KMXCAUTIOUS

KMX Gross Margin Analysis

10.7%

Higher than 10% of Consumer Cyclical sector peers

Updated 582h ago·SEC filings & market data

Key Takeaway

Gross margin is the share of each sales dollar left after paying the direct cost of the vehicle, before other expenses like rent and wages; at 10.7%, CarMax keeps about 10.7 cents per dollar of revenue from its core sales.

Sector Performance

10th percentile

KMX

10.7%

Sector Median

34.5%

Sector Avg

27.6%

Prior Period

10.2%(Jun 2026)

↑ Improving

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Deep Analysis

That level is far below the sector median of 34.2%, placing CarMax in the 11th percentile among consumer cyclical peers, meaning most comparable companies retain a much larger slice of revenue. The trend data is unavailable: the year-over-year change is N/A, and the quarter-over-quarter change is also N/A, so there is no recent trajectory to confirm improvement or deterioration. Because the gross margin is both very low relative to peers and lacks any directional trend, the investment risk is elevated—there is no evidence that profitability from sales is strengthening, only a static snapshot of weak pricing power. This metric directly supports the overall CAUTIOUS verdict: a thin and unchanging gross margin leaves limited buffer for cost increases or competitive pressure.

Frequently Asked Questions

What does the Gross Margin tell investors about KMX?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does KMX's Gross Margin compare to its sector?

KMX's Gross Margin of 10.7% compares to a Consumer Cyclical sector median of 34.5%, placing it in the 10th percentile.

Who are KMX's closest peers by Gross Margin?

The closest Consumer Cyclical peers by Gross Margin include: CHWY (30.1%), W (30.0%), JACK (29.9%), ROST (29.6%), RH (41.4%).

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Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.