CarMax KMX Q3 2026 Earnings Call Transcript
CarMax has reported a drop in sales and profits for its latest quarter. The used car retailer saw total revenue fall by 6.9% to $5.8 billion, while net earnings per share nearly halved. Despite the downturn, the company is taking steps to improve performance, including cost cuts and a leadership change.
The company’s financial results showed a decline across several areas. Used car unit sales dropped by 9%, with only 238,000 vehicles acquired—a 12% decrease from last year. Over half of these came through CarMax’s online instant appraisal tool. The average retail selling price rose slightly by $230, reaching $26,400.
Gross profit also fell by 13%, landing at $590 million. However, CarMax Auto Finance saw a 9% increase in income, totalling $175 million. Its market share in the Tier 2 lending segment also grew, exceeding 10% for the first time this quarter.
To address the downturn, CarMax is cutting margins and boosting marketing spend. The company is also pushing ahead with a $150 million reduction in selling, general, and administrative expenses by fiscal 2027, using a $2.5 billion baseline. Chief Financial Officer Enrique Mayor-Mora confirmed this target during the earnings call.
Meanwhile, the search for a new CEO is underway. The board is looking for a leader with experience in digital transformation and complex businesses. While no name has been announced, the process is reportedly advanced, with a preference for candidates with retail expertise. Interim President and CEO David McCreight is currently leading the company.
CarMax faces challenges as sales and profits decline, but it is making strategic moves to recover. The company is adjusting pricing, increasing marketing, and reducing costs while searching for a permanent CEO. The next steps will focus on stabilising performance and strengthening its market position.
