Carmax Inc
Q4 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +7.73%.
Did KMX Beat Earnings? Q4 2026 Results
CarMax delivered a sharply better-than-expected fourth quarter of fiscal 2026, with adjusted earnings per diluted share of $0.34 beating the $0.18 consensus by 91.33%, while revenue of $5.95 billion topped estimates of $4.25 billion by 39.86%, even as total revenue fell 8.1% year over year. The headline beat, however, masked a deeply pressured quarter beneath the surface: the company posted a GAAP net loss of $120.68 million, weighed down by a $141.26 million non-cash goodwill impairment charge and $33.90 million in restructuring costs tied to CEO succession and workforce reductions. Retail used unit comps slipped 1.9% as deliberate pricing actions compressed gross profit per retail used unit by $207 to $2,115, and total gross profit fell 9.4% to $605.30 million. Ahead of the print, investor expectations had already skewed cautious, with options markets pricing in an outsized post-earnings swing. New CEO Keith Barr moved quickly to raise the company's targeted SG&A cost reduction goal to $200 million in exit-rate savings by the end of fiscal 2027, with four new store openings and roughly $400 million in capital expenditures planned for the year ahead.
- Retail used vehicle unit sales declined 0.8% and comparable store used unit sales declined 1.9%, reflecting pricing actions to drive improved sales trends
- Gross profit per retail used unit declined $207 to $2,115 from prior year's record fourth quarter
- Wholesale units increased 3.0% while gross profit per wholesale unit declined $105 to $940
- CAF income decreased 9.8% to $143.7 million due to lower auto loans outstanding and increased provision for loan losses
- Non-cash goodwill impairment charge of $141.3 million driven by decline in market capitalization and pressured financial performance
- Restructuring charges of $33.9 million for CEO change severance, workforce reductions, and Edmunds lease abandonment
- Digital capabilities supported 83% of retail unit sales with omni sales at 70%
- Adjusted SG&A expenses declined 5.4% or $33.1 million year-over-year
“We are moving with urgency to improve execution, drive efficiencies, and sharpen our customer offering.”
CarMax CEO, on the earnings call
Forward Guidance & Outlook
CarMax plans to open four new stores, two stand-alone reconditioning/auction centers, and two stand-alone auction facilities in fiscal 2027, with expected capital expenditures of approximately $400 million. The company has increased its targeted SG&A cost reductions to $200 million in exit rate savings by the end of fiscal 2027, up from the prior goal of $150 million. In fiscal 2027, the company expects to leverage SG&A per total unit when excluding the restructuring charges incurred in FY26. CAF's expansion into the credit spectrum (Tier 2/Tier 3) is expected to be highly profitable over time, though the required upfront lifetime loss provision will be a near-term headwind.
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Figures from SEC filings and company reports. Not investment advice.