CarMax (KMX) investor relations material

Market opportunity and position

• U.S. used-car market valued at $1T, with 39M annual sales and a highly fragmented landscape; top 10 retailers hold ~10% share, while current share is 4% of the age 0–10 market.

• Scaled platform includes 1.3M retail and wholesale cars sold and 258 stores; store network reaches 85% of the U.S. population, with digital capabilities supporting 83% of retail sales and 86% aided brand awareness.

• More than 60% of customers plan to combine online and in-person steps, and 90%+ complete part of the purchase in-store.

• Q2 comp sales grew 13% against a broadly flat market; management cited correctly positioned pricing as a driver of share gains.

GEAR strategy and customer experience

• GEAR priorities—Great Offering, Easy Experience, Add Value and Run Lean—aim to win customers, increase value per transaction, lower costs and support sustained share and earnings growth.

• Great Offering focuses on competitive, locally responsive pricing, greater saleable selection, faster transfers and inventory aligned with customer demand; saleable inventory is materially higher YoY.

• Digital shopping, reservations and store handoffs are being simplified; reserved cars should be ready on arrival, and AI agents support customers and associates, with early tests showing improved conversion and efficiency.

• Instant online offer eligibility target exceeds 95%, with changes planned for testing from December; faster-delivery pilots will scale based on results and economics.

• Reconditioning and logistics initiatives target savings of hundreds of dollars per car by FY2030, with savings reinvested in pricing; reconditioning pilots are planned for next year and logistics rollout over coming years.

CAF and protection products

• CAF is staging Tier 2 expansion from 10% of Tier 2 volume in Q2 FY2026 to 40% by FY2030; total CAF penetration goal is 50%, while Tier 3 is not a near-term priority.

• Tier 2 growth may generate >$100M of annual lifetime pre-tax income at ~8 points of total sales by FY2030, but upfront loss provisioning pressures near-term income; CAF income is expected slightly down in FY2027, flat YoY in FY2028, then growing at a high-single-digit pace through FY2030.

• Funding diversification includes $600M of receivables sold in Q2 FY2027; staged expansion and funding choices are intended to balance credit risk and lifetime value.

• Refreshed MaxCare offers shorter-term, lower-cost plans and additional options; targets include >20% EPP profit-per-retail-unit growth and low-double-digit EPP margin dollar CAGR through FY2030.