CarMax Reports Second Quarter Fiscal Year 2025 Results
Delivers positive retail used unit growth and double-digit earnings increase
Second Quarter Highlights:
- Retail used unit sales increased 5.1% and comparable store used unit sales increased 4.3% from the prior year’s second quarter; wholesale units decreased 0.3%.
-
Gross profit per retail used unit of
$2,269 and gross profit per wholesale unit of$975 , both in line with last year. Extended Protection Plan (EPP) margin growth of$69 per retail unit to$575 and service margin growth of$84 per retail unit from the prior year’s second quarter. -
Bought 300,000 vehicles from consumers and dealers, up 2.9% versus last year’s second quarter.
- 269,000 vehicles were purchased from consumers, down 1.2% from last year’s second quarter.
- 31,000 vehicles were purchased through dealers, up 61.4% from last year’s second quarter.
-
SG&A of
$610.6 million increased 4.2% from last year’s second quarter, partially driven by year-over-year dynamics related to the bonus accrual. Ongoing cost management efforts supported strong leverage in SG&A as a percent of gross profit. -
CarMax Auto Finance (CAF) income of
$115.6 million , a decline of 14.4% from last year’s second quarter as an increase in the provision for loan losses outweighed growth in CAF’s average managed receivables and a stable net interest margin percentage.-
Increased estimate of lifetime losses on existing loans by
$52.2 million , which we believe was largely related to the recent industry wide worsening of auto loan losses. - Executed our inaugural higher prime and non-prime public asset-backed securitization deals, enabling the funding foundation for CAF’s full-spectrum lending platform.
-
Increased estimate of lifetime losses on existing loans by
-
Net earnings per diluted share of
$0.85 versus$0.75 a year ago, up 13.3%. -
Repurchased
$106.1 million in shares of common stock in the second quarter of fiscal year 2025.
CEO Commentary:
“We are pleased with the continued improvement of the business in the second quarter, which reflects the positive impact of our durable actions to further differentiate the value and experience we offer associates and customers, continued year-over-year price declines, and improved stability in vehicle valuations,” said
Second Quarter Business Performance Review:
Sales . Combined retail and wholesale used vehicle unit sales were 352,478, an increase of 2.9% from the prior year’s second quarter.
Total retail used vehicle unit sales increased 5.1% to 211,020 compared to the prior year’s second quarter. Comparable store used unit sales increased 4.3% from the prior year’s second quarter. Total retail used vehicle revenues increased 1.5% compared with the prior year’s second quarter, driven by the increase in retail used units sold, partially offset by the decrease in average retail selling price, which declined approximately
Total wholesale vehicle unit sales decreased 0.3% to 141,458 versus the prior year’s second quarter. Total wholesale revenues decreased 12.7% compared with the prior year’s second quarter primarily due to a decrease in the average wholesale selling price of approximately
We bought 300,000 vehicles from consumers and dealers, up 2.9% compared to last year’s second quarter. Of these vehicles, 269,000 were bought from consumers and 31,000 were bought through dealers, a decrease of 1.2% and an increase of 61.4%, respectively, from last year’s second quarter.
Other sales and revenues increased by 13.2% compared with the second quarter of fiscal 2024, representing an increase of
Online retail sales(1) accounted for 15% of retail unit sales, compared to 14% in the second quarter of last year. Revenue from online transactions(2), including retail and wholesale unit sales, was
Gross Profit
. Total gross profit was
Wholesale vehicle gross profit increased 0.9% versus the prior year’s second quarter. Gross profit per unit was
Other gross profit increased 33.1% primarily reflecting an increase in EPP revenues primarily resulting from stronger margins and a year-over-year improvement in service gross profit driven by the efficiency and cost coverage measures that we have implemented as well as by the positive retail unit growth.
SG&A
. Compared with the second quarter of fiscal 2024, SG&A expenses increased 4.2% or
CarMax Auto Finance
.(3) CAF income decreased 14.4% to
As of
CAF’s total interest margin percentage, which represents the spread between interest and fees charged to consumers and our funding costs, was 6.1% of average managed receivables, consistent with the prior year’s second quarter and this year’s first quarter. After the effect of 3-day payoffs, CAF financed 42.0% of units sold in the current quarter, down slightly from 42.8% in the prior year’s second quarter. CAF’s weighted average contract rate was 11.5% in the quarter, up from 11.1% in the second quarter last year.
Share Repurchase Activity
. During the second quarter of fiscal year 2025, we repurchased 1.4 million shares of common stock for
Location Openings
. During the second quarter of fiscal 2025, we opened two new store locations in
|
(1) |
An online retail unit sale is defined as a sale where the customer completes all four of these major transactional activities remotely: reserving the vehicle; financing the vehicle, if needed; trading-in or opting out of a trade in; and creating a remote sales order. |
|
(2) |
Revenue from online transactions is defined as revenue from retail sales that qualify for an online retail sale, as well as any EPP and third-party finance contribution, wholesale sales where the winning bid was an online bid, and all revenue earned by Edmunds. |
|
(3) |
Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions. |
Supplemental Financial Information
Amounts and percentage calculations may not total due to rounding.
Sales Components
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||
|
(In millions) |
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
|||||||||
|
Used vehicle sales |
$ |
5,677.1 |
|
$ |
5,591.1 |
|
|
1.5 |
% |
|
$ |
11,354.6 |
|
|
$ |
11,592.6 |
|
|
(2.1 |
)% |
|
Wholesale vehicle sales |
|
1,154.5 |
|
|
1,322.0 |
|
|
(12.7 |
)% |
|
|
2,410.9 |
|
|
|
2,836.3 |
|
|
(15.0 |
)% |
|
Other sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Extended protection plan revenues |
|
121.4 |
|
|
101.7 |
|
|
19.3 |
% |
|
|
240.2 |
|
|
|
212.9 |
|
|
12.8 |
% |
|
Third-party finance income/(fees), net |
|
1.4 |
|
|
(1.5 |
) |
|
197.2 |
% |
|
|
(0.2 |
) |
|
|
(1.2 |
) |
|
80.5 |
% |
|
Advertising & subscription revenues (1) |
|
34.3 |
|
|
33.5 |
|
|
2.5 |
% |
|
|
69.0 |
|
|
|
64.9 |
|
|
6.4 |
% |
|
Other |
|
24.9 |
|
|
27.0 |
|
|
(8.0 |
)% |
|
|
52.5 |
|
|
|
55.3 |
|
|
(5.2 |
)% |
|
Total other sales and revenues |
|
182.0 |
|
|
160.7 |
|
|
13.2 |
% |
|
|
361.5 |
|
|
|
331.9 |
|
|
8.9 |
% |
|
Total net sales and operating revenues |
$ |
7,013.5 |
|
$ |
7,073.8 |
|
|
(0.9 |
)% |
|
$ |
14,126.9 |
|
|
$ |
14,760.9 |
|
|
(4.3 |
)% |
|
(1) |
Excludes intercompany revenues that have been eliminated in consolidation. |
Unit Sales
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
||
|
Used vehicles |
211,020 |
|
200,825 |
|
5.1 |
% |
|
422,152 |
|
418,749 |
|
0.8 |
% |
|
Wholesale vehicles |
141,458 |
|
141,837 |
|
(0.3 |
)% |
|
289,143 |
|
302,885 |
|
(4.5 |
)% |
Average Selling Prices
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
|
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
||||||
|
Used vehicles |
$ |
26,245 |
|
$ |
27,500 |
|
(4.6 |
)% |
|
$ |
26,386 |
|
$ |
27,374 |
|
(3.6 |
)% |
|
Wholesale vehicles |
$ |
7,768 |
|
$ |
8,923 |
|
(12.9 |
)% |
|
$ |
7,935 |
|
$ |
8,977 |
|
(11.6 |
)% |
Vehicle Sales Changes
|
|
Three Months Ended |
|
Six Months Ended |
||||||
|
|
2024 |
2023 |
|
2024 |
2023 |
||||
|
Used vehicle units |
5.1 |
% |
(7.4 |
)% |
|
0.8 |
% |
(8.5 |
)% |
|
Used vehicle revenues |
1.5 |
% |
(11.0 |
)% |
|
(2.1 |
)% |
(12.8 |
)% |
|
|
|
|
|
|
|
||||
|
Wholesale vehicle units |
(0.3 |
)% |
(11.2 |
)% |
|
(4.5 |
)% |
(12.5 |
)% |
|
Wholesale vehicle revenues |
(12.7 |
)% |
(21.8 |
)% |
|
(15.0 |
)% |
(25.5 |
)% |
Comparable Store Used Vehicle Sales Changes (1)
|
|
Three Months Ended |
|
Six Months Ended |
||||||
|
|
2024 |
2023 |
|
2024 |
2023 |
||||
|
Used vehicle units |
4.3 |
% |
(9.0 |
)% |
|
0.1 |
% |
(10.3 |
)% |
|
Used vehicle revenues |
(0.2 |
)% |
(12.5 |
)% |
|
(3.3 |
)% |
(14.4 |
)% |
|
(1) |
Stores are added to the comparable store base beginning in their fourteenth full month of operation. Comparable store calculations include results for a set of stores that were included in our comparable store base in both the current and corresponding prior year periods. |
Used Vehicle Financing Penetration by Channel (Before the Impact of 3-day Payoffs) (1)
|
|
Three Months Ended |
|
Six Months Ended |
||||||
|
|
2024 |
2023 |
|
2024 |
2023 |
||||
|
CAF (2) |
44.6 |
% |
46.4 |
% |
|
45.0 |
% |
45.9 |
% |
|
Tier 2 (3) |
17.7 |
% |
18.1 |
% |
|
18.2 |
% |
19.3 |
% |
|
Tier 3 (4) |
6.7 |
% |
6.4 |
% |
|
7.1 |
% |
6.6 |
% |
|
Other (5) |
31.0 |
% |
29.1 |
% |
|
29.7 |
% |
28.2 |
% |
|
Total |
100.0 |
% |
100.0 |
% |
|
100.0 |
% |
100.0 |
% |
|
(1) |
Calculated as used vehicle units financed for respective channel as a percentage of total used units sold. |
|
(2) |
Includes CAF's Tier 2 and Tier 3 loan originations, which represent approximately 2% of total used units sold. |
|
(3) |
Third-party finance providers who generally pay us a fee or to whom no fee is paid. |
|
(4) |
Third-party finance providers to whom we pay a fee. |
|
(5) |
Represents customers arranging their own financing and customers that do not require financing. |
Selected Operating Ratios
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
(In millions) |
2024 |
% (1) |
|
2023 |
% (1) |
|
2024 |
% (1) |
|
2023 |
% (1) |
||||
|
Net sales and operating revenues |
$ |
7,013.5 |
100.0 |
|
$ |
7,073.8 |
100.0 |
|
$ |
14,126.9 |
100.0 |
|
$ |
14,760.9 |
100.0 |
|
Gross profit |
$ |
760.5 |
10.8 |
|
$ |
696.8 |
9.8 |
|
$ |
1,552.4 |
11.0 |
|
$ |
1,514.2 |
10.3 |
|
CarMax Auto Finance income |
$ |
115.6 |
1.6 |
|
$ |
135.0 |
1.9 |
|
$ |
262.6 |
1.9 |
|
$ |
272.3 |
1.8 |
|
Selling, general, and administrative expenses |
$ |
610.6 |
8.7 |
|
$ |
585.7 |
8.3 |
|
$ |
1,249.1 |
8.8 |
|
$ |
1,145.5 |
7.8 |
|
Interest expense |
$ |
27.0 |
0.4 |
|
$ |
31.6 |
0.4 |
|
$ |
58.4 |
0.4 |
|
$ |
62.1 |
0.4 |
|
Earnings before income taxes |
$ |
177.8 |
2.5 |
|
$ |
158.3 |
2.2 |
|
$ |
384.5 |
2.7 |
|
$ |
465.5 |
3.2 |
|
Net earnings |
$ |
132.8 |
1.9 |
|
$ |
118.6 |
1.7 |
|
$ |
285.2 |
2.0 |
|
$ |
346.9 |
2.4 |
|
(1) |
Calculated as a percentage of net sales and operating revenues. |
Gross Profit (1)
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
|
(In millions) |
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
||||||
|
Used vehicle gross profit |
$ |
478.8 |
|
$ |
452.1 |
|
5.9 |
% |
|
$ |
974.3 |
|
$ |
966.7 |
|
0.8 |
% |
|
Wholesale vehicle gross profit |
|
137.9 |
|
|
136.6 |
|
0.9 |
% |
|
|
295.0 |
|
|
304.4 |
|
(3.1 |
)% |
|
Other gross profit |
|
143.8 |
|
|
108.1 |
|
33.1 |
% |
|
|
283.1 |
|
|
243.1 |
|
16.5 |
% |
|
Total |
$ |
760.5 |
|
$ |
696.8 |
|
9.1 |
% |
|
$ |
1,552.4 |
|
$ |
1,514.2 |
|
2.5 |
% |
|
(1) |
Amounts are net of intercompany eliminations. |
Gross Profit per Unit (1)
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
2024 |
2023 |
|
2024 |
2023 |
||||||||
|
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
||||
|
Used vehicle gross profit per unit |
$ |
2,269 |
8.4 |
$ |
2,251 |
8.1 |
|
$ |
2,308 |
8.6 |
$ |
2,309 |
8.3 |
|
Wholesale vehicle gross profit per unit |
$ |
975 |
11.9 |
$ |
963 |
10.3 |
|
$ |
1,020 |
12.2 |
$ |
1,005 |
10.7 |
|
Other gross profit per unit |
$ |
682 |
79.0 |
$ |
538 |
67.2 |
|
$ |
671 |
78.3 |
$ |
580 |
73.2 |
|
(1) |
Amounts are net of intercompany eliminations. Those eliminations had the effect of increasing used vehicle gross profit per unit and wholesale vehicle gross profit per unit and decreasing other gross profit per unit by immaterial amounts. |
|
(2) |
Calculated as category gross profit divided by its respective units sold, except the other category, which is divided by total used units sold. |
|
(3) |
Calculated as a percentage of its respective sales or revenue. |
SG&A Expenses (1)
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
|
(In millions) |
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
||||||||||
|
Compensation and benefits: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Compensation and benefits, excluding share-based compensation expense |
$ |
321.3 |
|
|
$ |
305.7 |
|
|
5.1 |
% |
|
$ |
649.4 |
|
|
$ |
636.4 |
|
|
2.0 |
% |
|
Share-based compensation expense |
|
32.1 |
|
|
|
31.3 |
|
|
2.7 |
% |
|
|
79.2 |
|
|
|
66.6 |
|
|
19.0 |
% |
|
Total compensation and benefits (2) |
$ |
353.4 |
|
|
$ |
337.0 |
|
|
4.9 |
% |
|
$ |
728.6 |
|
|
$ |
703.0 |
|
|
3.6 |
% |
|
Occupancy costs |
|
74.7 |
|
|
|
67.8 |
|
|
10.3 |
% |
|
|
145.3 |
|
|
|
133.9 |
|
|
8.5 |
% |
|
Advertising expense |
|
63.0 |
|
|
|
66.3 |
|
|
(5.0 |
)% |
|
|
134.7 |
|
|
|
138.2 |
|
|
(2.5 |
)% |
|
Other overhead costs (3) |
|
119.5 |
|
|
|
114.6 |
|
|
4.3 |
% |
|
|
240.5 |
|
|
|
170.4 |
|
|
41.2 |
% |
|
Total SG&A expenses |
$ |
610.6 |
|
|
$ |
585.7 |
|
|
4.2 |
% |
|
$ |
1,249.1 |
|
|
$ |
1,145.5 |
|
|
9.0 |
% |
|
SG&A as a % of gross profit |
|
80.3 |
% |
|
|
84.1 |
% |
|
(3.8 |
)% |
|
|
80.5 |
% |
|
|
75.7 |
% |
|
4.8 |
% |
|
(1) |
Amounts are net of intercompany eliminations. |
|
(2) |
Excludes compensation and benefits related to reconditioning and vehicle repair service, which are included in cost of sales. |
|
(3) |
Includes IT expenses, non-CAF bad debt, insurance, travel, charitable contributions, preopening and relocation costs, and other administrative expenses. |
Components of CAF Income and Other CAF Information
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
|
(In millions) |
2024 |
% (1) |
2023 |
% (1) |
|
2024 |
% (1) |
2023 |
% (1) |
||||||||||||
|
Interest margin: |
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest and fee income |
$ |
464.5 |
|
10.5 |
|
$ |
416.9 |
|
9.6 |
|
|
$ |
917.0 |
|
10.4 |
|
$ |
817.4 |
|
9.5 |
|
|
Interest expense |
|
(193.7 |
) |
(4.4 |
) |
|
(152.0 |
) |
(3.5 |
) |
|
|
(376.0 |
) |
(4.3 |
) |
|
(294.6 |
) |
(3.4 |
) |
|
Total interest margin |
|
270.8 |
|
6.1 |
|
|
264.9 |
|
6.1 |
|
|
|
541.0 |
|
6.1 |
|
|
522.8 |
|
6.1 |
|
|
Provision for loan losses |
|
(112.6 |
) |
(2.5 |
) |
|
(89.8 |
) |
(2.1 |
) |
|
|
(193.8 |
) |
(2.2 |
) |
|
(170.7 |
) |
(2.0 |
) |
|
Total interest margin after provision for loan losses |
|
158.2 |
|
3.6 |
|
|
175.1 |
|
4.0 |
|
|
|
347.2 |
|
3.9 |
|
|
352.1 |
|
4.1 |
|
|
Total direct expenses |
|
(42.6 |
) |
(1.0 |
) |
|
(40.2 |
) |
(0.9 |
) |
|
|
(84.6 |
) |
(1.0 |
) |
|
(79.8 |
) |
(0.9 |
) |
|
CarMax Auto Finance income |
$ |
115.6 |
|
2.6 |
|
$ |
135.0 |
|
3.1 |
|
|
$ |
262.6 |
|
3.0 |
|
$ |
272.3 |
|
3.2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Total average managed receivables |
$ |
17,728.8 |
|
|
$ |
17,315.6 |
|
|
|
$ |
17,640.0 |
|
|
$ |
17,159.5 |
|
|
||||
|
Net loans originated |
$ |
2,159.7 |
|
|
$ |
2,197.2 |
|
|
|
$ |
4,425.5 |
|
|
$ |
4,537.6 |
|
|
||||
|
Net penetration rate |
|
42.0 |
% |
|
|
42.8 |
% |
|
|
|
42.6 |
% |
|
|
42.8 |
% |
|
||||
|
Weighted average contract rate |
|
11.5 |
% |
|
|
11.1 |
% |
|
|
|
11.4 |
% |
|
|
11.1 |
% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Ending allowance for loan losses |
$ |
500.8 |
|
|
$ |
538.0 |
|
|
|
$ |
500.8 |
|
|
$ |
538.0 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Warehouse facility information: |
|
|
|
|
|
|
|
|
|
||||||||||||
|
Ending funded receivables |
$ |
3,743.6 |
|
|
$ |
4,419.6 |
|
|
|
$ |
3,743.6 |
|
|
$ |
4,419.6 |
|
|
||||
|
Ending unused capacity |
$ |
2,356.4 |
|
|
$ |
1,180.4 |
|
|
|
$ |
2,356.4 |
|
|
$ |
1,180.4 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(1) |
Annualized percentage of total average managed receivables. |
Earnings Highlights
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
|
(In millions except per share data) |
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
||||||
|
Net earnings |
$ |
132.8 |
|
$ |
118.6 |
|
11.9 |
% |
|
$ |
285.2 |
|
$ |
346.9 |
|
(17.8 |
)% |
|
Diluted weighted average shares outstanding |
|
156.5 |
|
|
159.2 |
|
(1.7 |
)% |
|
|
157.1 |
|
|
158.9 |
|
(1.1 |
)% |
|
Net earnings per diluted share |
$ |
0.85 |
|
$ |
0.75 |
|
13.3 |
% |
|
$ |
1.82 |
|
$ |
2.18 |
|
(16.5 |
)% |
Conference Call Information
We will host a conference call for investors at
A replay of the webcast will be available on the company’s website at investors.carmax.com through
Third Quarter Fiscal 2025 Earnings Release Date
We currently plan to release results for the third quarter ending
About CarMax
CarMax, the nation’s largest retailer of used autos, revolutionized the automotive retail industry by driving integrity, honesty and transparency in every interaction. The company offers a truly personalized experience with the option for customers to do as much, or as little, online and in-store as they want. During the fiscal year ended
Forward-Looking Statements
We caution readers that the statements contained in this release that are not statements of historical fact, including statements about our future business plans, operations, challenges, opportunities or prospects, including without limitation any statements or factors regarding expected operating capacity, sales, inventory, market share, financial targets, revenue, margins, expenses, liquidity, loan originations, capital expenditures, share repurchase plans, debt obligations or earnings, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of words such as “anticipate,” “believe,” “could,” “enable,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “positioned,” “predict,” “should,” “target,” “will” and other similar expressions, whether in the negative or affirmative. Such forward-looking statements are based upon management’s current knowledge, expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially from anticipated results. Among the factors that could cause actual results and outcomes to differ materially from those contained in the forward-looking statements are the following:
- Changes in the competitive landscape and/or our failure to successfully adjust to such changes.
-
Changes in general or regional
U.S. economic conditions, including inflationary pressures, fluctuating interest rates and the potential impact of international events. - Changes in the availability or cost of capital and working capital financing, including changes related to the asset-backed securitization market.
- Events that damage our reputation or harm the perception of the quality of our brand.
- Significant changes in prices of new and used vehicles.
- A reduction in the availability of or access to sources of inventory or a failure to expeditiously liquidate inventory.
- Our inability to realize the benefits associated with our omni-channel platform.
- Factors related to geographic and sales growth, including the inability to effectively manage our growth.
- Our inability to recruit, develop and retain associates and maintain positive associate relations.
- The loss of key associates from our store, regional or corporate management teams or a significant increase in labor costs.
- Changes in economic conditions or other factors that result in greater credit losses for CAF’s portfolio of auto loans receivable than anticipated.
- The failure or inability to realize the benefits associated with our strategic investments.
- Changes in consumer credit availability provided by our third-party finance providers.
- Changes in the availability of extended protection plan products from third-party providers.
- The performance of the third-party vendors we rely on for key components of our business.
- Adverse conditions affecting one or more automotive manufacturers, and manufacturer recalls.
-
The inaccuracy of estimates and assumptions used in the preparation of our financial statements, or the effect of new accounting requirements or changes to
U.S. generally accepted accounting principles. - The failure or inability to adequately protect our intellectual property.
- The occurrence of severe weather events.
- The failure or inability to meet our environmental goals or satisfy related disclosure requirements.
- Factors related to the geographic concentration of our stores.
- Security breaches or other events that result in the misappropriation, loss or other unauthorized disclosure of confidential customer, associate or corporate information.
- The failure of or inability to sufficiently enhance key information systems.
- Factors related to the regulatory and legislative environment in which we operate.
- The effect of various litigation matters.
- The volatility in the market price for our common stock.
For more details on factors that could affect expectations, see our Annual Report on Form 10-K for the fiscal year ended
|
|
|||||||||||||||||||||||
|
CONSOLIDATED STATEMENTS OF EARNINGS |
|||||||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||||
|
(In thousands except per share data) |
2024 |
|
%(1) |
|
2023 |
|
%(1) |
|
2024 |
|
%(1) |
|
2023 |
|
%(1) |
||||||||
|
SALES AND OPERATING REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Used vehicle sales |
$ |
5,677,081 |
|
80.9 |
$ |
5,591,143 |
|
79.0 |
|
$ |
11,354,557 |
|
|
80.4 |
|
$ |
11,592,614 |
|
|
78.5 |
|||
|
Wholesale vehicle sales |
|
1,154,465 |
|
16.5 |
|
1,321,975 |
|
18.7 |
|
|
2,410,904 |
|
|
17.1 |
|
|
2,836,338 |
|
|
19.2 |
|||
|
Other sales and revenues |
|
181,983 |
|
2.6 |
|
160,718 |
|
2.3 |
|
|
361,465 |
|
|
2.6 |
|
|
331,947 |
|
|
2.2 |
|||
|
NET SALES AND OPERATING REVENUES |
|
7,013,529 |
|
100.0 |
|
7,073,836 |
|
100.0 |
|
|
14,126,926 |
|
|
100.0 |
|
|
14,760,899 |
|
|
100.0 |
|||
|
COST OF SALES: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Used vehicle cost of sales |
|
5,198,315 |
|
74.1 |
|
5,139,034 |
|
72.6 |
|
|
10,380,294 |
|
|
73.5 |
|
|
10,625,880 |
|
|
72.0 |
|||
|
Wholesale vehicle cost of sales |
|
1,016,590 |
|
14.5 |
|
1,185,359 |
|
16.8 |
|
|
2,115,901 |
|
|
15.0 |
|
|
2,531,897 |
|
|
17.2 |
|||
|
Other cost of sales |
|
38,157 |
|
0.5 |
|
52,678 |
|
0.7 |
|
|
78,369 |
|
|
0.6 |
|
|
88,967 |
|
|
0.6 |
|||
|
TOTAL COST OF SALES |
|
6,253,062 |
|
89.2 |
|
6,377,071 |
|
90.2 |
|
|
12,574,564 |
|
|
89.0 |
|
|
13,246,744 |
|
|
89.7 |
|||
|
GROSS PROFIT |
|
760,467 |
|
10.8 |
|
696,765 |
|
9.8 |
|
|
1,552,362 |
|
|
11.0 |
|
|
1,514,155 |
|
|
10.3 |
|||
|
CARMAX AUTO FINANCE INCOME |
|
115,580 |
|
1.6 |
|
134,987 |
|
1.9 |
|
|
262,550 |
|
|
1.9 |
|
|
272,345 |
|
|
1.8 |
|||
|
Selling, general, and administrative expenses |
|
610,562 |
|
8.7 |
|
585,694 |
|
8.3 |
|
|
1,249,140 |
|
|
8.8 |
|
|
1,145,531 |
|
|
7.8 |
|||
|
Depreciation and amortization |
|
63,901 |
|
0.9 |
|
58,817 |
|
0.8 |
|
|
125,770 |
|
|
0.9 |
|
|
117,236 |
|
|
0.8 |
|||
|
Interest expense |
|
27,021 |
|
0.4 |
|
31,585 |
|
0.4 |
|
|
58,383 |
|
|
0.4 |
|
|
62,051 |
|
|
0.4 |
|||
|
Other income |
|
(3,281 |
) |
— |
|
(2,630 |
) |
— |
|
|
(2,865 |
) |
|
— |
|
|
(3,844 |
) |
|
— |
|||
|
Earnings before income taxes |
|
177,844 |
|
2.5 |
|
158,286 |
|
2.2 |
|
|
384,484 |
|
|
2.7 |
|
|
465,526 |
|
|
3.2 |
|||
|
Income tax provision |
|
45,035 |
|
0.6 |
|
39,651 |
|
0.6 |
|
|
99,235 |
|
|
0.7 |
|
|
118,593 |
|
|
0.8 |
|||
|
NET EARNINGS |
$ |
132,809 |
|
1.9 |
$ |
118,635 |
|
1.7 |
|
$ |
285,249 |
|
|
2.0 |
|
$ |
346,933 |
|
|
2.4 |
|||
|
WEIGHTED AVERAGE COMMON SHARES: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Basic |
|
155,866 |
|
|
|
158,479 |
|
|
|
|
156,513 |
|
|
|
|
|
158,298 |
|
|
|
|||
|
Diluted |
|
156,526 |
|
|
|
159,238 |
|
|
|
|
157,116 |
|
|
|
|
|
158,900 |
|
|
|
|||
|
NET EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Basic |
$ |
0.85 |
|
|
$ |
0.75 |
|
|
|
$ |
1.82 |
|
|
|
|
$ |
2.19 |
|
|
|
|||
|
Diluted |
$ |
0.85 |
|
|
$ |
0.75 |
|
|
|
$ |
1.82 |
|
|
|
|
$ |
2.18 |
|
|
|
|||
|
(1) |
Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding. |
|
|
||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||
|
(UNAUDITED) |
||||||||
|
|
As of |
|||||||
|
|
|
|
|
|
|
|||
|
(In thousands except share data) |
2024 |
|
2024 |
|
2023 |
|||
|
ASSETS |
|
|
|
|
|
|||
|
CURRENT ASSETS: |
|
|
|
|
|
|||
|
Cash and cash equivalents |
$ |
524,667 |
|
$ |
574,142 |
|
$ |
521,098 |
|
Restricted cash from collections on auto loans receivable |
|
572,630 |
|
|
506,648 |
|
|
534,792 |
|
Accounts receivable, net |
|
228,112 |
|
|
221,153 |
|
|
271,874 |
|
Inventory |
|
3,397,746 |
|
|
3,678,070 |
|
|
3,839,286 |
|
Other current assets |
|
135,901 |
|
|
246,581 |
|
|
219,321 |
|
TOTAL CURRENT ASSETS |
|
4,859,056 |
|
|
5,226,594 |
|
|
5,386,371 |
|
Auto loans receivable, net |
|
17,413,589 |
|
|
17,011,844 |
|
|
16,999,750 |
|
Property and equipment, net |
|
3,763,089 |
|
|
3,665,530 |
|
|
3,538,683 |
|
Deferred income taxes |
|
126,883 |
|
|
98,790 |
|
|
111,919 |
|
Operating lease assets |
|
495,783 |
|
|
520,717 |
|
|
540,718 |
|
|
|
141,258 |
|
|
141,258 |
|
|
141,258 |
|
Other assets |
|
496,160 |
|
|
532,064 |
|
|
581,462 |
|
TOTAL ASSETS |
$ |
27,295,818 |
|
$ |
27,196,797 |
|
$ |
27,300,161 |
|
|
|
|
|
|
|
|||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|||
|
CURRENT LIABILITIES: |
|
|
|
|
|
|||
|
Accounts payable |
$ |
1,008,044 |
|
$ |
933,708 |
|
$ |
932,068 |
|
Accrued expenses and other current liabilities |
|
483,922 |
|
|
523,971 |
|
|
513,137 |
|
Accrued income taxes |
|
34,063 |
|
|
— |
|
|
103 |
|
Current portion of operating lease liabilities |
|
57,959 |
|
|
57,161 |
|
|
55,441 |
|
Current portion of long-term debt |
|
21,771 |
|
|
313,282 |
|
|
312,230 |
|
Current portion of non-recourse notes payable |
|
550,045 |
|
|
484,167 |
|
|
507,409 |
|
TOTAL CURRENT LIABILITIES |
|
2,155,804 |
|
|
2,312,289 |
|
|
2,320,388 |
|
Long-term debt, excluding current portion |
|
1,588,260 |
|
|
1,602,355 |
|
|
1,608,724 |
|
Non-recourse notes payable, excluding current portion |
|
16,516,943 |
|
|
16,357,301 |
|
|
16,475,698 |
|
Operating lease liabilities, excluding current portion |
|
473,158 |
|
|
496,210 |
|
|
516,839 |
|
Other liabilities |
|
382,044 |
|
|
354,902 |
|
|
372,853 |
|
TOTAL LIABILITIES |
|
21,116,209 |
|
|
21,123,057 |
|
|
21,294,502 |
|
|
|
|
|
|
|
|||
|
Commitments and contingent liabilities |
|
|
|
|
|
|||
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|||
|
Common stock, |
|
77,666 |
|
|
78,806 |
|
|
79,328 |
|
Capital in excess of par value |
|
1,856,385 |
|
|
1,808,746 |
|
|
1,777,707 |
|
Accumulated other comprehensive income |
|
9,057 |
|
|
59,279 |
|
|
78,597 |
|
Retained earnings |
|
4,236,501 |
|
|
4,126,909 |
|
|
4,070,027 |
|
TOTAL SHAREHOLDERS’ EQUITY |
|
6,179,609 |
|
|
6,073,740 |
|
|
6,005,659 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
27,295,818 |
|
$ |
27,196,797 |
|
$ |
27,300,161 |
|
|
|
|
|
|
|
|||
|
|
|||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
(UNAUDITED) |
|||||||
|
|
Six Months Ended |
||||||
|
(In thousands) |
2024 |
|
2023 |
||||
|
OPERATING ACTIVITIES: |
|
|
|
||||
|
Net earnings |
$ |
285,249 |
|
|
$ |
346,933 |
|
|
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
141,964 |
|
|
|
126,971 |
|
|
Share-based compensation expense |
|
82,703 |
|
|
|
69,445 |
|
|
Provision for loan losses |
|
193,798 |
|
|
|
170,672 |
|
|
Provision for cancellation reserves |
|
49,302 |
|
|
|
45,199 |
|
|
Deferred income tax benefit |
|
(11,789 |
) |
|
|
(24,845 |
) |
|
Other |
|
2,039 |
|
|
|
3,868 |
|
|
Net (increase) decrease in: |
|
|
|
||||
|
Accounts receivable, net |
|
(6,959 |
) |
|
|
26,909 |
|
|
Inventory |
|
280,324 |
|
|
|
(113,144 |
) |
|
Other current assets |
|
111,438 |
|
|
|
33,431 |
|
|
Auto loans receivable, net |
|
(595,543 |
) |
|
|
(828,631 |
) |
|
Other assets |
|
(9,486 |
) |
|
|
(6,668 |
) |
|
Net increase (decrease) in: |
|
|
|
||||
|
Accounts payable, accrued expenses and other |
|
|
|
||||
|
current liabilities and accrued income taxes |
|
23,474 |
|
|
|
132,566 |
|
|
Other liabilities |
|
(45,100 |
) |
|
|
(43,826 |
) |
|
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
|
501,414 |
|
|
|
(61,120 |
) |
|
INVESTING ACTIVITIES: |
|
|
|
||||
|
Capital expenditures |
|
(213,123 |
) |
|
|
(210,167 |
) |
|
Proceeds from disposal of property and equipment |
|
130 |
|
|
|
1,247 |
|
|
Purchases of investments |
|
(3,091 |
) |
|
|
(3,236 |
) |
|
Sales and returns of investments |
|
621 |
|
|
|
405 |
|
|
|
|
(215,463 |
) |
|
|
(211,751 |
) |
|
FINANCING ACTIVITIES: |
|
|
|
||||
|
Proceeds from issuances of long-term debt |
|
— |
|
|
|
134,600 |
|
|
Payments on long-term debt |
|
(306,274 |
) |
|
|
(240,093 |
) |
|
Cash paid for debt issuance costs |
|
(12,985 |
) |
|
|
(10,650 |
) |
|
Payments on finance lease obligations |
|
(9,056 |
) |
|
|
(7,810 |
) |
|
Issuances of non-recourse notes payable |
|
6,971,000 |
|
|
|
6,179,929 |
|
|
Payments on non-recourse notes payable |
|
(6,742,743 |
) |
|
|
(5,532,403 |
) |
|
Repurchase and retirement of common stock |
|
(213,305 |
) |
|
|
(4,143 |
) |
|
Equity issuances |
|
30,296 |
|
|
|
27,534 |
|
|
|
|
(283,067 |
) |
|
|
546,964 |
|
|
Increase in cash, cash equivalents, and restricted cash |
|
2,884 |
|
|
|
274,093 |
|
|
Cash, cash equivalents, and restricted cash at beginning of year |
|
1,250,410 |
|
|
|
951,004 |
|
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD |
$ |
1,253,294 |
|
|
$ |
1,225,097 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240926151893/en/
Investors:
investor_relations@carmax.com, (804) 747-0422 x7865
Media:
pr@carmax.com, (855) 887-2915
Source:
