With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

This year's 100 Best Companies to Work For are rebuilding the social contract at work so people feel supported, trusted, and future-ready as they undergo that transition.

100 Best Places to Work 2026_CarMax

Employees say:"I love working for CarMax and I will retire with CarMax. CarMax truly cares about the individual, whether customer, associate or community. CarMax is more than a place to work and make money, it completely changed my life. I feel like my personal values align with the CarMax core values and CarMax truly embraces each associate for their own authentic self. I have grown my career from an hourly associate to a Senior Manager and I have felt so much support. I have built financial success in my life through CarMax valuing me as an individual, having honest conversations on where I can improve as well as recognizing me for the strengths I bring to the table. CarMax is the best place to work!"

Fortune 100 Best Companies to Work For

See which workplaces made this year's list.

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Employees say:"CarMax truly cares about innovation and allows employees the opportunity to present ideas and solutions as well as the time to prove out those ideas. Everyday I see people coming together to improve and develop new solutions that make this a great place to work for associates, and provide a better shopping experience for our customers."

Best Large Workplaces in Retail

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The top companies on our list have one thing in common: Staff largely trust leadership to see them as well-rounded people and reward them for a job well done.

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Employees say: "CarMax is very much driven to create a welcoming and associate-first culture. I am confident that company leadership wants to create a company and business model that is ethical and respects customers and employees, instead of chasing short-term profitability."

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

America's Most Innovative Companies

2025 Best Large Workplaces for Parents_CarMax_US1__68b9ad8e7757c3af0ca2bb8e_1

Employees say:"CarMax is, hands down, the best place I have worked in my long career. I truly feel valued here, and I believe my work makes a difference. My colleagues and managers are smart, competent, kind, and enjoyable to work with. Twice a year, we provide company feedback via a survey, and the company has made meaningful changes based on that feedback."

Best Large Workplaces for Parents

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Employees say:"CarMax is very much driven to create a welcoming and associate-first culture. I am confident that company leadership wants to create a company and business model that is ethical and respects customers and employees, instead of chasing short term profitability."

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

Creating a more empathetic workplace looks like staying loyal to workers, emphasizing D&I initiatives, and paying well.

100 Best Companies 2024-CarMax

This is the 20th year that CarMax, a used autos retailer, has appeared on the list.&nbsp;The company has started using AI to support business processes and consumer-facing content, such as car reviews, to help free up employees' time. In addition, CarMax is using AI to power multiple customer experiences, such as giving online offers to customers to sell their car to CarMax in minutes, and providing personalized car recommendations to help customers buy their next car from CarMax quickly. CarMax also invests in its virtual AI assistant, Skye, to help streamline its customer experience centers and support customers as they are shopping, through steps like vehicle shipping and appointment preparation and management. &nbsp;For CarMax, community involvement is big. One of its longest-lasting key relationships is with <a href="https://kaboom.org/">KABOOM!</a>, an accredited charity that builds playgrounds in underfunded and underinvested communities. Since the partnership formed in 2011, more than 11,000 employees have come together to build 206 play spaces.

The 200 companies on this list are transforming industries from the inside out.

Building a culture of trust and transparency is essential to help everyone thrive, especially in rocky economic times.

100 BEST COMPANIES 2023-CarMax

The no-haggle retailer of used autos is appearing on the Best Companies to Work For list for the 19th time this year. 
<ul> 
 	<li>New hires receive a warm welcome even before their first day. As soon as someone accepts a job offer, the team leader calls to welcome them, and a mentor calls to answer any questions they might have before they start.</li> 
 	<li>Elaborate onboarding includes making sure new hires have clear direction about their schedule and are provided with smaller details, such as where they should park and what restaurants are nearby, before their first day.</li> 
 	<li>Workers can utilize the CarMax Connect web platform to get personalized information, aggregated news, and useful company resources.</li> 
 	<li>“It's the first company that I've worked for that makes you feel the company puts its employees first, and truly understands that it's the sum of its parts that make up the whole,” said one employee. “They're also very understanding when it comes to personal issues getting in the way of work and allowing you to take time off to address them, and not make you feel like you're letting the whole company down for doing so.”</li> 
</ul>

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

Fortune Global 500

GPTW 2023 Best Workplaces Retail Large CarMax_6

Employees say: 
 
"I truly feel I am an equal employee. This is the first place that I have worked at where all of management makes you feel equal to them. There are no favorites here, which makes it a very relaxed, amazing place to work."

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

When it comes to supporting employees, flexibility, diversity, and a few extra paid days off go a long way.

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CarMax, the nation’s leading used-car retailer, believes that good customer service begins with treating employees right. At the peak of the pandemic, every CarMax manager met with their associates to help them balance work and family life. As a result, some employees were able to modify their schedules or take a leave of absence that enabled them to continue receiving benefits. And CarMax aims to hold itself to a high standard; associates with concerns over safety or ethics are encouraged to speak up via an open door policy. “The most amazing thing about working here is our managers genuinely care about us,” says one employee. “They will put in extra time and effort to help us with anything we need, even if it’s something in our personal life.”

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

Great Places to Work in Retail Large- 2022-CarMax_1000333-1

Employees say: 
 
“I feel that everyone here is welcoming and accepting of everyone. We are encouraged to develop relationships within our department as well as others. We are empowered to make decisions we feel are necessary in the moment whether it is business or customer related. I can be myself at work and that is a great feeling. I feel people have the best interests of everyone on a personal as well as professional level.”

This year’s Fortune 500 marks the 68th running of the list.

Our 2021 list of the 100 best companies to work for, as ranked by their employees. See which companies made the list.

100-best-companies-2021-37-Carmax

When closures led to furloughs of some employees, it wasn’t just hourly workers who felt the squeeze. “I appreciated that executives took a pay cut and that the board of trustees did not receive any compensation,” one employee writes. (Indeed, CEO William Nash took a 50% cut.) The company covered health insurance premiums for furloughed workers, and an associate disaster relief fund enabled employees to apply for help if they became ill or experienced a qualifying hardship. By the end of July 2020, CarMax no longer had any associates on furlough, and positions had been made available for approximately 99% of impacted employees.

See which retailers made this year's list.

Best-Workplaces-Retail-2021-CarMax

Employees say: 
 
“The culture at CarMax is by far the best out of all the companies I have worked for. I truly feel CarMax appreciates their associates and will go above and beyond to demonstrate that to them. I am proud to say CarMax when people ask where I work!”

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-136-CarMax

As the largest used car retailer in the United States, CarMax generates revenue from both the retail business and its wholesale auction house.

Our 2020 list of the 100 best companies as ranked by their employees. See which companies made the list.

Best-Workplaces-Retail-2020-CarMax

Employees say: 
 
"Carmax is the first company I've worked for that 'walks the walk.' Being a female in a male-dominated industry was difficult, but here I'm treated as an equal, and have had the opportunity to learn in stretch roles, and am now managing my own store!"

This year's Fortune 500 marks the 66th running of the list.

F500-2020-173-CarMax

Founded in 1993, the auto retailer buys and sells used vehicles in its more than 200 store locations across the U.S.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

World's Most Admired Companies

Our 2019 list of the 100 best companies as ranked by their employees. See which companies made the list.

From groceries to apparel to home decor, see which companies made the list.

CarMax-Best Workplaces in Retail 2019

Employees say: 
“I believe the people that are hired here are not just hired by credentials, but also integrity, which plays a big part in creating the Carmax atmosphere. There is plenty of room for growth and opportunity for many people.”

This year's Fortune 500 marks the 65th running of the list.

We surveyed tens of thousands of young employees to create this list of millennials’ favorite workplaces.

Carmax-best workplaces millennials 2019

Employees say: 
“At CarMax everyone cares for each other and is there for each other. We make friends and have a wonderful time at work. We share and help each other through any situation work related or not.”

100 Best Large Workplaces for Millennials

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

Our 2018 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune 500 marks the 64th running of the list.

best-workplaces-millennials-2018-CarMax

Employees say: 
 
&nbsp; 
 
"CarMax really focuses on building skill levels vs. driving numbers. We all know that numbers are the bottom line, but here they focus more on behavior. From my sales experience, if you have the behaviors, and they're strong, the numbers always come." 
 
&nbsp; 
 
"I was hired as a detailer, I couldn't even drive as stick shift. An entry level mechanic position opened and I was afforded the opportunity. I went on to become a master mechanic. After 8 years with the company, I've just accepted an offer for an analyst position at home office. The room for advancement is incredible." 
 
&nbsp;

Our 2017 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune 500 marks the 63rd running of the list.

best workplaces for millennials 2017 CarMax

Employees say: 
 
&nbsp; 
 
"Although I perform the same business functions every day, no two days are the same at CarMax. The employees are a diverse group of people, which makes it especially enjoyable to work here. I have worked at CarMax for over 5 years and plan on working here for many more years to come!" 
 
&nbsp; 
 
"[The company] will not only teach you what you need to or want to know, but will also give you the opportunity to advance yourself by helping pay for schooling. CarMax teaches you a lot about yourself as a person by helping you work on your skills ... They inspire me to be a better person every day." 
 
&nbsp;

Google/Alphabet is the No. 1 place to work for the seventh time in 10 years. Six newcomers include Veterans United at No. 30, Hilton Hotels at No. 56, and Slalom Consulting at No. 100. IKEA’s U.S. arm returns to the list, along with GoDaddy and Sheetz.

This year's Fortune 500 marks the 62nd running of the list.

The second annual ranking of the best employers for workers 35 and under.

best workplaces for millennials 2016- CarMax

"I always enjoy the camaraderie and family feel. CarMax allows me to grow knowing mistakes will happen, making the environment a positive one to work in. The exposure and trainings I have received have given me valuable skill sets that will stick with me for the rest of my life. I also feel that I am a person and not a number!" says one millennial worker. 
 
&nbsp; 
 
"Management really cares about employee development. My manager works closely to help me improve in preparation for a promotion. I am also encouraged to focus on projects and types of work that interest me," explains another millennial. 
 
&nbsp; 
 
Read the .

This year’s list marks Fortune's 18th year of partnering with Great Place to Work. Google ranks No.1 for the sixth time, and 16 new companies make impressive debuts, including Acuity (No. 3), Twitter (No. 24), and Riot Games (No. 13).

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Google tops the list once again, marking its eighth appearance and fifth time as No. 1.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Best Workplaces For Parents

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Best Workplaces In Retail

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CarMax started as a solution for consumers who dreaded a trip to the car dealer. Emphasizing a stress-free experience, it introduced the concept of “no-haggle” purchasing through slogans like “You shouldn’t have to argue to get a fair price.” Now CarMax is the largest U.S. retailer for used cars with 250 stores nationwide and a portfolio of assets worth nearly $18 billion. In its fiscal year ended February 2025, the company sold roughly 790,000 pre-owned vehicles and another 540,000 wholesale vehicles at auctions.

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CarMax (KMX): Company Profile, Stock Price, News, Rankings

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CarMax

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Ladies and gentlemen, thank you for standing by. Welcome to the first quarter fiscal year 2027 CarMax earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To register to ask a question at any time, please press star one on your telephone. We do ask that you please limit yourself to one question. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mr. David Lowenstein, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Beau. Good morning, everyone. Thank you for joining our fiscal 2027 first quarter earnings conference call. I'm here today with Keith Barr, President and CEO, Enrique Mayor-Mora, Executive Vice President and CFO, and Jon Daniels, Executive Vice President, CarMax Auto Finance. Let me remind you, our statements today that are not statements of historical fact, including but not limited to statements regarding the company's future business plans, prospects and financial performance, are forward-looking statements we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our current knowledge, expectations and assumptions and are subject to substantial risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, we disclaim any intent or obligation to update them.

For additional information on important factors and risks that could affect these expectations, please see our Form 8-K filed with the SEC this morning and our annual report on Form 10-K for fiscal year 2026 previously filed with the SEC. Please note, in addition to our earnings release, we have also prepared a quarterly investor presentation and both documents are available on the investor relations section of our website. Should you have any follow-up questions after the call, please feel free to contact our investor relations department at 804-747-0422, extension 7865. Lastly, let me thank you in advance for asking only one question and getting back in the queue for more follow-ups. Keith?

Thank you, David. Good morning, everyone, and thanks for joining us. Since our earnings call last quarter, I've continued spending my time across the entirety of our business, listening and learning while engaging with our associates, customers, and investors. These conversations have reinforced my understanding of both the strengths that differentiate CarMax from our competition and the opportunities we have to execute better, strengthen our performance, and reach our full potential. We have an award-winning people first culture, an iconic brand, an irreplaceable national footprint, and meaningful digital capabilities. No company can replicate these assets at scale. When fully harnessed, this combination enhances our competitive advantage and will drive our market share growth and financial returns in one of the largest consumer markets in America, and one that remains highly fragmented. Our objective is clear, deliver strong unit and earnings growth that enables us to consistently reward our shareholders.

It is also clear there are some areas that have impeded our ability to perform to our full potential. Our core operations are not yet fast and efficient enough. Retail prices and selection must continue to improve, and our costs remain too high. Our digital experience is too complex and not seamlessly connected to the in-person experience. When a customer arrives at one of our stores, we do not make it as easy for them as it should be given all the steps they have taken online. This has put friction in the customer experience, ultimately impacting conversion and preventing us from fully leveraging our unmatched scale and store network. We know exactly what needs to change, and we're moving forward with urgency.

Today, I'm introducing our strategy for growth built around four pillars that place the customer at the center of everything we do and are designed to meaningfully improve how we operate at scale and support consistently strong performance. The first pillar of our strategy is great offering. We will give customers every reason to choose CarMax. We will ensure our pricing remains competitive across demand cycles while we both grow our salable inventory and provide customers faster access to our vehicles. For example, to further improve our price competitiveness, we are incorporating competitive market insights within our pricing algorithms more granularly with a stronger emphasis on local data points. We're expanding comparison points across a broader set of vehicles to sharpen our individual unit pricing. Our second pillar is easy experience. We will make it easy to do business with us through a seamless experience.

Industry research, as well as our own, shows that customers want digital convenience combined with an in-store connection. Buying a car is one of the biggest financial decisions someone makes, and they have a strong desire to see, touch, and test drive a vehicle that will be part of their daily lives for years to come. We see significant opportunities to better integrate our digital capabilities with our stores to improve conversion and the customer experience. Our near-term focus is to simplify communication with customers before they arrive in store, to enhance their readiness to progress upon arrival, and to provide associates with the tools they need to drive conversion. Our stores reach 85% of the U.S. population, which gives us access to the largest total addressable market. We expect more customers will visit our stores, and we will sell more cars.

Our third pillar is to add value on each transaction. This pillar focuses on growing profitability by maximizing value across all aspects of our business and incorporates our CAF Spectrum ambitions, as well as the extended protection plan redesign initiatives that are already underway. Regarding CAF Spectrum, progress will be measured by our ability to grow penetration and drive longer-term profitability. For EPP, progress will be measured by margin expansion over time. On both, we have shown progress this quarter, and I expect it to continue. Our final pillar is run lean. We will reimagine our cost structure to enable a great offering. Initiatives already in flight include reducing reconditioning costs through technology and operational efficiency while continuing to deliver the high-quality vehicles customers expect from CarMax. We are also working to enhance our logistics network and are continuing to reduce our SG&A.

Our focus is to self-fund more competitive vehicle prices through more efficient operations, rather than a combination of lower GPUs and efficiency gains, as we are doing this year. We continue to make progress in this area. In terms of logistics, we are focused on reducing unproductive transfers, resetting our network design, and optimizing fleet utilization across CarMax and third parties. We intend to reduce costs and improve our network for increased speed. Regarding SG&A, last quarter, we increased our fiscal year 2027 exit rate savings target from $150 million-$200 million. We remain on track to achieve this target and will continue to drive for expense efficiencies. We are moving at pace with this strategy.

While this work will take time, we are encouraged that the progress our teams have been making across the four pillars is already translating into improved trends that we expect will continue this year. In respect to our first quarter, retail unit sales reflect the near-term steps we have been taking across pricing, marketing, and conversion to strengthen the business and drive performance. On a year-over-year basis, and against our strongest quarter from fiscal 2026, we delivered slight growth. Additionally, we levered SG&A on a total unit basis, expanded CarMax Auto Finance penetration, and increased extended protection plan margin, all while improving our year-over-year EPS trends. Enrique and Jon will speak to our first quarter performance in detail in a few moments. As I previously stated, our objective is clear: deliver strong unit and earnings growth that enables us to consistently reward our shareholders.

This begins with improving our unit growth by enhancing our customer value proposition through greater affordability, broader selection, and higher conversion. At the same time, we will strengthen earnings power through an improved digital and in-store experience with our stores serving as a structural moat. We'll have a more efficient operating model, deeper customer relationships, and better utilization of our differentiated scale advantages. Together, these outcomes will strengthen our market position and create long-term value for both our customers and shareholders. We plan to hold a strategic update this fall, where we'll provide more detail on key initiatives and milestones. I'm excited about our strategic plan, and I'm confident about the opportunity that lies ahead. Now I'd like to turn it over to Enrique to discuss our first quarter financial performance in more detail. Enrique?

Thanks, Keith, and good morning, everyone. We are encouraged by our performance trajectory as we are showing clear improvements in our year-over-year sales and earnings trends. As Keith noted, we also made progress on SG&A reductions, expansion of EPP margins, and CAF. During the first quarter, we delivered total sales of $8 billion, up 6.2% compared to last year. Across our retail and wholesale channels, we sold approximately 392,000 vehicles combined, up 3.3% versus the first quarter last year. In our retail business, total unit sales grew slightly even as used unit comps were marginally down 0.8%. We delivered this sequential improvement in year-over-year sales despite comping over our strongest and tariff-supported prior year period retail comp of 8.1%.

Sales performance this quarter was supported by more competitive vehicle pricing, an increase in strong ROI acquisition marketing, and by initial progress toward the four strategic pillars that Keith spoke to earlier. Average selling price was $27,288, a year-over-year increase of $1,168 per unit. Wholesale unit sales were up 8.4% versus last year's first quarter. Average wholesale selling price increased by $405 per unit to $8,364. First quarter net earnings per diluted share was $1.31 versus $1.38 in earnings in the first quarter of last year. A strong positive change in year-over-year trend relative to the preceding three quarters. Total gross profit was $854 million, down 4% from last year's first quarter. Used retail margin of $501 million, decreased by 10%, driven primarily by lower profit per used unit of $2,177, which was down $230 per unit from last year's record high first quarter.

In managing margins more dynamically, we lowered GPUs by less than the $300 per retail unit guidance we provided last quarter, as we balanced demand, margins, and efficiency gains in our reconditioning processes to support sales. Wholesale vehicle margin of $169 million increased by 8% from a year ago, with higher volume and relatively flat gross profit per unit of $1,046. Other gross profit was $184 million, flat to a year ago. As Jon noted during our fourth quarter call, we began, in the first quarter, our national rollout of our EPP product redesign, focused on providing our customers with more affordable options, and also offering a new wheel, tire, and dent product. EPP unit margins grew slightly in the first quarter, and our full national rollout is expected by the end of this quarter.

We are on track to drive approximately $35 per unit in incremental EPP margin in FY 2027. CarMax Auto Finance income of $140 million was down 1% year-over-year. Jon will provide detail on CAF in a few moments. On the SG&A front, expenses for the first quarter were $635 million, down 4% from the prior year quarter. SG&A levered by $118 per unit or 7% to $1,619. SG&A dollars for the first quarter versus last year were mainly impacted by two factors. First, total compensation and benefits decreased by $25 million, driven by the actions we have taken to reduce SG&A. In the quarter, both lower CEC and corporate overhead payroll drove the year-over-year favorability. Second, advertising expense increased by $8 million, reflecting higher acquisition marketing spend in support of sales and buys.

First quarter year-over-year SG&A reductions were in line with the related full year expectations we set out in the fourth quarter earnings call. As Keith noted, we are on track to deliver on our $200 million savings target, and we continue to drive toward expense efficiencies. Regarding capital allocation, our priority remains funding the business to drive strong unit and earnings growth that enables us to consistently reward our shareholders. At the same time, we will continue to maintain a disciplined approach to our capital structure, including managing our net leverage to preserve efficient access to the capital markets for both CAF and CarMax overall. Our leverage in the first quarter remains slightly above our targeted range. Returning capital to our shareholders remains a critical piece of our value creation plan, and our intent is to do so at the appropriate time.

I will now turn the call over to Jon to provide more detail on CarMax Auto Finance and our continuing focus on full credit spectrum expansion. Jon?

Thanks, Enrique, and good morning, everyone. During the first quarter, CarMax Auto Finance originated $2.4 billion, resulting in sales penetration of 43.3%, net of three-day payoffs, an increase of 150 basis points versus last year. The weighted average contract rate charged to new customers was 11.3%, relatively in line with last year's Q1. Third party Tier 2 penetration was 15.7% versus 17.7% last year, and third party Tier 3 was 9% versus 8% a year ago. This significant increase in CAF penetration has been signaled previously and is a direct result of our enhanced funding and underwriting efforts. Of note, CAF was the largest Tier 2 lender during the quarter, further demonstrating the progress we are making in our full-spectrum efforts. CAF income for the quarter was $140 million versus $142 million earned in the same period last year.

The loan loss provision was $96 million as compared to $102 million in FY 2026. The net interest margin on the portfolio was 6.7%, an increase of 20 basis points year-over-year. Once again this quarter, credit losses were in line with our expectations. Our loan loss provision of $96 million largely reflects expected charge-offs on newly originated loans and results in a total reserve balance of $475 million, or 2.95% of managed receivables, exclusive of auto loans held for sale. Note, there was a $25 million benefit to this quarter's provision stemming from loans booked prior to the first quarter that were classified as held for sale in Q1. We remain confident in CAF's ability to deliver significant added long-term value to the organization.

Our full-spectrum capabilities continue to strengthen, our evolving ability to deploy a diversified funding approach as needed provides us with tremendous flexibility as we increase CAF's penetration. Ultimately, this planned growth, coupled with our EPP efforts, directly supports our focus on maximizing value on each transaction and will provide future income potential for both CAF and CarMax. Now I'd like to turn the call back over to Keith. Keith?

I came to CarMax because I saw a strong foundation and a significant potential to unlock growth. Three months in, I am more convinced than ever that this is a business with everything it needs to thrive. The work ahead is about removing what has held us back. The strategy we laid out today is not aspirational and is already in motion. Our four strategic pillars set us up to better leverage our strengths and scale to drive strong, profitable growth. We will provide a great offering, giving customers every reason to choose CarMax. We'll provide customers an easy experience in their shopping journey. We will add value on each transaction by growing profitability across all aspects of our business. We will run lean by reimagining our cost structure. While we are still early in this journey, we are encouraged by the progress we are already seeing.

As I look ahead, I am confident that CarMax is uniquely positioned to build on its leadership position and create significant long-term value. We have a clear strategy, a strong foundation, and a team that is committed to delivering for our customers and shareholders. Thank you for your time and continued interest in CarMax. I look forward to speaking with you next quarter and providing you with a more fulsome strategic update in the fall. With that, we'll open the line for questions. Operator?

Thank you, Mr. Barr. Ladies and gentlemen, at this time, if you would like to ask a question, please press star one on your keypad. If you would like to leave the queue at any time, press star two. To get to as many questions as possible, again, we ask that you please limit yourself to one question. We go first this morning to Brian Nagel with Oppenheimer.

The question I want to ask, I want to focus on, I guess it's shorter-term in nature, just on the GPU and sales. As you talked about in your script, we saw GPU down, I guess less than $300, but more than usual here in the fiscal first quarter. The way I want to frame the question is maybe two parts. One, as you look at the business, by resetting this GPU, how much of a benefit do you think there was to unit sales? And then secondarily, as we think about GPU going forward, have you found the sweet spot, or should we expect further tweaks here to get to that sweet spot?

Yeah. Thanks, Brian. I think the work that the team kicked off late last year focusing on pricing really started to build momentum in the business, and we've been further sharpening our focus on that aspect of it, too. Clearly, getting our pricing right on a competitive basis has had a positive impact building momentum into sales. We expect that momentum to continue throughout the year and also to continue to outperform the broader market, too. It definitely has a positive impact. Having the right car at the right price is definitely having a positive impact on our comp sales, and we expect that to continue throughout the remainder of the year. I'll let Enrique talk a little bit more detail about GPU.

Yeah. By GPU, as you recall last quarter, in the near term, we've guided that this year requires some margin concessions to support sales growth. Beyond that near term, our goal is to self-fund strong competitive positioning through more efficient operations rather than lowering GPU, so we can sustain price competitiveness without sacrificing profitability. I'll tell you what, we're off to a strong start. We came in better than the guidance we gave you at the end of the fourth quarter, and we're going to continue to track ahead. This is really a benefit of managing our business more nimbly with more flexibility within the quarter. Rather than being anchored to a certain GPU and running the business around that, we're actually managing to the business and the demand that we see ahead of us within each quarter.

You can see the results here in the first quarter because, again, we're off to a really strong start for the year.

In terms of other sales drivers on the quarter, like I talked about in my prepared remarks, we did increase our spend on marketing. That's another area certainly that as we manage the business more nimbly, rather than being anchored to a certain marketing investment per quarter based on total units, we're reacting to what we're seeing in the market ahead of us. We saw an opportunity to invest in ROI creative marketing, acquisition marketing, and we did, and that supported our sales as well.

Thank you. We go next now to Daniela Haigian with Morgan Stanley.

Thank you, and thanks team for taking the question. Similarly, more near term, since we have the bigger strategic update this fall. Thinking about SG&A, it improved per unit quite nicely. You have ad spend, as you cited, is up year-over-year, and you've also talked about investing in improving the digital experience. How do you think about balancing the increasing OpEx in those two items relative to those $200 million exit rate savings? When you think about on an absolute basis, net-net, how does that compare year-over-year? Thanks.

Yeah. I'd tell you for the year, coming out of the first quarter, we're exactly where we thought we would be when it comes to SG&A savings. We knew the first quarter was going to see actually some year-over-year benefit, largely driven by the cost reductions through our CECs, through our corporate overhead reductions, and we saw that there. In terms of the full year guidance that we provided last quarter, we're not moving off that for the time being. We do expect to see the full $200 million savings reductions by the end of fiscal year 2027. The guidance I provided last quarter still applies to this year, which means for the balance of the year, we could see a little bit of pressure when it comes to year-over-year SG&A. Again, we are on target for the $200 million exit rate.

Daniela, we continue to be focused on SG&A efficiency opportunities along the way.

We go next now to Craig Kennison of Baird.

Hey, good morning. Thanks for taking my question. Keith, I think you mentioned too many unproductive transfers. Can you shed more light on that issue?

Sure. Be happy to, Craig. When we think about our growth strategy and each one of the pillars, one of the key areas is making sure we have the right car at the right location. Transfers are a significant portion of our business. We transfer over 2 million cars a year. Unproductive transfers have two fronts in my mind. One is resetting our logistics network and how we become more efficient in taking cost out of our logistics network, also being crystal clear about how do those transfers then turn into sales, and making sure we're not having unproductive transfers and holds. Really understanding, because that impacts our saleable inventory.

Really focusing on are we transferring the right cars to the right location, to the right customer, and making sure we turn more of those transfers directly into sales, thereby reducing our overall cost in logistics. By reducing our cost in logistics, it underpins our ability to then remain competitive in pricing. They're all interconnected.

CarMax (KMX) Q1 2027 Earnings Call Transcript

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