CarMax (KMX) Q2 2025 earnings summary

Executive summary

• Retail used unit sales grew 5.1% year-over-year, with comparable store sales up 4.3%; wholesale units were flat or declined slightly.

• Net earnings per diluted share increased 13.3% to $0.85, and net earnings rose 11.9% to $132.8 million.

• Total gross profit rose 9.1% to $760.5 million, with strong retail and wholesale gross profit per unit and expanded EPP and service gross profit.

• Omnichannel and digital initiatives drove higher online and omni sales, enhancing customer and associate experience.

• SG&A expenses increased 4.2% but improved as a percentage of gross profit, reflecting cost management.

Financial highlights

• Total net sales and operating revenues were $7.01 billion, down 0.9% year-over-year, with used vehicle sales revenue up 1.5% and wholesale revenue down 12.7%.

• Retail gross profit per used unit was $2,269; wholesale gross profit per unit was $975—both flat year-over-year.

• Other sales and revenues (including EPP and finance income) increased 13.2%–33%, led by higher EPP margins.

• Operating cash flow for the six months was $501.4 million, compared to a $61.1 million outflow last year.

• Online retail sales accounted for 15% of used unit sales, with omni-channel sales at 57%.

Outlook and guidance

• Management expects continued positive comparable store used unit sales in Q3, slightly below Q2 levels, and ongoing improvement for the year, contingent on sales performance.

• SG&A as a percent of gross profit targeted to reach mid-70% range annually, requiring efficiency gains and gross profit growth.

• Capital expenditures for FY2025 are estimated at $500M–$550M, focused on reconditioning, auction facilities, and new stores.

• Five new store locations, one reconditioning center, and one auction facility planned for fiscal 2025.

• Long-term targets include selling over 2M combined retail and wholesale units annually and achieving $33B in annual revenue between FY2026 and FY2030.