CarMax Stock Surges on Strong Earnings Beat and Sales Rebound

Shares of CarMax (KMX) rose more than 3% in pre-market trading after the used-vehicle retailer announced fiscal second-quarter 2027 results that significantly beat Wall Street forecasts, signaling a potential turnaround in its sales performance.

Quarterly Results Exceed Expectations

CarMax reported earnings per share (EPS) of $1.16, substantially higher than the consensus analyst estimate of approximately $0.73. The company's revenue also surpassed expectations, coming in at $7.88 billion against a forecast of around $7.03 billion. This represents a year-over-year revenue increase of nearly 19.5%.

Sales Growth and Strategic Shifts

A critical highlight for investors was the strong rebound in vehicle sales. According to the report, comparable store used unit sales climbed 13.0%, ending a streak of four consecutive quarters of year-over-year declines. Total used unit sales increased 13.8% to over 227,000 vehicles.

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The quarter also saw a strategic trade-off, with gross profit per retail used unit falling by $111 to $2,105. This move was attributed to pricing adjustments aimed at driving higher sales volume. Further boosting investor confidence, management announced plans to resume its share repurchase program in the third fiscal quarter, a move that had been previously paused.

Market Context

The stock's advance was largely company-specific, standing out against a muted broader market where the S&P 500 and Nasdaq showed only modest gains in early trading. The strong results provided a significant positive surprise to the market, where most analysts had maintained "hold" ratings on the stock amid concerns over valuation and execution risk.