Investing.com --On Tuesday, CarMax Inc. (NYSE: KMX) reported second quarter fiscal 2027 results that exceeded analyst expectations, with adjusted earnings per share of $1.16 compared to the consensus estimate of $0.73.

Shares of the used car retailer rose 2.60% in pre-market trading following the results.

Revenue reached $7.88 billion, surpassing the $7.03 billion analyst estimate and marking a 19.5% increase from the prior year period.

The company used unit sales increased 13.8% to 227,391 vehicles, while comparable store used unit sales rose 13.0%. However, gross profit per retail used unit declined by $111 to $2,105, reflecting pricing actions implemented to support improved sales trends.

Wholesale unit sales increased 15.9% to 160,344 vehicles, though gross profit per wholesale unit decreased $135 to $858.

"Our strong second quarter results reflect solid execution and early progress against Shift into GEAR, our four-pillar strategy to strengthen CarMax’s core business and return the company to sustained growth," said Keith Barr, President and Chief Executive Officer.

CarMax Auto Finance income increased 32.1% to $135.6 million, driven by a decrease in the loan loss provision to $113.4 million.

CAF financed 22% of Tier 2 volume compared to 10% a year ago. Extended Protection Plans margin per retail unit increased $46 to $623.

Selling, general and administrative expenses rose 4.6% to $628.6 million, but improved by $157 per total unit, or 8.8%, to $1,621. The company remains on track to achieve targeted SG&A reductions of $200 million in exit rate savings by the end of fiscal 2027.

Net earnings per diluted share reached $1.16 versus $0.64 in the prior year period, an increase of 81.3%.

The company announced plans to resume share repurchases at a modest level in the third quarter and will host a Strategic Update on November 3rd.

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