Financial research concept

Used Auto SG&A as a Percent of Gross Profit

Used auto SG&A as a percent of gross profit measures how much selling, general, and administrative expense consumes the retailer's gross-profit pool.

By Lee BaileyPublished Sep 25, 2026

Research context

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Research date: Sep 25, 2026Use the dated article and cited sources for the definition, examples, and stated limitations.
Operating-model context: 23 connected conceptsPart of the reviewed Used Auto Retail & Finance Economics; issuer definitions remain distinct where disclosed.
Company examples: 1 reviewed companyRelationships reflect supported examples, not a normalized cross-company KPI ranking.

CarMax example
Why gross profit is the denominator
Pair it with per-unit efficiency
Part of the Used Auto Retail & Finance Economics
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Used auto SG&A as a percent of gross profit measures selling, general, and administrative expense relative to the retailer's gross-profit pool.

SG&A as a % of gross profit = SG&A expense ÷ gross profit

A lower percentage generally indicates more gross profit remains before other corporate items, while a higher percentage indicates weaker operating leverage.

CarMax example

CarMax reported SG&A equal to 87.4% of gross profit in fiscal 2026, compared with 84.0% in fiscal 2025.

The company also reported an adjusted version that excluded specified restructuring charges, so investors should distinguish reported and adjusted measures.

Why gross profit is the denominator

For a vehicle retailer, revenue is large relative to gross profit because vehicle cost of sales is also large.

Using gross profit rather than revenue can therefore provide a clearer view of how much of the retailer's economic spread is consumed by overhead.

Pair it with per-unit efficiency

Used Auto SG&A per Total Unit adds a volume-normalized view.

The two measures can diverge when gross profit per vehicle or product mix changes.

Primary source: CarMax fiscal 2026 Form 10-K.

This ratio should not be compared mechanically across retailers that classify reconditioning, service, advertising, or other costs differently.

Part of the Used Auto Retail & Finance Economics

Connect used-vehicle demand, pricing, sourcing, digital transaction mix, wholesale disposition, operating leverage, finance penetration, lending spread, and credit performance across an integrated used-auto retailer.

Browse the full operating model in Company Analysis →

Where this concept fits

Retail volume, pricing, margin, and operating leverageCurrent relationship
Retail unit sales and comparable-store unit growth show demand, average selling price shows transaction value, used-vehicle gross profit per unit shows front-end merchandising margin, and SG&A per total unit plus SG&A as a percent of gross profit show how transaction economics convert through the retailer's overhead base.
Used Auto Comparable Store Unit Sales Growth Used Auto Retail Average Selling Price Used Auto Retail Unit SalesUsed Auto SG&A as a Percent of Gross ProfitCurrent conceptUsed Auto SG&A per Total Unit Used-Vehicle Gross Profit per Unit
Sourcing, digital channel mix, and wholesale disposition
Vehicle purchases from consumers and dealers show inventory sourcing, digitally enabled, omni, and online sales rates show how customers move through the transaction funnel, extended protection plan revenue adds attached-product economics, and wholesale units, selling price, and gross profit per unit show the disposition path for vehicles sold to dealers.
Digitally Enabled Transaction Rate Extended Protection Plan Revenue Used Auto Omni Sales Rate Used Auto Online Retail Sales Rate Vehicle Purchases from Consumers Vehicle Purchases from Dealers Used Auto Wholesale Average Selling Price Used Auto Wholesale Gross Profit per Unit Used Auto Wholesale Unit Sales
Finance origination, spread, and credit performance
Net finance penetration and net auto loans originated show how retail sales feed the lending book, interest margin and its rate show lending spread economics, finance income shows the resulting segment contribution after included credit and direct costs, and past-due, net credit loss, and recovery rates show portfolio performance and loss severity.
Auto Finance Average Recovery Rate Auto Finance Income Auto Finance Interest Margin Auto Finance Interest Margin Rate Net Auto Loans Originated Auto Finance Net Credit Loss Rate Auto Finance Net Penetration Rate Auto Finance Past-Due Account Rate

See It in Company Research

These companies are examples of how the concept is reported or discussed in public filings. Definitions can differ by issuer; these links open company research rather than a normalized metric comparison.

KMXOpen operating-model research →23 of 23 reviewed concepts in Used Auto Retail & Finance EconomicsRetail volume, pricing, margin, and operating leverage6 of 6 bridge concepts supportedContinue through this bridge:Used Auto Comparable Store Unit Sales Growth Used Auto Retail Average Selling Price Used Auto Retail Unit Sales Used Auto SG&A per Total Unit Used-Vehicle Gross Profit per Unit

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