CarMax shares hit the gas as strong demand for used autos powers earnings beat

CarMax reported earnings ahead of market open on Thursday and the used vehicle retailer posted a 38% jump in profit from last year. Its shares climbed 10% in premarket trading.

The company posted earnings of $1.38 per share, beating analyst estimates of $1.16. Sales reached $7.55 billion, compared to Wall Street’s $7.5 billion outlook.

CarMax logged its biggest jump in used vehicle sales since late 2021, selling 230,000 used retail vehicles on the quarter, a 9% year-over-year increase. Its sales are still significantly ahead of rival Carvana, though the latter has been gaining ground. In its most recent earnings report, posted last month, Carvana sold just shy of 134,000 used vehicles, a 46% spike.

CarMax’s average selling price for used vehicles dipped 1.5% to $26,120. The number of vehicles the company bought on the quarter rose more than 7% to 336,000, led by a 38% surge in buying through dealers.

The used vehicle market has shown strength as new vehicles face price hikes amid tariffs and the end of tariff-based sales incentives. According to Cox Automotive, 1.53 million used vehicles were sold in the US in May, up 4% from last year.