Executive Brief

  • CarMax, Inc. reported Q2 FY2026 results for the quarter ended August 31, 2025, showing declines in unit sales and earnings per share (Item 2.02, Exhibit 99.1).
  • Retail used unit sales decreased 5.4%, comparable store used unit sales decreased 6.3%, and wholesale units decreased 2.2% year-over-year (Exhibit 99.1).
  • Gross profit per retail used unit was $2,216; wholesale unit gross profit was $993; EPP margin per retail unit was $576, all consistent with prior year (Exhibit 99.1).
  • Vehicle purchases totaled 293,000, down 2.4%, with consumer purchases down 2.7% and dealer purchases up 0.2% (Exhibit 99.1).
  • SG&A expenses decreased 1.6% to $601.1 million; company plans incremental SG&A reductions of at least $150 million over 18 months (Exhibit 99.1).
  • CarMax Auto Finance income declined 11.2% to $102.6 million due to higher loan loss provisions despite net interest margin growth (Exhibit 99.1).
  • Net earnings per diluted share fell to $0.64 from $0.85 in prior year quarter (Exhibit 99.1).
  • The company repurchased $180 million in common stock, accelerating buyback pace compared to FY2025 (Exhibit 99.1).
  • Launched new brand campaign “Wanna Drive?” emphasizing omni-channel customer empowerment (Exhibit 99.1).
  • No new Items beyond 2.02 and 9.01 disclosed; information is new and not previously announced (Item 2.02, 9.01).

Item-by-Item Analysis

Item 2.02 – Results of Operations and Financial Condition

  • What happened: CarMax announced Q2 FY2026 financial results ending August 31, 2025.
  • Key facts:
    • Retail used unit sales down 5.4%, comparable store used unit sales down 6.3%, wholesale units down 2.2%.
    • Gross profit per retail used unit: $2,216; wholesale unit: $993; EPP margin per retail unit: $576.
    • Vehicles bought: 293,000 total (-2.4%), with 262,000 from consumers (-2.7%) and 31,000 from dealers (+0.2%).
    • SG&A expenses decreased 1.6% to $601.1 million; plans for $150 million incremental SG&A savings over 18 months.
    • CarMax Auto Finance income decreased 11.2% to $102.6 million due to increased loan loss provisions.
    • Net earnings per diluted share: $0.64 vs. $0.85 prior year.
    • Repurchased $180 million in common stock.
    • Digital sales supported 80% of retail unit sales; omni sales 68%, online retail 12%.
    • New brand campaign “Wanna Drive?” launched in late August 2025.
  • Source: (Item 2.02, para 1-10), (Exhibit 99.1).

Item 9.01 – Financial Statements and Exhibits

  • Exhibits furnished:
    • 99.1: Press release dated September 25, 2025, titled “CarMax Reports Second Quarter Fiscal Year 2026 Results.”
    • 104: Cover Page Interactive Data File embedded in Inline XBRL.
  • Source: (Item 9.01, para d), (Exhibit 99.1).

Exhibits Summary

  • Exhibit 99.1 is a press release providing detailed Q2 FY2026 operational and financial results, including unit sales, margins, SG&A, finance income, EPS, share repurchases, and marketing initiatives.
  • No agreements or investor decks attached.

Financial & Dilution Impact

  • Net earnings per diluted share declined from $0.85 to $0.64.
  • SG&A expenses decreased slightly by 1.6% to $601.1 million.
  • Share repurchases of $180 million indicate ongoing capital return to shareholders.
  • No new debt or equity issuance disclosed.

Timeline & Required Actions

  • Results reported for quarter ended August 31, 2025.
  • No specific future milestones or approvals disclosed.
  • Ongoing SG&A reduction plan targeting $150 million savings over next 18 months.

Risks & Monitoring

  • Risks include continued declines in unit sales and earnings.
  • Increased provision for loan losses in CarMax Auto Finance signals credit risk.
  • Monitor effectiveness of SG&A reductions and brand campaign impact on sales.
  • No explicit material adverse change (MAC) or termination triggers disclosed.

Metadata & Quality Checks

  • No OCR or parsing issues detected.
  • Non-GAAP reconciliation not referenced.
  • Forward-looking statements implied in SG&A reduction plans and brand campaign commentary.
  • No conflicts or related-party transactions disclosed.

Final Checklist

  • Items disclosed: 2.02 (Results of Operations), 9.01 (Exhibits).
  • No other Items present.
  • Press release (Exhibit 99.1) fully incorporated by reference.
  • No restatements or auditor changes.
  • No governance changes or delisting notices.

Summary

CarMax’s Q2 FY2026 results show modest declines in used vehicle sales and earnings per share, with stable unit margins and ongoing efforts to reduce SG&A expenses by $150 million over 18 months. The company continues to repurchase shares and has launched a new brand campaign to support omni-channel sales. Investors should watch for the impact of credit losses in auto finance and the effectiveness of cost-saving initiatives.

Original Filing