Used automotive vehicle retailer Carmax (NYSE: KMX) reported Q2 CY2026 results topping the market’s revenue expectations, with sales up 6.2% year on year to $8.01 billion. Its GAAP profit of $1.31 per share was 38.8% above analysts’ consensus estimates.

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“I came to CarMax because I saw a strong foundation, an award-winning, people-first culture, and significant potential to unlock growth. Three months in, I am more convinced than ever that this is a business with everything it needs to thrive," said Keith Barr, President and Chief Executive Officer.

Company Overview

Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE: KMX) is the largest automotive retailer in the United States.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $26.35 billion in revenue over the past 12 months, CarMax is one of the larger companies in the consumer retail industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because there are only a finite number of places to build new stores, making it harder to find incremental growth. To accelerate sales, CarMax likely needs to optimize its pricing or lean into international expansion.

As you can see below, CarMax’s revenue declined by 2.1% per year over the last three years despite opening new stores and expanding its reach.

This quarter, CarMax reported year-on-year revenue growth of 6.2%, and its $8.01 billion of revenue exceeded Wall Street’s estimates by 8.2%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection indicates its newer products will spur better top-line performance, it is still below the sector average.

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Store Performance

Number of Stores

CarMax sported 255 locations in the latest quarter. Over the last two years, it has generally opened new stores, averaging 2% annual growth. This was faster than the broader consumer retail sector.

When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.

Same-Store Sales

The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales gives us insight into this topic because it measures organic growth for a retailer’s e-commerce platform and brick-and-mortar shops that have existed for at least a year.

CarMax’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. CarMax should consider improving its foot traffic and efficiency before expanding its store base.

In the latest quarter, CarMax’s same-store sales rose 3.8% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.

Key Takeaways from CarMax’s Q2 Results

It was good to see CarMax beat analysts’ revenue and EPS expectations this quarter. However, new CEO Keith Barr communicated that the company's new plan to turn the company around could take years to execute, adding to uncertainty and spooking the market. Questions remain about the CarMax's go-forward grow potential and ability to reign in costs as it faces difficult market conditions, margin pressure and declining gross profit per retail used vehicle. Shares traded down 3.6% to $50.25 immediately after reporting.

Sure, CarMax had a solid quarter, but if we look at the bigger picture, is this stock a buy? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).