CarMax, Inc. (NYSE: KMX), headquartered in Richmond, Virginia, is the largest retailer of used autos in the United States, focusing on a customer-centric approach in buying and selling vehicles both in-store and online. The company reported strong growth in its financial performance for the first quarter of fiscal 2026.

CarMax is experiencing a period of growth, as evidenced by a 42.3% increase in net earnings per diluted share to $1.38, up from $0.97 in the same quarter last year. The company’s total sales reached $7.55 billion, marking a 6.1% increase year-over-year, driven by higher retail and wholesale unit volumes. Retail used unit sales rose by 9.0%, while comparable store used unit sales increased by 8.1%.

During the quarter, total gross profit saw a significant increase of 12.8% to $893.6 million, supported by higher volumes and improved unit margins. Retail gross profit per used unit achieved a record high of $2,407, reflecting an increase of $60 from the previous year. The gross profit per wholesale unit was historically strong at $1,047, despite a slight decrease of $17 per unit from the previous year’s first quarter.

Selling, general, and administrative (SG&A) expenses increased by 3.3%, totaling $659.6 million. However, the company managed to leverage SG&A as a percentage of gross profit efficiently, improving by 680 basis points to 73.8% due to the growth in gross profit and ongoing cost management strategies.

CarMax Auto Finance (CAF) reported a slight decrease of 3.6% in income, totaling $141.7 million, as increased provisions for loan losses offset growth in net interest margins. The provision for loan losses increased to $101.7 million, up from $81.2 million in the prior year. CAF’s total interest margin percentage improved by 30 basis points to 6.5%.

The company bought approximately 336,000 vehicles during the quarter, which is a 7.2% increase compared to the previous year. This comprised 288,000 vehicles purchased from consumers, reflecting a 3.3% increase, and 48,000 vehicles sourced through dealers, which rose by 38.4%.

In terms of capital allocation, CarMax significantly accelerated its share buyback program, repurchasing approximately 3 million shares for a total of $200 million during the quarter. As of the end of the period, CarMax had approximately $1.74 billion available under its share repurchase authorization.

CarMax intends to continue enhancing its offerings while also expanding its non-prime lending program through off-balance-sheet strategies to mitigate risk and support growth in its automotive finance business. The strong financial results and strategic initiatives indicate a robust quarter for CarMax, positioning the company well for continued growth in the future.