CarMax (KMX) Q4 2025 earnings summary

Executive summary

• Achieved robust year-over-year EPS growth, with Q4 net earnings per diluted share up 81% to $0.58, driven by increased unit sales, higher gross profit, and cost efficiencies.

• Retail and wholesale unit volumes grew, with record vehicle buys from both consumers and dealers, totaling 269,000 vehicles in Q4, up 15.3% year-over-year.

• Digital and omni-channel sales continued to expand, supporting over 80% of total sales, with online retail sales accounting for 15% of retail units and $1.8 billion in revenue.

• Service gross profit improved significantly, with service margin loss per retail unit improving by $257 year-over-year.

• Opened the 250th store and recognized as a top workplace for the 21st consecutive year.

Financial highlights

• Q4 total sales reached $6 billion, up 7% year-over-year, with retail unit sales up 6.2% and used unit comps up 5.1%.

• Q4 net earnings were $89.9 million, up 78.8% year-over-year; diluted EPS was $0.58, up from $0.32.

• Total gross profit was $668 million, up 14% from last year, with gross profit per retail used unit at a Q4 record of $2,322.

• CAF income was $159 million, up 8% year-over-year, with net interest margin at 6.2%.

• SG&A expenses increased 5% year-over-year, but as a percent of gross profit, improved by 770 basis points to 91.4%.

Outlook and guidance

• Expect continued market share gains and double-digit EPS growth for years to come, with mid-single-digit retail unit growth.

• Service margin anticipated to grow in FY '26, with a slight positive profit contribution for the year.

• SG&A expected to become more efficient, targeting a return to the mid-70% range as a percent of gross profit over time.

• Marketing spend to remain flat per unit in FY '26; capital expenditures projected at $575 million, mainly for new stores and reconditioning centers.

• Long-term goals remain, but timeframes removed due to macroeconomic uncertainties.