CarMax Q2 FY27 10-Q: EPS Up 81%, Buyback Resumes, Tier 2 Expansion Accelerates
KMX sits 88% above its 52-week low of $30.26.
Summary
CarMax's Q2 FY27 10-Q confirms 81% EPS growth and details the resumption of share buybacks, Tier 2 credit expansion, and a new $500M term loan.
Key Events · Earnings and Guidance · KMX
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Q2 EPS Up 81%
Diluted EPS of $1.16 for Q2 FY27, up from $0.64 a year ago, on 19.5% revenue growth to $7.88 billion. Used unit comparable store sales rose 13.0%.
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Buyback Resumes in Q3
Management will resume share repurchases in Q3 FY27 at a modest pace after pausing in Q4 FY26. $1.31 billion remains available under the $2 billion authorization.
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Tier 2 Credit Expansion
CAF is targeting ~30% of Tier 2 loan volume in FY27, up from less than 15% in FY26. This drove a $16.6 million gain on a non-prime securitization and increased the allowance for loan losses to 3.07% of loans held for investment.
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New $500M Term Loan
Entered into a $500 million term loan on June 15, 2026, maturing June 2029 at 4.94% interest. The $2 billion revolving credit facility was fully undrawn as of August 31, 2026.
Analysis · KMX · Trade & Services
CarMax's Q2 FY27 10-Q confirms the strong earnings already previewed in the September 29 8-K — diluted EPS of $1.16, up 81% year-over-year on 19.5% revenue growth — but adds the full financial picture. The company is resuming share repurchases in Q3 after pausing them, with $1.31 billion remaining under authorization. CAF is expanding aggressively into Tier 2 credit, which drove a $16.6 million gain on a non-prime securitization and a higher allowance for loan losses. Management also disclosed a ~$50 million pension settlement charge coming in the second half of fiscal 2027 and two senior leadership additions. The combination of accelerating unit sales, improving leverage, and resumed buybacks supports the positive narrative, though the Tier 2 credit expansion adds incremental risk to the loan portfolio.
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At the time of this filing, KMX was trading at $56.86 on NYSE in the Trade & Services sector, with a market capitalization of approximately $8.1B. The 52-week trading range was $30.26 to $65.28. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.