CarMax Sets Sights on Continued Growth with Record-Breaking Q1 2026 Performance
CarMax, the nation's largest used car retailer, has kicked off the new fiscal year on a high note, reporting record-breaking performance in its first quarter of 2026. According to the company's latest conference call transcript, CarMax delivered strong results across various fronts, highlighting its commitment to providing an unparalleled customer experience and driving growth through operational efficiency.
The company's President and CEO, Bill Nash, emphasized that the quarterly results demonstrate the strength of CarMax's earnings growth model, which is underpinned by its best-in-class omnichannel experience, diversity of business, and sharp focus on execution. "We are focused on growing sales and gaining market share, expanding gross profit, managing CAPs, credit spectrum expansion, leveraging SG&A and buying back shares," Nash explained.
CarMax's retail business saw significant growth in the first quarter, with total unit sales increasing by 9% year-over-year. The company also reported an 8.1% increase in used unit comps, driven by strong demand and operating efficiencies across its logistics network and reconditioning operations. Notably, CarMax achieved an all-time record for retail gross profit per used unit, with the average selling price reaching $26,100.
In addition to its retail success, CarMax also saw growth in its wholesale business, with unit sales increasing by 1.2% compared to the same period last year. The company purchased a record-breaking number of vehicles during the quarter, buying approximately 336,000 units – a 7% increase from the previous year.
CarMax's digital capabilities played a crucial role in driving sales, with 80% of retail unit sales coming through an omnichannel experience and 14% via online transactions. According to Cox Automotive Research, as well as CarMax's own data, the majority of customers shopping for used cars intend to transact via an omni experience – underscoring the company's position as a leader in providing seamless and personalized experiences.
The company's ability to source vehicles from both consumers and dealers was also highlighted during the quarter. CarMax bought approximately 288,000 units from consumers, with more than half of those purchases coming through its online instant appraisal experience. The remaining vehicles were sourced through dealers, which is up 38% from last year.
CarMax Auto Finance (CAF) also saw growth in the first quarter, with net interest margin expanding and continued advances made in full credit spectrum underwriting and funding model. Furthermore, the company materially leveraged its selling, general, and administrative (SG&A) expenses as a percent of gross profit.
The strong performance was reflected in CarMax's financial results, with total sales reaching $7.5 billion – a 6% increase compared to last year. The company also delivered robust retail and wholesale earnings per share (EPS), achieving a 42% EPS growth rate – its fourth consecutive quarter of positive retail unit comps and double-digit year-over-year earnings per share growth.
As CarMax continues to drive growth through operational efficiency, the company remains committed to its mission of providing an unparalleled customer experience. By leveraging its omnichannel capabilities, expanding its business diversification, and focusing on execution, CarMax is poised for continued success in the coming quarters.
