CarMax Reports First Quarter Fiscal Year 2025 Results
CarMax (NYSE:KMX) reported its Q1 FY2025 results ending May 31, 2024. The company saw retail used unit sales drop 3.1% and comparable store used unit sales decline 3.8% year-over-year. Wholesale unit sales fell by 8.3%. Despite these declines, CarMax achieved record gross profits in wholesale and Extended Protection Plans (EPP). Gross profit per retail used unit was $2,347, consistent with last year. SG&A expenses increased by 14.1% to $638.6 million. CarMax Auto Finance (CAF) income grew 7.0% to $147.0 million, and the company launched its first non-prime asset-backed securitization deal. Net earnings per diluted share decreased to $0.97 from $1.44 in the prior year, impacted by a past legal settlement. The company repurchased over $100 million in shares during the quarter and plans to expand its asset-backed securitization program.
- Gross profit per retail used unit remained steady at $2,347.
- CAF income increased by 7.0% to $147.0 million.
- The company repurchased over $100 million in shares during Q1 FY2025.
- Record gross profits in wholesale units and EPP.
- CAF launched its first non-prime asset-backed securitization deal.
- Retail used unit sales declined by 3.1%.
- Comparable store used unit sales decreased by 3.8%.
- Wholesale unit sales fell 8.3%.
- Total gross profit decreased by 3.1%.
- SG&A expenses increased by 14.1% to $638.6 million.
- Net earnings per diluted share dropped to $0.97 from $1.44.
Insights
CarMax's first-quarter results for fiscal year 2025 present a mixed outlook. On the one hand, the company reported decreases in retail used unit sales (down 3.1%) and comparable store used unit sales (down 3.8%). Wholesale unit sales also decreased by 8.3%, reflecting lower seasonal appreciation. These declines could be concerning for investors, indicating that CarMax is not immune to broader economic pressures such as inflationary pressures and higher interest rates.
However, the company's performance in terms of margins and gross profit shows resilience. CarMax achieved bgross profit per retail used unit of
The company’s expansion of its asset-backed securitization program to include non-prime segments is a strategic move to boost finance income. This could provide additional funding capacity to support future growth, especially in the non-prime credit market. This approach is likely to enhance CarMax's competitive edge in the auto finance sector.
Nevertheless, the increase in SG&A expenses by 14.1% is a point of concern. Even after excluding the prior year's legal settlement, SG&A expenses rose by 3.1%, which could pressure margins in the short term. Additionally, net earnings per diluted share dropped to
Investors should weigh these factors carefully. While CarMax shows strength in margin management and strategic finance growth, its sales declines and rising SG&A expenses require close monitoring. The overall financial health remains stable, but the company must navigate ongoing economic challenges effectively.
The data from CarMax’s first-quarter results reveal some key insights into the automotive retail market and consumer behavior. The 3.1% decrease in retail used unit sales and the 5.4% drop in total retail used vehicle revenues suggest that vehicle affordability challenges are significantly impacting sales. This is corroborated by the decrease in average retail selling price by approximately
Interestingly, CarMax managed to source a record 35,000 vehicles from dealers, a 70.8% increase from the previous year. This indicates a strategic shift to leverage dealer networks more aggressively, possibly to mitigate the volatility in direct consumer purchases. It also implies that dealers are more willing to offload inventory through CarMax, perhaps due to their own challenges in the current economic climate.
Online sales have remained stable, with 14% of retail unit sales conducted online. This consistency highlights the ongoing importance of a robust online sales platform, though it’s noteworthy that it hasn’t grown, suggesting potential saturation in the digital market or a plateau in consumer adoption rates for online car purchases.
For investors, these trends suggest a complex landscape. While CarMax is navigating the current economic environment with strategic adjustments, the broader market conditions present headwinds. The company’s ability to maintain strong profitability per unit and expand its securitization program is positive, but sustained sales declines and economic pressures are risks that need to be watched closely.
CarMax’s consistent 14% of retail unit sales through online channels and 30% of net revenues from online transactions underscore the importance of their digital platform. However, the stagnant growth in these areas suggests that CarMax might have reached a plateau in its online sales capabilities. This plateau could be due to market saturation or limitations in their current digital strategy.
To maintain competitive advantage, CarMax could benefit from enhancing their online customer experience, perhaps through more advanced AI-driven personalization and streamlined online financing options. The current digital sales ecosystem is a critical component of their strategy, but it requires continuous innovation to attract and retain tech-savvy consumers who expect seamless online transactions. Furthermore, as the auto retail sector increasingly adopts digital solutions, CarMax’s investment in cutting-edge technology can differentiate it from competitors.
The launch of their non-prime public asset-backed securitization deal also highlights the intersection of finance and technology. Efficiently managing these complex financial instruments requires robust tech infrastructure. CarMax’s ability to seamlessly integrate financial and sales data will be important for monitoring and optimizing this new initiative.
In the tech landscape, staying stagnant is not an option. CarMax must innovate continuously to stay ahead, ensuring that their digital platform not only caters to current market demands but also anticipates future trends.
Announces the expansion of its asset-backed securitization program to enable incremental growth in finance income
First Quarter Highlights:
-
Retail used unit sales decreased
3.1% and comparable store used unit sales decreased3.8% from the prior year’s first quarter; wholesale units declined8.3% from the prior year’s first quarter, impacted by lower year-over-year seasonal appreciation. -
Delivered strong margins in retail, wholesale, and Extended Protection Plans (EPP). Gross profit per retail used unit of
$2,347 $1,064 $563 -
Bought 314,000 vehicles from consumers and dealers, down
8.6% versus last year’s first quarter, impacted by lower year-over-year seasonal appreciation.-
279,000 vehicles were purchased from consumers, down
13.7% from last year’s first quarter. -
35,000 vehicles were purchased through dealers, up
70.8% from last year’s first quarter.
-
279,000 vehicles were purchased from consumers, down
-
SG&A of
$638.6 million 14.1% from last year’s first quarter. Continued cost management efforts drove a decrease in SG&A when excluding the impact of the prior year’s$59.3 million $22 million -
CarMax Auto Finance (CAF) income of
$147.0 million 7.0% from the prior year first quarter due to growth in CAF’s average managed receivables and net interest margin percentage.- In June 2024, CAF launched its inaugural non-prime public asset-backed securitization deal.
-
Net earnings per diluted share of
$0.97 $1.44 $0.28 -
Accelerated the pace of share repurchases with over
$100 million
CEO Commentary:
“I am encouraged by the trends we saw in the first quarter including continued year-over-year price declines, improvements in vehicle value stability, and ongoing growth in upper funnel demand. We delivered strong retail, wholesale, and EPP gross profit per unit, sourced a record 35,000 vehicles from dealers, continued to actively manage SG&A, and repurchased over
First Quarter Business Performance Review:
Sales. Combined retail and wholesale used vehicle unit sales were 358,817, a decline of
Total retail used vehicle unit sales decreased
Total wholesale vehicle unit sales declined
We bought 314,000 vehicles from consumers and dealers, down
Other sales and revenues increased by
Online retail sales(1) accounted for
Gross Profit. Total gross profit was
Wholesale vehicle gross profit decreased
Other gross profit increased
SG&A. Compared with the first quarter of fiscal 2024, SG&A expenses increased
Continued cost management efforts in our stores and CECs as well as in non-CAF uncollectable receivables drove an SG&A decrease year-over-year when excluding the prior year’s legal settlement and the approximately
CarMax Auto Finance.(3) CAF income increased
As of May 31, 2024, the allowance for loan losses was
CAF’s total interest margin percentage, which represents the spread between interest and fees charged to consumers and our funding costs, was
Expansion of Asset-Backed Securitization Program. Going forward, we plan to expand our current asset-backed securitization program from a single issuance to one that more broadly incorporates CAF’s receivables across distinct prime and non-prime segments. In June 2024, CAF launched its first non-prime securitization deal.
This strategy will enable us to efficiently fund incremental originations and support future CAF growth across the credit spectrum by creating additional funding capacity, driving additional finance income for the business over time. Our unique finance platform with a full-spectrum in-house lending operation coupled with a robust network of partner lenders will strengthen our competitive advantage.
Share Repurchase Activity. During the first quarter of fiscal year 2025, we repurchased 1.4 million shares of common stock for
Location Openings. During the first quarter of fiscal 2025, we opened our second stand-alone reconditioning center 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 May 31 |
||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
Change |
|
Used vehicle sales |
$ |
5,677.5 |
|
|
$ |
6,001.5 |
|
(5.4 |
)% |
Wholesale vehicle sales |
|
1,256.4 |
|
|
|
1,514.4 |
|
(17.0 |
)% |
Other sales and revenues: |
|
|
|
|
|
||||
Extended protection plan revenues |
|
118.8 |
|
|
|
111.2 |
|
6.9 |
% |
Third-party finance (fees)/income, net |
|
(1.7 |
) |
|
|
0.3 |
|
(613.8 |
)% |
Advertising & subscription revenues (1) |
|
34.7 |
|
|
|
31.4 |
|
10.5 |
% |
Other |
|
27.7 |
|
|
|
28.3 |
|
(2.5 |
)% |
Total other sales and revenues |
|
179.5 |
|
|
|
171.2 |
|
4.8 |
% |
Total net sales and operating revenues |
$ |
7,113.4 |
|
|
$ |
7,687.1 |
|
(7.5 |
)% |
(1) Excludes intercompany revenues that have been eliminated in consolidation. |
|||||||||
Unit Sales
|
Three Months Ended May 31 |
|||||
|
2024 |
|
2023 |
|
Change |
|
Used vehicles |
211,132 |
|
217,924 |
|
(3.1 |
)% |
Wholesale vehicles |
147,685 |
|
161,048 |
|
(8.3 |
)% |
Average Selling Prices
|
Three Months Ended May 31 |
|||||||
|
|
2024 |
|
|
2023 |
|
Change |
|
Used vehicles |
$ |
26,526 |
|
$ |
27,258 |
|
(2.7 |
)% |
Wholesale vehicles |
$ |
8,094 |
|
$ |
9,024 |
|
(10.3 |
)% |
Vehicle Sales Changes
|
Three Months Ended May 31 |
|||
|
2024 |
2023 |
||
Used vehicle units |
(3.1 |
)% |
(9.6 |
)% |
Used vehicle revenues |
(5.4 |
)% |
(14.4 |
)% |
|
|
|
||
Wholesale vehicle units |
(8.3 |
)% |
(13.6 |
)% |
Wholesale vehicle revenues |
(17.0 |
)% |
(28.5 |
)% |
Comparable Store Used Vehicle Sales Changes (1)
|
Three Months Ended May 31 |
|||
|
2024 |
2023 |
||
Used vehicle units |
(3.8 |
)% |
(11.4 |
)% |
Used vehicle revenues |
(6.1 |
)% |
(16.2 |
)% |
(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 May 31 |
|||
|
2024 |
2023 |
||
CAF (2) |
45.3 |
% |
45.5 |
% |
Tier 2 (3) |
18.7 |
% |
20.4 |
% |
Tier 3 (4) |
7.5 |
% |
6.7 |
% |
Other (5) |
28.5 |
% |
27.4 |
% |
Total |
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 |
(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 May 31 |
||||||
(In millions) |
|
2024 |
% (1) |
|
|
2023 |
% (1) |
Net sales and operating revenues |
$ |
7,113.4 |
100.0 |
|
$ |
7,687.1 |
100.0 |
Gross profit |
$ |
791.9 |
11.1 |
|
$ |
817.4 |
10.6 |
CarMax Auto Finance income |
$ |
147.0 |
2.1 |
|
$ |
137.4 |
1.8 |
Selling, general, and administrative expenses |
$ |
638.6 |
9.0 |
|
$ |
559.8 |
7.3 |
Interest expense |
$ |
31.4 |
0.4 |
|
$ |
30.5 |
0.4 |
Earnings before income taxes |
$ |
206.6 |
2.9 |
|
$ |
307.2 |
4.0 |
Net earnings |
$ |
152.4 |
2.1 |
|
$ |
228.3 |
3.0 |
(1) |
Calculated as a percentage of net sales and operating revenues. |
Gross Profit (1)
|
Three Months Ended May 31 |
|||||||
(In millions) |
|
2024 |
|
|
2023 |
|
Change |
|
Used vehicle gross profit |
$ |
495.5 |
|
$ |
514.6 |
|
(3.7 |
)% |
Wholesale vehicle gross profit |
|
157.1 |
|
|
167.8 |
|
(6.4 |
)% |
Other gross profit |
|
139.3 |
|
|
135.0 |
|
3.2 |
% |
Total |
$ |
791.9 |
|
$ |
817.4 |
|
(3.1 |
)% |
(1) |
Amounts are net of intercompany eliminations. |
Gross Profit per Unit (1)
|
Three Months Ended May 31 |
|||||
|
|
2024 |
|
2023 |
||
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
||
Used vehicle gross profit per unit |
$ |
2,347 |
8.7 |
$ |
2,361 |
8.6 |
Wholesale vehicle gross profit per unit |
$ |
1,064 |
12.5 |
$ |
1,042 |
11.1 |
Other gross profit per unit |
$ |
660 |
77.6 |
$ |
619 |
78.8 |
(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 May 31 |
|||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
Change |
|
Compensation and benefits: |
|
|
|
|
|
|||||
Compensation and benefits, excluding share-based compensation expense |
$ |
328.1 |
|
|
$ |
330.7 |
|
|
(0.8 |
)% |
Share-based compensation expense |
|
47.1 |
|
|
|
35.3 |
|
|
33.4 |
% |
Total compensation and benefits (2) |
$ |
375.2 |
|
|
$ |
366.0 |
|
|
2.5 |
% |
Occupancy costs |
|
70.6 |
|
|
|
66.2 |
|
|
6.7 |
% |
Advertising expense |
|
71.7 |
|
|
|
71.9 |
|
|
(0.2 |
)% |
Other overhead costs (3) |
|
121.1 |
|
|
|
55.7 |
|
|
117.0 |
% |
Total SG&A expenses |
$ |
638.6 |
|
|
$ |
559.8 |
|
|
14.1 |
% |
SG&A as a % of gross profit |
|
80.6 |
% |
|
|
68.5 |
% |
|
12.1 |
% |
(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 May 31 |
|||||||||
(In millions) |
|
2024 |
|
% (1) |
|
2023 |
|
% (1) |
||
Interest margin: |
|
|
|
|
||||||
Interest and fee income |
$ |
452.5 |
|
10.3 |
|
$ |
400.5 |
|
9.4 |
|
Interest expense |
|
(182.3 |
) |
(4.2 |
) |
|
(142.6 |
) |
(3.4 |
) |
Total interest margin |
|
270.2 |
|
6.2 |
|
|
257.9 |
|
6.1 |
|
Provision for loan losses |
|
(81.2 |
) |
(1.9 |
) |
|
(80.9 |
) |
(1.9 |
) |
Total interest margin after provision for loan losses |
|
189.0 |
|
4.3 |
|
|
177.0 |
|
4.2 |
|
Total direct expenses |
|
(42.0 |
) |
(1.0 |
) |
|
(39.6 |
) |
(0.9 |
) |
CarMax Auto Finance income |
$ |
147.0 |
|
3.3 |
|
$ |
137.4 |
|
3.2 |
|
|
|
|
|
|
||||||
Total average managed receivables |
$ |
17,551.2 |
|
|
$ |
17,003.4 |
|
|
||
Net loans originated |
$ |
2,265.7 |
|
|
$ |
2,340.4 |
|
|
||
Net penetration rate |
|
43.3 |
% |
|
|
42.7 |
% |
|
||
Weighted average contract rate |
|
11.4 |
% |
|
|
11.1 |
% |
|
||
|
|
|
|
|
||||||
Ending allowance for loan losses |
$ |
493.1 |
|
|
$ |
535.4 |
|
|
||
|
|
|
|
|
||||||
Warehouse facility information: |
|
|
|
|
||||||
Ending funded receivables |
$ |
4,176.6 |
|
|
$ |
4,241.6 |
|
|
||
Ending unused capacity |
$ |
1,923.4 |
|
|
$ |
1,358.4 |
|
|
||
|
|
|
|
|
||||||
(1) |
Annualized percentage of total average managed receivables. |
Earnings Highlights
|
Three Months Ended May 31 |
|||||||
(In millions except per share data) |
|
2024 |
|
|
2023 |
|
Change |
|
Net earnings |
$ |
152.4 |
|
$ |
228.3 |
|
(33.2 |
)% |
Diluted weighted average shares outstanding |
|
157.7 |
|
|
158.6 |
|
(0.5 |
)% |
Net earnings per diluted share |
$ |
0.97 |
|
$ |
1.44 |
|
(32.6 |
)% |
Conference Call Information
We will host a conference call for investors at 9:00 a.m. ET today, June 21, 2024. Domestic investors may access the call at 1-800-225-9448 (international callers dial 1-203-518-9708). The conference I.D. for both domestic and international callers is 3171396. A live webcast of the call will be available on our investor information home page at investors.carmax.com.
A replay of the webcast will be available on the company’s website at investors.carmax.com through September 25, 2024, or via telephone (for approximately one week) by dialing 1-800-839-5204 (or 1-402-220-2697 for international access) and entering the conference ID 3171396.
Second Quarter Fiscal 2025 Earnings Release Date
We currently plan to release results for the second quarter ending August 31, 2024, on Thursday, September 26, 2024, before the opening of trading on the New York Stock Exchange. We plan to host a conference call for investors at 9:00 a.m. ET on that date. Information on this conference call will be available on our investor information home page at investors.carmax.com in early September 2024.
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 February 29, 2024, CarMax sold approximately 770,000 used vehicles and 550,000 wholesale vehicles at its auctions. In addition, CarMax Auto Finance originated more than
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, climbing 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 February 29, 2024, and our quarterly or current reports as filed with or furnished to the
CARMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) |
|||||||
|
Three Months Ended May 31 |
||||||
(In thousands except per share data) |
|
2024 |
%(1) |
|
2023 |
|
%(1) |
SALES AND OPERATING REVENUES: |
|
|
|
|
|||
Used vehicle sales |
$ |
5,677,476 |
79.8 |
$ |
6,001,471 |
|
78.1 |
Wholesale vehicle sales |
|
1,256,439 |
17.7 |
|
1,514,363 |
|
19.7 |
Other sales and revenues |
|
179,482 |
2.5 |
|
171,229 |
|
2.2 |
NET SALES AND OPERATING REVENUES |
|
7,113,397 |
100.0 |
|
7,687,063 |
|
100.0 |
COST OF SALES: |
|
|
|
|
|||
Used vehicle cost of sales |
|
5,181,979 |
72.8 |
|
5,486,846 |
|
71.4 |
Wholesale vehicle cost of sales |
|
1,099,311 |
15.5 |
|
1,346,538 |
|
17.5 |
Other cost of sales |
|
40,212 |
0.6 |
|
36,289 |
|
0.5 |
TOTAL COST OF SALES |
|
6,321,502 |
88.9 |
|
6,869,673 |
|
89.4 |
GROSS PROFIT |
|
791,895 |
11.1 |
|
817,390 |
|
10.6 |
CARMAX AUTO FINANCE INCOME |
|
146,970 |
2.1 |
|
137,358 |
|
1.8 |
Selling, general, and administrative expenses |
|
638,578 |
9.0 |
|
559,837 |
|
7.3 |
Depreciation and amortization |
|
61,869 |
0.9 |
|
58,419 |
|
0.8 |
Interest expense |
|
31,362 |
0.4 |
|
30,466 |
|
0.4 |
Other expense (income) |
|
416 |
— |
|
(1,214 |
) |
— |
Earnings before income taxes |
|
206,640 |
2.9 |
|
307,240 |
|
4.0 |
Income tax provision |
|
54,200 |
0.8 |
|
78,942 |
|
1.0 |
NET EARNINGS |
$ |
152,440 |
2.1 |
$ |
228,298 |
|
3.0 |
WEIGHTED AVERAGE COMMON SHARES: |
|
|
|
|
|||
Basic |
|
157,161 |
|
|
158,116 |
|
|
Diluted |
|
157,706 |
|
|
158,561 |
|
|
NET EARNINGS PER SHARE: |
|
|
|
|
|||
Basic |
$ |
0.97 |
|
$ |
1.44 |
|
|
Diluted |
$ |
0.97 |
|
$ |
1.44 |
|
|
(1) |
Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding. |
CARMAX, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
|||||||||
|
|
As of |
|||||||
|
|
May 31 |
|
February 29 |
|
May 31 |
|||
(In thousands except share data) |
|
2024 |
|
|
2024 |
|
|
2023 |
|
ASSETS |
|
|
|
|
|
||||
|
CURRENT ASSETS: |
|
|
|
|
|
|||
|
Cash and cash equivalents |
$ |
218,931 |
|
$ |
574,142 |
|
$ |
264,247 |
|
Restricted cash from collections on auto loans receivable |
|
536,407 |
|
|
506,648 |
|
|
506,465 |
|
Accounts receivable, net |
|
212,370 |
|
|
221,153 |
|
|
321,994 |
|
Inventory |
|
3,772,885 |
|
|
3,678,070 |
|
|
4,081,220 |
|
Other current assets |
|
229,714 |
|
|
246,581 |
|
|
189,742 |
|
TOTAL CURRENT ASSETS |
|
4,970,307 |
|
|
5,226,594 |
|
|
5,363,668 |
|
Auto loans receivable, net |
|
17,268,321 |
|
|
17,011,844 |
|
|
16,744,865 |
|
Property and equipment, net |
|
3,734,736 |
|
|
3,665,530 |
|
|
3,499,384 |
|
Deferred income taxes |
|
100,104 |
|
|
98,790 |
|
|
99,770 |
|
Operating lease assets |
|
509,043 |
|
|
520,717 |
|
|
541,908 |
|
Goodwill |
|
141,258 |
|
|
141,258 |
|
|
141,258 |
|
Other assets |
|
518,325 |
|
|
532,064 |
|
|
571,503 |
|
TOTAL ASSETS |
$ |
27,242,094 |
|
$ |
27,196,797 |
|
$ |
26,962,356 |
|
|
|
|
|
|
|
|||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
||||
|
CURRENT LIABILITIES: |
|
|
|
|
|
|||
|
Accounts payable |
$ |
911,348 |
|
$ |
933,708 |
|
$ |
967,420 |
|
Accrued expenses and other current liabilities |
|
456,277 |
|
|
523,971 |
|
|
528,596 |
|
Accrued income taxes |
|
24,792 |
|
|
— |
|
|
49,191 |
|
Current portion of operating lease liabilities |
|
57,534 |
|
|
57,161 |
|
|
55,126 |
|
Current portion of long-term debt |
|
21,550 |
|
|
313,282 |
|
|
12,305 |
|
Current portion of non-recourse notes payable |
|
514,394 |
|
|
484,167 |
|
|
501,333 |
|
TOTAL CURRENT LIABILITIES |
|
1,985,895 |
|
|
2,312,289 |
|
|
2,113,971 |
|
Long-term debt, excluding current portion |
|
1,591,366 |
|
|
1,602,355 |
|
|
1,906,496 |
|
Non-recourse notes payable, excluding current portion |
|
16,626,011 |
|
|
16,357,301 |
|
|
16,252,958 |
|
Operating lease liabilities, excluding current portion |
|
484,632 |
|
|
496,210 |
|
|
519,184 |
|
Other liabilities |
|
387,320 |
|
|
354,902 |
|
|
346,579 |
|
TOTAL LIABILITIES |
|
21,075,224 |
|
|
21,123,057 |
|
|
21,139,188 |
|
|
|
|
|
|
|
|||
|
Commitments and contingent liabilities |
|
|
|
|
|
|||
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|||
|
Common stock, |
|
78,176 |
|
|
78,806 |
|
|
79,105 |
|
Capital in excess of par value |
|
1,834,218 |
|
|
1,808,746 |
|
|
1,731,341 |
|
Accumulated other comprehensive income |
|
61,678 |
|
|
59,279 |
|
|
61,330 |
|
Retained earnings |
|
4,192,798 |
|
|
4,126,909 |
|
|
3,951,392 |
|
TOTAL SHAREHOLDERS’ EQUITY |
|
6,166,870 |
|
|
6,073,740 |
|
|
5,823,168 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
27,242,094 |
|
$ |
27,196,797 |
|
$ |
26,962,356 |
|
|
|
|
|
|
|
|||
CARMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||||||
|
Three Months Ended May 31 |
||||||
(In thousands) |
|
2024 |
|
|
|
2023 |
|
OPERATING ACTIVITIES: |
|
|
|
||||
Net earnings |
$ |
152,440 |
|
|
$ |
228,298 |
|
Adjustments to reconcile net earnings to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
69,244 |
|
|
|
62,998 |
|
Share-based compensation expense |
|
48,098 |
|
|
|
36,384 |
|
Provision for loan losses |
|
81,226 |
|
|
|
80,890 |
|
Provision for cancellation reserves |
|
24,343 |
|
|
|
24,070 |
|
Deferred income tax benefit |
|
(2,036 |
) |
|
|
(7,127 |
) |
Other |
|
2,545 |
|
|
|
2,976 |
|
Net decrease (increase) in: |
|
|
|
||||
Accounts receivable, net |
|
8,783 |
|
|
|
(22,439 |
) |
Inventory |
|
(94,815 |
) |
|
|
(355,078 |
) |
Other current assets |
|
32,881 |
|
|
|
30,923 |
|
Auto loans receivable, net |
|
(337,703 |
) |
|
|
(483,964 |
) |
Other assets |
|
(3,797 |
) |
|
|
634 |
|
Net (decrease) increase in: |
|
|
|
||||
Accounts payable, accrued expenses and other |
|
|
|
||||
current liabilities and accrued income taxes |
|
(75,206 |
) |
|
|
239,276 |
|
Other liabilities |
|
(23,692 |
) |
|
|
(23,126 |
) |
NET CASH USED IN OPERATING ACTIVITIES |
|
(117,689 |
) |
|
|
(185,285 |
) |
INVESTING ACTIVITIES: |
|
|
|
||||
Capital expenditures |
|
(103,914 |
) |
|
|
(136,719 |
) |
Proceeds from disposal of property and equipment |
|
1 |
|
|
|
1,171 |
|
Purchases of investments |
|
(2,093 |
) |
|
|
(1,228 |
) |
Sales and returns of investments |
|
136 |
|
|
|
17 |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(105,870 |
) |
|
|
(136,759 |
) |
FINANCING ACTIVITIES: |
|
|
|
||||
Proceeds from issuances of long-term debt |
|
— |
|
|
|
98,600 |
|
Payments on long-term debt |
|
(303,080 |
) |
|
|
(201,377 |
) |
Cash paid for debt issuance costs |
|
(5,668 |
) |
|
|
(3,608 |
) |
Payments on finance lease obligations |
|
(4,548 |
) |
|
|
(3,785 |
) |
Issuances of non-recourse notes payable |
|
3,676,000 |
|
|
|
3,125,929 |
|
Payments on non-recourse notes payable |
|
(3,376,447 |
) |
|
|
(2,706,222 |
) |
Repurchase and retirement of common stock |
|
(106,850 |
) |
|
|
(3,931 |
) |
Equity issuances |
|
8,209 |
|
|
|
989 |
|
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES |
|
(112,384 |
) |
|
|
306,595 |
|
Decrease in cash, cash equivalents, and restricted cash |
|
(335,943 |
) |
|
|
(15,449 |
) |
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 |
$ |
914,467 |
|
|
$ |
935,555 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240621330191/en/
Investors:
David Lowenstein, Vice President, Investor Relations
investor_relations@carmax.com, (804) 747-0422 x7865
Media:
pr@carmax.com, (855) 887-2915
Source: CarMax, Inc.
FAQ
What were CarMax's Q1 FY2025 earnings per share?
How did CarMax's retail used unit sales perform in Q1 FY2025?
What was the change in CarMax's SG&A expenses in Q1 FY2025?
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What was CarMax's gross profit per retail used unit in Q1 FY2025?
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What strategic financial move did CarMax's CAF launch in Q1 FY2025?
What was CarMax's total gross profit in Q1 FY2025?
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What was the impact of CarMax's legal settlement in Q1 FY2025?
