What Happened?
Shares of used automotive vehicle retailer Carmax (NYSE: KMX) jumped 6.4% in the pre-market session after the company reported third-quarter 2026 earnings and announced plans to resume share repurchases in the fourth quarter of 2026.
Third-quarter 2026 net revenues increased 19.5% to $7.9 billion, according to the company's press release. Same store sales grew 18.9% year on year. Diluted EPS increased 81.3% to $1.16 from $0.64 a year ago, beating analysts’ estimates by 59.7%. Gross profit per retail used unit fell by $111 to $2,105 to support sales volume via competitive pricing under CEO Keith Barr's growth strategy. Strong unit volume allowed CarMax to leverage expenses, with SG&A per total unit, the overhead cost spread across each vehicle, improving 8.8% to $1,621, while CarMax Auto Finance income rose 32.1% to $135.6 million on lower loan loss provisions, the company said. Looking ahead, CarMax said it plans to resume share repurchases in the fourth quarter of 2026. The company also named Elizabeth Dirgins Executive Vice President, Chief Digital and Customer Officer, and promoted Jeff Campbell to Senior Vice President, Strategy, heading a centralized function combining strategy, data science, AI, and pricing teams.
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What Is The Market Telling Us
CarMax’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 8.8% on the news that its second-quarter results revealed declining year-over-year profitability, overshadowing beats on revenue and earnings per share (EPS).
CarMax is up 57.4% since the beginning of the year, and at $61.83 per share, it is trading close to its 52-week high of $64.22 from August 2026. Despite the year-to-date gain, investors who bought $1,000 worth of CarMax’s shares 5 years ago would now be looking at only $422.17.
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