CarMax stock dips despite beating earnings expectations

CarMax (KMX) shares experienced a notable downturn on Wednesday, with the stock price falling approximately 9% during a trading session where broader market indices also saw declines. This occurred despite the company announcing its first fiscal quarter 2027 results, which concluded on May 31, 2026.

CarMax's reported earnings per share of $1.31 on $8.01 billion in revenue surpassed average analyst expectations. However, the company's forward-looking guidance fell short of market targets, contributing to the stock's decline. While total sales increased by about 6.1% year-over-year and combined unit sales rose by 3.3%, earnings per share saw a 5.1% decrease from the prior year's first quarter.

Management indicated pressure on selling, general, and administrative expenses but expressed confidence in achieving approximately $200 million in category savings for the fiscal year. The company also anticipates reaching roughly $35 per unit in incremental extended protection plans (EPP) and completing its national EPP redesign rollout this quarter. Despite solid fiscal Q1 performance, investors appeared focused on the company's future outlook and guidance.