CarMax Traded as High as $63.67 and Closed at $59.23, Up 4.74%, After Earnings Per Share Rose 81% to $1.16 and It Said Buybacks Resume Next Quarter

by Ellis Vance · September 30, 2026

Small-Cap Markets Correspondent, The SmallCap Signal

CarMax shares closed at $59.23 on Tuesday, Sept. 29, up 4.74% from Monday's $56.55 close, after the used-car retailer reported fiscal second-quarter earnings of $1.16 a diluted share, up 81.3% from $0.64 a year earlier, according to the company's results release dated Sept. 29 and the daily historical-price table for the stock. The same table shows the shares opened at $60.41, traded as high as $63.67 and as low as $58.03, on volume of 12,177,424 shares, roughly double Monday's 6,356,237.

The gap between the high and the close is the tape's own verdict on the print. At $63.67 the stock was 12.6% above Monday's close, and it finished the day holding just over a third of that peak gain; both of those figures are our arithmetic from the open-high-low-close row. In an entry stamped 8:04 a.m. EDT, before the regular session opened, TheStreet's live market blog said the shares had "jumped 4%" after the results.

The quarter itself was strong on volume and thinner on unit economics. Total net revenues rose 19.5% to $7,877.9 million from $6,594.7 million, the release says. Combined retail and wholesale unit sales were 387,735, up 14.7%. Retail used units rose 13.8% to 227,391, comparable-store used units rose 13.0%, and the average retail selling price rose approximately $1,600 a unit, or 6.3%. Wholesale units rose 15.9% to 160,344.

Gross profit per retail used unit, the number CarMax investors have watched through every cycle, was $2,105, a decline of $111 that the company attributes to "the continuation of pricing actions implemented to support an improved sales trend." Wholesale gross profit per unit fell $135 to $858. Total gross profit still rose 11.4% to $799.5 million because volume more than covered the per-unit give-back, and "other" gross profit, which includes extended protection plans and service, rose 33.1% to $183.3 million, with EPP margin per retail unit up $46 to $623.

Net earnings were $165.3 million against $95.4 million a year earlier, and the diluted share count fell 4.8% to 142.5 million, which is part of the reason per-share earnings grew faster than net income. For the six months to Aug. 31, revenue was $15,891.4 million, up 12.4%, and diluted EPS was $2.47 against $2.02.

Two lines below gross profit did the heavy lifting. Selling, general and administrative expenses rose only 4.6% to $628.6 million, which on a per-unit basis was $1,621, an improvement of $157, or 8.8%; the company says it remains on track for $200 million of exit-rate SG&A savings by the end of fiscal 2027. CarMax Auto Finance income rose 32.1% to $135.6 million, driven by a $28.8 million decrease in the loan-loss provision to $113.4 million, a $16.6 million gain on sale of auto loans and $6.1 million more in servicing fees, the release says. Other income was $18.6 million against $3.6 million, mainly unrealized gains on equity investments.

The financing arm is also taking on more risk by design. CAF financed 22% of so-called Tier 2 volume in the quarter versus 10% a year ago, and the company says it "was the largest lender in this space." The allowance for loan losses was $497.3 million, or 3.07% of auto loans held for investment, up from 2.95% at May 31, and CAF's weighted average contract rate was 11.8%, up 60 basis points from a year earlier. The company says older-vintage performance "has been in line with expectations" this year, after it added provisions for those vintages in the prior-year quarter.

The capital-return line is the most obvious candidate for what moved the stock at the open. CarMax repurchased no shares in the quarter but said that "given our second quarter performance, continued momentum, and improving leverage, we intend to resume share repurchases at a modest level in the third quarter of this fiscal year." It had $1.31 billion of authorization remaining at Aug. 31. The release describes the amount and timing as discretionary and dependent on market conditions, leverage and capital needs.

Chief executive Keith Barr, who introduced a four-pillar plan called Shift into GEAR last quarter, tied the results to it. "We delivered 81% EPS growth as we strengthened our price competitiveness, increased Extended Protection Plan margins, expanded CAF's share of Tier 2 originations, continued to enhance our digital experience, and drove material SG&A leverage," he said in the release. CarMax will hold a virtual strategic update on Nov. 3 at 8:00 a.m. ET to lay out targets and milestones.

CarMax, based in Richmond, Va., sells used vehicles through stores and online and finances a large share of them through its captive lender, CarMax Auto Finance; digital channels supported 81% of retail unit sales in the quarter, with 13% of sales completed fully online, the release says. It bought 310,107 vehicles from consumers and dealers, up 5.9%, with consumer purchases flat and dealer purchases up 53.7%. During the quarter it opened an auction center and store in Conroe, Texas, and a store in Richland, Wash., and it opened a store in Austin after quarter-end.

The release contains no numerical guidance for the third quarter or the year, and the Nov. 3 event is where the company says it will provide details on strategy, initiatives and milestones. Nor does the release say how large "modest" repurchases will be, or whether the pricing actions that trimmed retail gross profit per unit will continue at the same intensity.

What is documented is a stock that opened sharply higher on a large earnings beat and then sold down through the session to close well off its high. The same price-history page, read while Wednesday's session was open, showed the shares lower again on Sept. 30; that is an intraday reading, not a close, and there is no Wednesday close yet. The next hard data points are the Form 10-Q for the quarter, which CarMax filed on Sept. 30, the first repurchase disclosures in the fiscal third quarter, and the Nov. 3 strategic update.