CarMax Targets Mid-Teens Adjusted EPS Growth Through Fiscal 2030 in Shift into GEAR Plan
CarMax laid out a multi-year plan on Tuesday that targets mid-teens annual growth in adjusted earnings per share and mid-single-digit growth in used retail units through fiscal 2030, according to a press release and investor presentation furnished in an 8-K ahead of its Strategic Update webcast.
The targets are measured from fiscal 2026, when the used-car retailer earned $2.91 per share on an adjusted basis and $1.68 per diluted share on a GAAP basis, the presentation shows. CarMax said all of the targets assume a stable operating environment.
"Our framework targets mid-single-digit used retail unit CAGR and mid-teens adjusted EPS CAGR through fiscal 2030 using fiscal 2026 as a base while maintaining a strong balance sheet and returning excess capital to shareholders in a disciplined manner," Chief Financial Officer Enrique Mayor-Mora said.
Shift into GEAR
The plan, branded Shift into GEAR, rests on four pillars: Great Offering, Easy Experience, Add Value and Run Lean. President and CEO Keith Barr said it is designed to "win more customers, increase value per transaction and lower costs to support competitive pricing and drive operating leverage."
On costs, CarMax is targeting $200 million in run-rate savings exiting fiscal 2027 and savings of "hundreds of dollars per car" from reconditioning and logistics by fiscal 2030. The presentation says those reconditioning and logistics savings will be reinvested in pricing, with retail gross profit per unit held consistent from fiscal 2027. Fiscal 2026 adjusted SG&A of $2.40 billion is the base for its SG&A targets.
A bigger push into non-prime lending
CarMax Auto Finance, which originated $8 billion in loans in fiscal 2026 and has a $16 billion portfolio, will expand in stages into Tier 2, or non-prime, borrowers. The company is targeting a 40% share of CarMax's Tier 2 customers by fiscal 2030, up from 10% in the second quarter of fiscal 2026.
The presentation warns that the push will weigh on finance income first. Upfront loss provisions in the first year "more than offset" Tier 2 income, the company said, with income expected to outgrow provisions from the second year on.
CarMax is also targeting growth of 20% or more in extended protection plan profit per retail unit by fiscal 2030.
Capital plans
CarMax plans capital spending of an estimated $500 million a year starting in fiscal 2028, the company said, for physical locations, technology modernization and AI capabilities. It aims to keep leverage within a long-term target range of 1.5 times to 2.0 times and to continue a disciplined share repurchase program, which it expects to add a low-single-digit contribution to EPS growth.
By the numbers
- Adjusted EPS target: mid-teens CAGR, fiscal 2026 to fiscal 2030
- Fiscal 2026 adjusted EPS base: $2.91
- Used retail unit target: mid-single-digit CAGR
- Run-rate savings exiting fiscal 2027: $200 million
- Tier 2 finance share target: 40% by fiscal 2030
- Stores: 258
Sources
- CarMax Form 8-K with Strategic Update press release and presentation, filed Nov. 3, 2026 (accession 0001170010-26-000110)
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