NEW YORK--(BUSINESS WIRE)---- $KMX #BFALaw--Leading securities law firm Bleichmar Fonti & Auld LLP announces an investigation into CarMax, Inc. (NYSE: KMX) for potential violations of the federal securities laws. If you invested in CarMax, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases/carmax-inc-class-action. Why Is CarMax being Investigated? CarMax sells used cars. During the relevant period, the Company touted the strong and sustainable demand for its cars,. ...

CarMax Inc (NYSE: KMX) posted weaker-than-expected second-quarter results on Thursday.The used-car retail giant reported second-quarter earnings per share of 64 cents, missing the analyst consensus estimate of $1.09. Quarterly sales of $6.594 billion (down 6% year over year) missed the Street view of $7.024 billion.The company bought 293,000 vehicles in total in the second quarter, a 2.4% decrease. Of these, 262,000 came from consumers (down 2.7%) and 31,000 from dealers (up 0.2%)."While this was a challeng ...

CarMax Inc (NYSE: KMX) posted weaker-than-expected second-quarter results on Thursday.The used-car retail giant reported second-quarter earnings per share of 64 cents, missing the analyst consensus estimate of $1.09. Quarterly sales of $6.594 billion (down 6% year over year) missed the Street view of $7.024 billion.The company bought 293,000 vehicles in total in the second quarter, a 2.4% decrease. Of these, 262,000 came from consumers (down 2.7%) and 31,000 from dealers (up 0.2%)."While this was a challeng ...

LOS ANGELES--(BUSINESS WIRE)--Glancy Prongay & Murray LLP, a leading national shareholder rights law firm, continues its investigation on behalf of CarMax, Inc. (CarMax or the Company) (NYSE: KMX) investors concerning the Company's possible violations of the federal securities laws. IF YOU ARE AN INVESTOR WHO LOST MONEY ON CARMAX, INC. (KMX), CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS. What Happened? On April 10, 2025, CarMax released its fourth quarter and. ...

RBC Capital sets a new price target for CarMax, Inc. (NYSE:KMX) at $59, suggesting a potential increase of 29.39% from the current price.CarMax's stock experienced a significant decline following its second-quarter earnings report, with a decrease of 20.07%.The company's market capitalization stands at approximately $6.84 billion, indicating its significant presence in the market despite recent challenges.CarMax, Inc. (NYSE:KMX) is a leading used car retailer in the United States, known for its no-haggle pr ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents CarMax's unaudited consolidated financial statements and detailed notes for periods ended August 31, 2025 and 2024 [Consolidated Statements of Earnings (Unaudited)](index=3&type=section&id=Consolidated%20Statements%20of%20Earnings%20(Unaudited)) Consolidated Statements of Earnings (Unaudited) – Key Metrics | Metric | Three Months Ended Aug 31, 2025 (in thousands) | Three Months Ended Aug 31, 2024 (in thousands) | Change (%) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | | Net Sales and Operating Revenues | $6,594,684 | $7,013,529 | -6.0% | | Gross Profit | $717,666 | $760,467 | -5.6% | | CARMAX AUTO FINANCE INCOME | $102,638 | $115,580 | -11.2% | | Selling, general and administrative expenses | $601,093 | $610,562 | -1.6% | | Net Earnings | $95,378 | $132,809 | -28.2% | | Diluted Net Earnings Per Share | $0.64 | $0.85 | -24.7% | | Metric | Six Months Ended Aug 31, 2025 (in thousands) | Six Months Ended Aug 31, 2024 (in thousands) | Change (%) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | | Net Sales and Operating Revenues | $14,141,225 | $14,126,926 | 0.1% | | Gross Profit | $1,611,289 | $1,552,362 | 3.8% | | CARMAX AUTO FINANCE INCOME | $244,288 | $262,550 | -7.0% | | Selling, general and administrative expenses | $1,260,736 | $1,249,140 | 0.9% | | Net Earnings | $305,759 | $285,249 | 7.2% | | Diluted Net Earnings Per Share | $2.02 | $1.82 | 11.0% | [Consolidated Statements of Comprehensive Income (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Consolidated Statements of Comprehensive Income (Unaudited) – Key Metrics | Metric | Three Months Ended Aug 31, 2025 (in thousands) | Three Months Ended Aug 31, 2024 (in thousands) | Change (%) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | | Net Earnings | $95,378 | $132,809 | -28.2% | | Other comprehensive loss, net of taxes | $(13,060) | $(52,621) | -75.2% | | TOTAL COMPREHENSIVE INCOME | $82,318 | $80,188 | 2.6% | | Metric | Six Months Ended Aug 31, 2025 (in thousands) | Six Months Ended Aug 31, 2024 (in thousands) | Change (%) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | | Net Earnings | $305,759 | $285,249 | 7.2% | | Other comprehensive loss, net of taxes | $(24,386) | $(50,222) | -51.4% | | TOTAL COMPREHENSIVE INCOME | $281,373 | $235,027 | 19.7% | [Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) Consolidated Balance Sheets (Unaudited) – Key Metrics | Metric | As of Aug 31, 2025 (in thousands) | As of Feb 28, 2025 (in thousands) | Change (%) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Cash and cash equivalents | $540,374 | $246,960 | 118.8% | | Inventory | $3,149,570 | $3,934,622 | -20.0% | | Auto loans held for investment, net | $16,386,236 | $17,242,789 | -4.9% | | TOTAL ASSETS | $27,079,644 | $27,404,206 | -1.2% | | TOTAL LIABILITIES | $20,879,122 | $21,161,218 | -1.3% | | TOTAL SHAREHOLDERS' EQUITY | $6,200,522 | $6,242,988 | -0.7% | [Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Consolidated Statements of Cash Flows (Unaudited) – Key Metrics (Six Months Ended Aug 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (%) | | :--------------------------------- | :------------------ | :------------------ | :--------- | | NET CASH PROVIDED BY OPERATING ACTIVITIES | $1,085,037 | $501,414 | 116.4% | | NET CASH USED IN INVESTING ACTIVITIES | $(272,466) | $(215,463) | 26.5% | | NET CASH USED IN FINANCING ACTIVITIES | $(467,706) | $(283,067) | 65.9% | | Increase in cash, cash equivalents, and restricted cash | $344,865 | $2,884 | 11865.1% | | CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD | $1,305,175 | $1,253,294 | 4.1% | [Consolidated Statements of Shareholders' Equity (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Unaudited)) Consolidated Statements of Shareholders' Equity (Unaudited) – Key Metrics (Six Months Ended Aug 31) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (%) | | :--------------------------------- | :------------------ | :------------------ | :--------- | | Net earnings | $305,759 | $285,249 | 7.2% | | Other comprehensive loss | $(24,386) | $(50,222) | -51.4% | | Share-based compensation expense | $54,328 | $54,036 | 0.5% | | Repurchases of common stock | $(384,873) | $(213,305) | 80.4% | | Balance as of August 31 | $6,200,522 | $6,179,609 | 0.3% | [Notes to Consolidated Financial Statements (Unaudited)](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) [1. Background](index=13&type=section&id=1.%20Background) CarMax operates in two segments: CarMax Sales Operations and CarMax Auto Finance, emphasizing an omni-channel customer experience - CarMax operates in two reportable segments: **CarMax Sales Operations** and **CarMax Auto Finance (CAF)**[25](index=25&type=chunk) - The company offers an **omni-channel experience**, empowering customers to buy vehicles online, in-store, or through a seamless combination[27](index=27&type=chunk) - ASU 2025-05 (credit losses for accounts receivable) is effective for fiscal year beginning **March 1, 2026**, and is not expected to have a material effect[31](index=31&type=chunk)[32](index=32&type=chunk) - ASU 2025-06 (internal-use software costs) is effective for fiscal year beginning **March 1, 2028**, and its effects are currently being evaluated[33](index=33&type=chunk) [2. Revenue](index=15&type=section&id=2.%20Revenue) CarMax recognizes revenue upon transfer of control, primarily from vehicle sales, EPPs, and third-party finance fees - Revenue is recognized when control of the good or service has been transferred to the customer, generally at the time of sale or upon delivery[34](index=34&type=chunk) Disaggregation of Revenue (Three Months Ended August 31) | Revenue Type | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Used vehicle sales | $5,270.7 | $5,677.1 | -7.2% | | Wholesale vehicle sales | $1,149.6 | $1,154.5 | -0.4% | | Extended protection plan revenues | $115.1 | $121.4 | -5.2% | | Total net sales and operating revenues | $6,594.7 | $7,013.5 | -6.0% | - Profit-sharing revenues from ESPs are generally not recognized before they are paid due to variable consideration constraints[39](index=39&type=chunk) [3. CarMax Auto Finance](index=16&type=section&id=3.%20CarMax%20Auto%20Finance) CAF provides financing for CarMax retail vehicle purchases, aiming for additional profits and reduced reliance on third-party sources - CAF provides financing to qualified retail customers purchasing vehicles from CarMax to capture additional profits, cash flows, and sales while managing reliance on third-party finance sources[43](index=43&type=chunk) Components of CAF Income (Three Months Ended August 31) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Interest and fee income | $489.8 | $464.5 | 5.4% | | Interest expense | $(199.2) | $(193.7) | 2.8% | | Total interest margin | $290.6 | $270.8 | 7.3% | | Provision for loan losses | $(142.2) | $(112.6) | 26.3% | | CarMax Auto Finance income | $102.6 | $115.6 | -11.2% | Components of CAF Income (Six Months Ended August 31) | Metric | 2025 (in millions) | 2024 (in millions) | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Interest and fee income | $975.2 | $917.0 | 6.3% | | Interest expense | $(396.7) | $(376.0) | 5.5% | | Total interest margin | $578.5 | $541.0 | 6.9% | | Provision for loan losses | $(243.9) | $(193.8) | 25.8% | | CarMax Auto Finance income | $244.3 | $262.6 | -7.0% | - CAF income does not include any allocation of indirect costs[45](index=45&type=chunk) [4. Auto Loans Held for Investment](index=17&type=section&id=4.%20Auto%20Loans%20Held%20for%20Investment) Auto loans held for investment are customer loans for retail vehicle sales, net of allowance for estimated loan losses Auto Loans Held for Investment, Net (in millions) | Metric | As of Aug 31, 2025 | As of Feb 28, 2025 | Change (%) | | :--------------------------------- | :----------------- | :----------------- | :--------- | | Auto loans held for investment | $16,779.7 | $17,594.6 | -4.6% | | Less: allowance for loan losses | $(507.3) | $(458.7) | 10.6% | | Auto loans held for investment, net | $16,386.2 | $17,242.8 | -4.9% | - The allowance for loan losses as a percent of total auto loans held for investment increased by **41 basis points** during the first six months of fiscal 2026, primarily due to unfavorable loan loss performance in loans originated in **2022 and 2023**[58](index=58&type=chunk) Past Due Loans (As of August 31, 2025, in millions) | Delinquency Status | Total Auto Loans Held for Investment | % of Total | | :--------------------------------- | :--------------------------------- | :--------- | | Current | $15,835.6 | 94.37% | | 31-60 days past due | $530.2 | 3.16% | | 61-90 days past due | $338.6 | 2.02% | | Greater than 90 days past due | $75.3 | 0.45% | | Total past due | $944.1 | 5.63% | | Total auto loans held for investment | $16,779.7 | 100.00% | [5. Derivative Instruments and Hedging Activities](index=21&type=section&id=5.%20Derivative%20Instruments%20and%20Hedging%20Activities) CarMax uses derivative instruments, mainly interest rate swaps, to manage interest rate risks on debt issuances - CarMax uses derivative instruments to manage exposures related to future known receipt or payment of uncertain cash amounts, primarily impacted by interest rates[63](index=63&type=chunk) Interest Rate Swaps Designated as Cash Flow Hedges (Notional Amount) | Date | Notional Amount (in billions) | | :--------------------------------- | :---------------------------- | | As of August 31, 2025 | $4.31 | | As of February 28, 2025 | $3.76 | - An estimated **$20.3 million** will be reclassified from AOCL as an increase to CAF income during the next **12 months**[64](index=64&type=chunk) [6. Fair Value Measurements](index=21&type=section&id=6.%20Fair%20Value%20Measurements) CarMax measures assets and liabilities at fair value using a three-tier hierarchy based on input observability Items Measured at Fair Value on a Recurring Basis (As of August 31, 2025, in thousands) | Category | Level 1 | Level 2 | Total | | :--------------------------------- | :-------- | :-------- | :-------- | | Assets: Money market securities | $1,186,946 | — | $1,186,946 | | Assets: Mutual fund investments | $31,906 | — | $31,906 | | Assets: Derivative instruments designated as hedges | — | $734 | $734 | | Total assets at fair value | $1,218,852 | $734 | $1,219,586 | | Liabilities: Derivative instruments designated as hedges | — | $(11,899) | $(11,899) | Fair Value of Financial Instruments Not Carried at Fair Value (As of August 31, 2025, in thousands) | Instrument | Carrying Value | Fair Value | | :--------------------------------- | :------------- | :----------- | | Auto loans held for sale | $921,928 | $959,724 | | Senior unsecured notes | $400,000 | $395,202 | - Derivative instruments are classified as **Level 2** because their valuation models include inputs other than quoted prices in active markets, such as market-based expectations for interest rates and contractual terms[73](index=73&type=chunk) [7. Cancellation Reserves](index=24&type=section&id=7.%20Cancellation%20Reserves) A refund liability is recorded for estimated contract cancellations of Extended Protection Plan products, based on forecasted curves - A reserve, or refund liability, is recorded for estimated contract cancellations of **EPP products**, recognized on a net basis at the time of sale[80](index=80&type=chunk) Cancellation Reserves (Six Months Ended August 31, in millions) | Metric | 2025 | 2024 | Change (%) | | :--------------------------------- | :--- | :--- | :--------- | | Balance as of beginning of period | $133.9 | $128.3 | 4.4% | | Cancellations | $(39.9) | $(43.9) | -9.1% | | Provision for future cancellations | $41.9 | $49.3 | -15.0% | | Balance as of end of period | $135.9 | $133.7 | 1.6% | - The current portion of estimated cancellation reserves was **$72.3 million** as of **August 31, 2025**[81](index=81&type=chunk) [8. Income Taxes](index=24&type=section&id=8.%20Income%20Taxes) CarMax reported gross unrecognized tax benefits of $20.6 million; recent tax act changes are not expected to materially impact the effective tax rate Gross Unrecognized Tax Benefits (in millions) | Date | Amount | | :--------------------------------- | :----- | | As of August 31, 2025 | $20.6 | | As of February 28, 2025 | $18.0 | - The **One Big Beautiful Bill Act (OBBBA)**, enacted **July 4, 2025**, made **100% bonus depreciation permanent** and modified the business interest expense limitation calculation[83](index=83&type=chunk) - These changes increased deferred tax expense and decreased current tax expense, but are not expected to materially impact the **fiscal 2026 effective tax rate**[83](index=83&type=chunk) [9. Debt](index=24&type=section&id=9.%20Debt) CarMax's total debt was $18.64 billion, primarily non-recourse notes, with a $2.00 billion revolving credit facility available Total Debt (in thousands) | Date | Amount | | :--------------------------------- | :------------- | | As of August 31, 2025 | $18,643,782 | | As of February 28, 2025 | $18,707,207 | - Non-recourse notes payable totaled **$17.06 billion** as of **August 31, 2025**, primarily funding auto loans held for investment[84](index=84&type=chunk) - The **$2.00 billion unsecured revolving credit facility** had **$2.00 billion** of unused capacity fully available as of **August 31, 2025**[85](index=85&type=chunk) - CarMax was in compliance with all financial covenants and non-recourse funding vehicle performance triggers as of **August 31, 2025**[93](index=93&type=chunk) [10. Stock and Stock-Based Incentive Plans](index=26&type=section&id=10.%20Stock%20and%20Stock-Based%20Incentive%20Plans) CarMax has $1.56 billion remaining for common stock repurchases under a $2.0 billion authorization; share-based compensation decreased - As of **August 31, 2025**, **$1.56 billion** remained available for common stock repurchases under a **$2.0 billion** board authorization[94](index=94&type=chunk) Common Stock Repurchases (Three Months Ended August 31) | Metric | 2025 | 2024 | Change (%) | | :--------------------------------- | :--------- | :--------- | :--------- | | Number of shares repurchased (in thousands) | 2,921.0 | 1,376.7 | 112.2% | | Average cost per share | $61.63 | $77.04 | -20.1% | Share-Based Compensation Expense (Before Income Taxes, in thousands) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Three Months Ended August 31 | $24,813 | $35,221 | -29.5% | | Six Months Ended August 31 | $72,472 | $84,016 | -13.8% | [11. Net Earnings Per Share](index=27&type=section&id=11.%20Net%20Earnings%20Per%20Share) Basic and diluted net earnings per share are computed by dividing net earnings by weighted average common shares outstanding Net Earnings Per Share | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :--------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Basic Net Earnings Per Share | $0.64 | $0.85 | $2.03 | $1.82 | | Diluted Net Earnings Per Share | $0.64 | $0.85 | $2.02 | $1.82 | - For the three months ended **August 31, 2025**, options to purchase **8,610,659 shares** of common stock were not included in diluted EPS calculation because their inclusion would have been antidilutive[100](index=100&type=chunk) [12. Accumulated Other Comprehensive (Loss) Income](index=28&type=section&id=12.%20Accumulated%20Other%20Comprehensive%20(Loss)%20Income) This section details changes in AOCL, reflecting unrecognized actuarial losses and cash flow hedge gains/losses Accumulated Other Comprehensive (Loss) Income (in thousands) | Date | Amount | | :--------------------------------- | :------- | | Balance as of February 28, 2025 | $3,080 | | Other comprehensive loss (6 months ended Aug 31, 2025) | $(24,386) | | Balance as of August 31, 2025 | $(21,306) | Net Change in Cash Flow Hedge Unrecognized Gains, Net of Tax (Six Months Ended August 31, in thousands) | Year | Amount | | :--------------------------------- | :------- | | 2025 | $(24,538) | | 2024 | $(50,391) | [13. Leases](index=28&type=section&id=13.%20Leases) CarMax's leases include operating and finance leases for stores and equipment, with ROU assets and lease liabilities measured at present value Lease Assets and Liabilities (As of August 31, 2025, in thousands) | Metric | Amount | | :--------------------------------- | :------- | | Operating lease assets | $476,367 | | Finance lease assets | $152,483 | | Total lease assets | $628,850 | | Current portion of operating lease liabilities | $57,948 | | Operating lease liabilities, excluding current portion | $463,844 | | Total lease liabilities | $720,426 | Lease Term and Discount Rate (As of August 31, 2025) | Metric | Operating Leases | Finance Leases | | :--------------------------------- | :--------------- | :------------- | | Weighted Average Remaining Lease Term (in years) | 15.51 | 14.13 | | Weighted Average Discount Rate | 5.28% | 16.67% | Total Lease Cost (Six Months Ended August 31, in thousands) | Year | Amount | | :--------------------------------- | :------- | | 2025 | $70,593 | | 2024 | $66,490 | [14. Supplemental Cash Flow Information](index=30&type=section&id=14.%20Supplemental%20Cash%20Flow%20Information) This section provides supplemental disclosures of non-cash investing and financing activities for the six months ended August 31 Non-Cash Investing and Financing Activities (Six Months Ended August 31, in thousands) | Metric | 2025 | 2024 | | :--------------------------------- | :----- | :----- | | Increase in accrued capital expenditures | $8,228 | $816 | | Increase in financing obligations | $6,836 | — | [15. Contingent Liabilities](index=31&type=section&id=15.%20Contingent%20Liabilities) CarMax is involved in legal proceedings and provides a limited warranty; management expects no material adverse effect - CarMax received **$59.3 million** in net recoveries from Takata airbag settlements on **April 21, 2023**, and **$7.9 million** in additional residual funds on **August 9, 2023**[109](index=109&type=chunk) - The company guarantees retail used vehicles with a **90-day/4,000-mile limited warranty**[112](index=112&type=chunk) Liability for Vehicle Warranty (in millions) | Date | Amount | | :--------------------------------- | :----- | | As of August 31, 2025 | $30.3 | | As of February 28, 2025 | $28.8 | - Management believes the ultimate resolution of legal proceedings will not have a **material adverse effect** on financial condition, results of operations, or cash flows[110](index=110&type=chunk) [16. Subsequent Event](index=31&type=section&id=16.%20Subsequent%20Event) CarMax executed a non-prime securitization transaction, selling $930 million of auto loans, expecting a gain on sale and additional CAF income - On **September 24, 2025**, CarMax executed a non-prime securitization transaction, selling approximately **$930 million** of auto loans[113](index=113&type=chunk) - The transaction is expected to result in a **gain on sale** of approximately **$25 million to $30 million** (net of transaction expenses) in the **third quarter of fiscal 2026**[113](index=113&type=chunk) - CarMax expects to receive approximately **$40 million to $45 million** in additional CAF income related to servicing fees and retained beneficial interest over the life of the transaction[113](index=113&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of CarMax's financial condition and results of operations for periods ended August 31, 2025 [OVERVIEW](index=32&type=section&id=OVERVIEW) CarMax, the largest used vehicle retailer, operates CarMax Sales Operations and CAF, focusing on omni-channel experience and strategic growth - CarMax operates in two reportable segments: **CarMax Sales Operations** and **CarMax Auto Finance (CAF)**[117](index=117&type=chunk) Key Performance Indicators (Six Months Ended August 31) | Metric | 2025 | 2024 | Change (%) | | :--------------------------------- | :--------- | :--------- | :--------- | | Used unit sales | 429,939 | 422,152 | 1.8% | | Wholesale unit sales | 287,819 | 289,143 | -0.5% | | Total vehicle purchases | 629,218 | 613,866 | 2.5% | | Digitally enabled transactions | 80% | 72% | 8% pts | | Omni sales | 67% | 57% | 10% pts | | Online retail sales | 13% | 15% | -2% pts | - Strategic priorities include investing in digital capabilities, expanding CAF's full credit spectrum, pursuing new growth opportunities, and returning excess capital to shareholders, with plans to accelerate **share repurchases in fiscal 2026**[127](index=127&type=chunk) - Initiatives for fiscal 2026 include leveraging data science and AI for digital experiences, improving online vehicle transfer, expanding Skye (AI virtual assistant) functionality, launching a new brand positioning campaign, streamlining online appraisal, and expanding CAF's credit spectrum[131](index=131&type=chunk) - The company achieved **$125 per unit savings** in cost of sales in **fiscal 2025** and anticipates another **$125 per unit** in **fiscal 2026**[132](index=132&type=chunk) - CarMax aims to achieve SG&A as a percent of gross profit in the **mid-70% range annually** and expects at least **$150 million in SG&A expense reductions** over the next **18 months**[133](index=133&type=chunk)[134](index=134&type=chunk) - The earnings model is designed to deliver an earnings per share compound annual growth rate (CAGR) in the **high teens** when used unit growth is in the **mid-single digits**[136](index=136&type=chunk) [Revenues and Profitability](index=33&type=section&id=Revenues%20and%20Profitability) Net sales and operating revenues decreased in Q2 but increased for the first six months, with varied performance across vehicle sales Net Sales and Operating Revenues (in millions) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Three Months Ended August 31 | $6,594.7 | $7,013.5 | -6.0% | | Six Months Ended August 31 | $14,141.2 | $14,126.9 | 0.1% | Unit Sales | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Used vehicles (3 months) | 199,729 | 211,020 | -5.4% | | Used vehicles (6 months) | 429,939 | 422,152 | 1.8% | | Wholesale vehicles (3 months) | 138,302 | 141,458 | -2.2% | | Wholesale vehicles (6 months) | 287,819 | 289,143 | -0.5% | Average Selling Prices | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Used vehicles (3 months) | $25,993 | $26,245 | -1.0% | | Wholesale vehicles (3 months) | $7,891 | $7,768 | 1.6% | Comparable Store Used Vehicle Sales Changes (Units) | Period | 2025 | 2024 | | :--------------------------------- | :----- | :----- | | Three Months Ended August 31 | -6.3% | 4.3% | | Six Months Ended August 31 | 0.9% | 0.1% | Other Sales and Revenues (in millions) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Three Months Ended August 31 | $174.4 | $182.0 | -4.2% | | Six Months Ended August 31 | $364.8 | $361.5 | 0.9% | Used Vehicle Financing Penetration by Channel (Six Months Ended August 31) | Channel | 2025 | 2024 | | :--------------------------------- | :----- | :----- | | CAF | 42.1% | 42.6% | | Tier 2 | 17.1% | 18.2% | | Tier 3 | 7.7% | 7.1% | | Other | 30.4% | 29.7% | | Total | 100.0% | 100.0% | [GROSS PROFIT](index=38&type=section&id=GROSS%20PROFITS) Total gross profit decreased in Q2 but increased for the first six months, with used vehicle gross profit per unit intentionally lowered Total Gross Profit (in millions) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Three Months Ended August 31 | $717.7 | $760.5 | -5.6% | | Six Months Ended August 31 | $1,611.3 | $1,552.4 | 3.8% | Gross Profit Per Unit | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :--------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Used vehicle gross profit per unit | $2,216 | $2,269 | $2,318 | $2,308 | | Wholesale vehicle gross profit per unit | $993 | $975 | $1,021 | $1,020 | | Other gross profit per used unit | $690 | $682 | $746 | $671 | - Used vehicle gross profit per unit was intentionally lowered in **Q2 fiscal 2026** to drive sell-through of inventory in response to depreciation[159](index=159&type=chunk) - Other gross profit increased **13.2%** in the first six months of **fiscal 2026**, primarily driven by increases in service department margins and EPP revenues[163](index=163&type=chunk) - Expect used vehicle gross profit per unit for **Q3 fiscal 2026** to be consistent with historical average but down from the prior year's record high[159](index=159&type=chunk) - Expect wholesale vehicle gross profit per unit for **Q3 fiscal 2026** to be consistent with historical average but down from the prior year's historically strong performance[161](index=161&type=chunk) [SG&A Expenses](index=40&type=section&id=SG%26A%20Expenses) SG&A expenses decreased in Q2 due to lower share-based compensation but increased for the six-month period due to higher compensation Total SG&A Expenses (in millions) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Three Months Ended August 31 | $601.1 | $610.6 | -1.6% | | Six Months Ended August 31 | $1,260.7 | $1,249.1 | 0.9% | SG&A as a % of Gross Profit | Period | 2025 | 2024 | Change (bps) | | :--------------------------------- | :----- | :----- | :----------- | | Three Months Ended August 31 | 83.8% | 80.3% | 350 | | Six Months Ended August 31 | 78.2% | 80.5% | -230 | - The decrease in SG&A expenses in **Q2 fiscal 2026** was primarily driven by a **$9.7 million decrease** in share-based compensation expense, related to cash-settled restricted stock units and the company's stock price change[167](index=167&type=chunk) - An increase in marketing spend on a per total unit basis is expected for the remainder of **fiscal 2026**, particularly in **Q3**, to support the new brand positioning launch[170](index=170&type=chunk) [Interest Expense](index=42&type=section&id=Interest%20Expense) Interest expense for Q2 and the first six months remained consistent, excluding interest on non-recourse notes payable Interest Expense (in millions) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :----- | :----- | :--------- | | Three Months Ended August 31 | $28.5 | $27.0 | 5.6% | | Six Months Ended August 31 | $55.5 | $58.4 | -5.0% | [Other Income](index=42&type=section&id=Other%20Income) Other income for Q2 and the first six months remained relatively consistent with prior year periods Other Income (in millions) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :----- | :----- | :--------- | | Three Months Ended August 31 | $3.6 | $3.3 | 9.1% | | Six Months Ended August 31 | $3.9 | $2.9 | 34.5% | [Income Taxes](index=42&type=section&id=Income%20Taxes) The effective income tax rate for Q2 and the first six months was slightly lower than the prior year periods Effective Income Tax Rate | Period | 2025 | 2024 | | :--------------------------------- | :----- | :----- | | Three Months Ended August 31 | 25.0% | 25.3% | | Six Months Ended August 31 | 25.5% | 25.8% | [RESULTS OF OPERATIONS – CARMAX AUTO FINANCE](index=42&type=section&id=RESULTS%20OF%20OPERATIONS%20%E2%80%93%20CARMAX%20AUTO%20FINANCE) CAF income decreased due to increased provision for loan losses, partially offset by higher interest margin; CAF penetration is expanding CarMax Auto Finance Income (in millions) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Three Months Ended August 31 | $102.6 | $115.6 | -11.2% | | Six Months Ended August 31 | $244.3 | $262.6 | -7.0% | Total Interest Margin as a Percent of Average Auto Loans Outstanding | Period | 2025 | 2024 | | :--------------------------------- | :----- | :----- | | Three Months Ended August 31 | 6.6% | 6.1% | | Six Months Ended August 31 | 6.5% | 6.1% | Provision for Loan Losses (in millions) | Period | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Three Months Ended August 31 | $142.2 | $112.6 | 26.3% | | Six Months Ended August 31 | $243.9 | $193.8 | 25.8% | - The allowance for loan losses as a percentage of auto loans held for investment was **3.02%** as of **August 31, 2025**, compared with **2.82%** as of **August 31, 2024**[188](index=188&type=chunk) CAF Origination Information (Six Months Ended August 31) | Metric | 2025 | 2024 | Change (%) | | :--------------------------------- | :------- | :------- | :--------- | | Net auto loans originated (in millions) | $4,358.0 | $4,425.5 | -1.5% | | Vehicle units financed | 181,195 | 179,924 | 0.7% | | Net penetration rate | 42.1% | 42.6% | -0.5% pts | | Weighted average contract rate | 11.3% | 11.4% | -0.1% pts | | Weighted average loan-to-value (LTV) | 89.6% | 89.3% | 0.3% pts | | Weighted average term (in months) | 68.5 | 66.9 | 1.6 months | | Weighted average credit score | 723 | 723 | 0 | - CarMax expects CAF income to be **down slightly year-over-year** for **fiscal 2026**[184](index=184&type=chunk) - The company aims to increase CAF penetration to **50%**, with each additional percentage point generating **$10 million to $12 million** in lifetime pre-tax income per year of origination[179](index=179&type=chunk) [PLANNED FUTURE ACTIVITIES](index=46&type=section&id=PLANNED%20FUTURE%20ACTIVITIES) CarMax plans to open three stores and one reconditioning/auction center, with $575 million in capital expenditures for fiscal 2026 - CarMax anticipates opening **three additional store locations** and **one additional stand-alone reconditioning/auction center** for the remainder of **fiscal 2026**[185](index=185&type=chunk) - Estimated capital expenditures will total approximately **$575 million** in **fiscal 2026**, largely for future long-term growth in offsite reconditioning and auction facilities, as well as new stores[185](index=185&type=chunk) [FINANCIAL CONDITION](index=46&type=section&id=FINANCIAL%20CONDITION) CarMax's liquidity is supported by operations, funding vehicles, and credit facility, with increased operating cash flow and strong compliance - Net cash provided by operating activities totaled **$1.09 billion** in the first six months of **fiscal 2026**, compared with **$501.4 million** in the prior year period, an increase of **116.4%**[190](index=190&type=chunk) - Total inventory decreased by **$785.1 million** as of **August 31, 2025**, compared to the start of the fiscal year, due to a strategic reduction in response to lower consumer demand[191](index=191&type=chunk) Cash Flow Activities (Six Months Ended August 31, in millions) | Activity | 2025 | 2024 | | :--------------------------------- | :------- | :------- | | Net cash used in investing activities | $(272.5) | $(215.5) | | Capital expenditures | $(268.2) | $(213.1) | | Net cash used in financing activities | $(467.7) | $(283.1) | | Stock repurchases | $(384.9) | $(213.3) | Total Debt and Cash and Cash Equivalents (in thousands) | Metric | As of August 31, 2025 | As of February 28, 2025 | | :--------------------------------- | :-------------------- | :-------------------- | | Total debt | $18,643,782 | $18,707,207 | | Cash and cash equivalents | $540,374 | $246,960 | - As of **August 31, 2025**, CarMax was in compliance with all financial covenants in its credit facility, term loan, and senior note agreements[198](index=198&type=chunk) [FORWARD-LOOKING STATEMENTS](index=49&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section contains cautionary forward-looking statements about CarMax's future plans, highlighting various risks and uncertainties - Statements about future business plans, operations, challenges, opportunities, or prospects are **forward-looking statements**[206](index=206&type=chunk) - Key risk factors include changes in the competitive landscape, general or regional U.S. economic conditions (**inflation, interest rates**), availability or cost of capital, damage to reputation, significant changes in vehicle prices, and greater credit losses for CAF's auto loan portfolio[206](index=206&type=chunk) - The company disclaims any intent or obligation to update these forward-looking statements after the date they are made[206](index=206&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to CarMax's market risk exposure since February 28, 2025, as referenced in the Annual Report on Form 10-K - There have been **no material changes** to CarMax's market risk since **February 28, 2025**[207](index=207&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) CarMax's disclosure controls and procedures were effective as of August 31, 2025, with no material changes in internal control - CarMax's disclosure controls and procedures were **effective** as of **August 31, 2025**[208](index=208&type=chunk) - There was **no material change** in internal control over financial reporting during the quarter ended **August 31, 2025**[209](index=209&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) Refer to Note 15 of the consolidated financial statements for a discussion of CarMax's legal proceedings - For a discussion of certain legal proceedings, refer to **Note 15** to the consolidated financial statements[212](index=212&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors discussed in CarMax's Form 10-K for fiscal year ended February 28, 2025 - There have been **no material changes** to the risk factors discussed in the Form 10-K for fiscal year ended **February 28, 2025**[213](index=213&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) CarMax's common stock repurchase program had $1.56 billion remaining under a $2.0 billion authorization as of August 31, 2025 - As of **August 31, 2025**, **$1.56 billion** remained available for repurchase under a **$2.0 billion** board authorization for common stock repurchases[214](index=214&type=chunk)[216](index=216&type=chunk) Common Stock Repurchase Activity (Second Quarter of Fiscal 2026) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--------------------------------- | :----------------------------- | :--------------------------- | | June 1 - 30, 2025 | 662,641 | $66.48 | | July 1 - 31, 2025 | 1,007,413 | $63.45 | | August 1 - 31, 2025 | 1,250,905 | $57.60 | | Total | 2,920,959 | $61.63 | [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and XBRL documents - Exhibits include certifications of the Chief Executive Officer and Chief Financial Officer (**31.1, 31.2, 32.1, 32.2**)[218](index=218&type=chunk) - Various **XBRL Taxonomy Extension Documents** (Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase) are included[218](index=218&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) The report is duly signed by CarMax's President and CEO and Executive VP and CFO on September 26, 2025 - The report was signed by **William D. Nash**, President and Chief Executive Officer, and **Enrique N. Mayor-Mora**, Executive Vice President and Chief Financial Officer[221](index=221&type=chunk) - The signing date was **September 26, 2025**[221](index=221&type=chunk)

Key Takeaways CarMax benefits from its nationwide footprint, reconditioning centers, and logistics network.Acquisition of Edmunds and EV battery insights via Recurrent boost digital and EV market position.CarMax faces tariff risks, a stretched balance sheet, and stiff competition from online rivals.CarMax, Inc. (KMX) , the largest retailer of used vehicles in the United States, is set to gain from its extensive footprint, strategic buyout and investor-friendly moves. However, reciprocal tariffs and a stretc ...

CarMax TodayKMXCarMax$45.03 -0.57 (-1.25%) 52-Week Range$42.75▼$91.25P/E Ratio12.40Price Target$69.67Add to WatchlistCarmax's NYSE: KMX share price fell 25% following the Q2 earnings release, hitting rock bottom in the process. Rock bottom aligns with the COVID-19-induced lows of 2020, a launchpad for share prices five years ago and one that will pay off again in the not-too-distant future.  The question is how long the stock price slump will last, and it could last for a few more quarters. The company rep ...

Key TakeawaysChina's central bank is signaling a dual focus on improving monetary policy while also tightening control over money regulation, indicating potential shifts in its financial oversight.RBC's CEO McKay announced plans to significantly expand the bank's wealth adviser team by acquiring U.S. companies, signaling strategic growth in the North American market.The European Union and Vietnam are advancing their Free Trade Agreement (FTA), establishing a task force to review issues and anticipating more ...

We recently published 10 Big Names Investors Are Dumping. CarMax, Inc. (NYSE:KMX) is one of the companies that heavily bled in Thursday’s trading. Shares of CarMax fell to an all-time low on Thursday, as investors disposed of positions after disappointing second-quarter earnings results. During the session, the company fell to its lowest 52-week price of $42.75 before slight buying trimmed its losses to end the day just down by 20.07 percent at $45.60 apiece. CarMax (KMX) Falls to All-Time Low as Q2 Ear ...