to dealerships Used Vehicle Value Index - Manheim^[3]. These factors create a fragile equilibrium, where pricing gains in certain segments may be offset by broader market softness.

Digital Retailing Momentum: A Competitive Edge

CarMax's digital transformation remains a cornerstone of its strategy. In Q4 2025, digital capabilities supported over 80% of used car sales, with omnichannel sales accounting for 58% of retail units—a 3 percentage point increase from the prior year CarMax Gears Up to Report Q2 Earnings: Here's What to Expect^[2]. Online sales, where all transactional activities are completed digitally, rose to 15% of retail units, reflecting growing consumer comfort with remote purchasing.

The company's omnichannel model—encompassing tools like Instant Appraisal and virtual consultations—has proven resilient amid shifting consumer expectations. By integrating digital and physical experiences, CarMax has positioned itself to capture a larger share of the market as e-commerce adoption accelerates. This momentum is further bolstered by store expansion, with two new locations added in Q1 2026, bringing the total to 250 CarMax Gears Up to Report Q2 Earnings: Here's What to Expect^[2].

Investment Implications

While CarMax's earnings growth projections are robust, investors must weigh several risks. The decline in wholesale vehicle prices and sourcing challenges—stemming from fewer lease returns and affordability strains—could pressure margins in Q2 2026 Used Car Price Trends - CarGurus Pricing Index^[1]. Additionally, the stock's 52-week decline of 27.4% highlights broader market skepticism, despite a “Moderate Buy” rating from 18 analysts and a mean price target of $80.62 Used Vehicle Value Index - Manheim^[3].

However, the company's digital initiatives and margin recovery efforts provide a buffer. CarMax's leadership has signaled confidence in its long-term trajectory, with projections of $29.8 billion in revenue and $919.9 million in earnings by 2028 Used Car Price Trends - CarGurus Pricing Index^[1]. For investors, the key question is whether the company can sustain its digital momentum while navigating pricing headwinds—a challenge that will crystallize in its upcoming earnings report.

Historically, a simple buy-and-hold strategy around KMX earnings events has shown mixed results. Over 14 events from 2022 to 2025, the average cumulative return within a 30-day window was -2.9%, slightly underperforming the S&P 500's -1.4% benchmark. While the win rate improves to 50% by day 30, early-period returns remain largely negative, and no clear post-earnings drift pattern emerges, suggesting price action is largely mean-revertingUsed Vehicle Value Index - Manheim^[3].