KMX

CarMax is the nation's largest used-vehicle retailer, operating an omni-channel sales model alongside its captive CarMax Auto Finance (CAF) arm. FY2026 was a tough year for the core business: net sales fell 1.8% to $25.9B, used unit sales declined 1.1% (comparable-store units down 2.0%), and per-unit profitability slipped (used gross profit $2,253 per unit, -2.5%; wholesale $974 per unit, -4.9%). SG&A deleveraged to 87.4% of gross profit, and GAAP net earnings halved to $247.3M ($1.68 diluted EPS, -47.7%).

Crucially, the GAAP collapse overstates the operating decline. Adjusted EPS fell only 11.0% to $2.91 — a large gap that signals significant non-recurring/charge items (CAF loan-loss provisioning and other adjustments) depressed GAAP results. CAF income was relatively resilient at $562.7M (-3.3%), financing 42.4% of retail units on a $16.37B loan portfolio servicing ~1.0 million accounts. Importantly, most of CarMax's $17.3B of long-term debt is non-recourse securitization funding that CAF loan book, so the headline 3.48x liabilities/equity overstates true corporate leverage. Operating cash flow surged 185.7% to $1.78B (inventory/working-capital driven), funding $643M of buybacks (+50%) that cut shares 7.1%.