CarMax Reports Fourth Quarter and Fiscal Year 2024 Results
- Retail used unit sales increased by 1.3% in Q4, with comparable store used unit sales up by 0.1% from the previous year.
- Wholesale unit sales declined by 4.0% in the fourth quarter compared to the prior year.
- SG&A expenses increased by 1.4% to $580.9 million in Q4 due to higher share-based compensation and marketing spend.
- CarMax Auto Finance (CAF) income grew by 18.9% to $147.3 million in the fourth quarter.
- CEO Bill Nash emphasized the company's progress in enhancing the omni-channel experience and leveraging data science for operational efficiencies.
- Net revenues decreased by 1.7% YoY in the fourth quarter.
- Gross profit was down by 4.1% compared to the previous year's fourth quarter.
- Total wholesale revenues decreased by 5.5% due to lower wholesale units sold and selling prices.
- Total other sales and revenues declined by 3.7% in Q4.
- SG&A expenses as a percentage of gross profit levered by 4.5 percentage points in fiscal year 2024.
Insights
The recent fiscal report from CarMax, Inc. reflects a mixed performance with a slight downturn in net revenues by 1.7%, while managing a modest increase in retail used unit sales by 1.3%. The decline in wholesale units sold by 4.0% and the decrease in vehicles purchased from consumers by 14.1% highlight a challenging market environment. The automotive retail industry is currently facing headwinds from inflationary pressures, higher interest rates and tightened lending standards, which can affect consumer affordability and confidence.
Despite these challenges, CarMax's strategic focus on cost management and operational efficiencies, such as the use of data science, automation and AI, has helped maintain solid margins in both retail and wholesale. This indicates a resilient business model capable of withstanding market volatility. Furthermore, the growth in CarMax Auto Finance income by 18.9% suggests that the company's finance arm is successfully navigating the tighter lending landscape, which is a positive sign for investor confidence in the company's risk management practices.
CarMax's report highlights an 18.9% year-over-year growth in CarMax Auto Finance income, attributable to a lower provision for loan losses and an increase in average managed receivables. This is a significant development as it indicates a healthier finance portfolio and effective credit risk management. The consistent net interest margin percentage of 5.9% demonstrates stability in CarMax's financing operations despite market challenges.
Investors should note the share repurchase activity, with 685,600 shares bought back for $49.3 million, signaling confidence by management in the intrinsic value of the company. The remaining $2.36 billion available for repurchases suggests an ongoing commitment to shareholder value. However, the decrease in net earnings per diluted share from $0.44 to $0.32 year-over-year, partly attributed to a normalization of the tax rate, may raise concerns about profitability growth. The long-term targets and capital expenditure plans for fiscal 2025 indicate a strategic investment in growth, yet they also represent significant cash outflows that need to be monitored.
CarMax's performance must be contextualized within the broader economic environment characterized by inflation and interest rate hikes. The company's ability to maintain a slight growth in retail used unit sales amidst these conditions is noteworthy, as it suggests resilience in consumer demand for used vehicles. However, the decline in wholesale vehicle sales and the decrease in average selling prices for both retail and wholesale vehicles reflect the price sensitivity of consumers in the current economic climate.
The increase in SG&A expenses by 1.4% indicates a controlled rise in operational costs, but this needs to be watched closely in subsequent quarters for signs of cost inflation. The company's plans for expansion with new store openings and a second stand-alone reconditioning center imply a long-term strategic vision aimed at capturing future market growth. The maintenance of gross profit margins in the face of a challenging economic landscape is commendable and indicates strong operational discipline.
Fourth Quarter Highlights:
-
Net revenues were
$5.6 billion 1.7% compared with the prior year fourth quarter. -
Retail used unit sales increased
1.3% and comparable store used unit sales increased0.1% from the prior year’s fourth quarter; wholesale units declined4.0% from the prior year’s fourth quarter. -
Delivered solid margins in retail and wholesale; gross profit per retail used unit of
$2,251 $1,120 -
Bought 234,000 vehicles from consumers and dealers, down
10.8% versus last year’s fourth quarter, which benefited from strong appreciation.-
213,000 of these vehicles were purchased from consumers, down
14.1% over last year’s fourth quarter. -
21,000 of these vehicles were purchased through dealers, up
44.8% from last year’s fourth quarter.
-
213,000 of these vehicles were purchased from consumers, down
-
SG&A of
$580.9 million 1.4% or$8.0 million -
CarMax Auto Finance (CAF) income of
$147.3 million 18.9% from the prior year fourth quarter due to a lower provision for loan losses, reflecting tightened lending standards, and an increase in average managed receivables, partially offset by compression in the net interest margin percentage (NIM). NIM of5.9% was consistent with this year’s third quarter. -
Net earnings per diluted share of
$0.32 $0.44 $0.08 $16.0 million $0.04 16.5% tax rate compared to a more normalized23.3% tax rate this year.
CEO Commentary:
“We are encouraged by the performance of our business during the fourth quarter. We reported growth in total used unit sales and comps, delivered strong retail and wholesale gross profit per unit, continued to actively manage SG&A and grew CAF income significantly year-over-year,” said Bill Nash, president and chief executive officer. “During fiscal 2024, we enhanced our omni-channel experience and capabilities by making it even easier for consumers and dealers to transact, and we leveraged data science, automation and AI to drive operating efficiencies across our stores, CECs and corporate office. Our focus and progress have made our foundation stronger than ever and we are positioned well for the future.”
Fourth Quarter Business Performance Review:
Sales. Combined retail and wholesale used vehicle unit sales were 287,603, a decline of
Total retail used vehicle unit sales increased
Total wholesale vehicle unit sales declined
We bought 234,000 vehicles from consumers and dealers, down
Other sales and revenues declined by
Online retail sales(1) accounted for
Gross Profit. Total gross profit was
Wholesale vehicle gross profit decreased
Other gross profit declined
SG&A. Compared with the fourth quarter of fiscal 2023, SG&A expenses increased
For fiscal year 2024, SG&A as a percent of gross profit levered by 4.5 percentage points to
CarMax Auto Finance.(3) CAF income increased
As of February 29, 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
Share Repurchase Activity. During the fourth quarter of fiscal year 2024, we repurchased 685,600 shares of common stock for
Location Openings. During the fourth quarter of fiscal year 2024, we opened four stores including two in the
Fiscal 2025 Capital Spending Plan. For fiscal 2025, we are planning new store growth of five locations, as well as our second stand-alone reconditioning center and one stand-alone auction facility. We expect capital expenditures between
Long-Term Targets. In regard to our long-term financial targets: (i) We are maintaining our goal to sell more than 2 million combined retail and wholesale units annually. However, we are extending the timeframe to between fiscal year 2026 and fiscal year 2030 due to uncertainty in the timing of market recovery and as we continue to focus on profitable market share growth. We intend to update the timeframe to achieve this goal when we have greater visibility into the industry’s pace of recovery; (ii) Given higher average selling prices, we expect to achieve the
(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 February 29 or 28 |
|
Years Ended February 29 or 28 |
|||||||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
|
2023 |
|
Change |
||
Used vehicle sales |
$ |
4,497.6 |
|
|
$ |
4,531.1 |
|
|
(0.7 |
)% |
|
$ |
20,922.3 |
|
|
$ |
23,034.3 |
|
(9.2 |
)% |
Wholesale vehicle sales |
|
974.3 |
|
|
|
1,030.7 |
|
|
(5.5 |
)% |
|
|
4,975.8 |
|
|
|
5,989.8 |
|
(16.9 |
)% |
Other sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Extended protection plan revenues |
|
98.0 |
|
|
|
104.2 |
|
|
(5.9 |
)% |
|
|
401.8 |
|
|
|
422.3 |
|
(4.9 |
)% |
Third-party finance (fees)/income, net |
|
(3.5 |
) |
|
|
(0.1 |
) |
|
(3,255.3 |
)% |
|
|
(5.8 |
) |
|
|
7.0 |
|
(183.6 |
)% |
Advertising & subscription revenues (1) |
|
34.2 |
|
|
|
31.3 |
|
|
9.1 |
% |
|
|
135.8 |
|
|
|
133.3 |
|
1.9 |
% |
Other |
|
26.1 |
|
|
|
25.2 |
|
|
3.3 |
% |
|
|
106.2 |
|
|
|
98.2 |
|
8.1 |
% |
Total other sales and revenues |
|
154.8 |
|
|
|
160.6 |
|
|
(3.7 |
)% |
|
|
638.0 |
|
|
|
660.8 |
|
(3.5 |
)% |
Total net sales and operating revenues |
$ |
5,626.6 |
|
|
$ |
5,722.5 |
|
|
(1.7 |
)% |
|
$ |
26,536.0 |
|
|
$ |
29,684.9 |
|
(10.6 |
)% |
(1) Excludes intersegment revenues that have been eliminated in consolidation. |
||||||||||||||||||||
Unit Sales
|
Three Months Ended February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||||||
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
||
Used vehicles |
172,057 |
|
169,884 |
|
1.3 |
% |
|
765,572 |
|
807,823 |
|
(5.2 |
)% |
Wholesale vehicles |
115,546 |
|
120,330 |
|
(4.0 |
)% |
|
546,331 |
|
585,071 |
|
(6.6 |
)% |
Average Selling Prices
|
Three Months Ended February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||||||||||
|
|
2024 |
|
|
2023 |
|
Change |
|
|
2024 |
|
|
2023 |
|
Change |
||
Used vehicles |
$ |
25,985 |
|
$ |
26,598 |
|
(2.3 |
)% |
|
$ |
27,028 |
|
$ |
28,251 |
|
(4.3 |
)% |
Wholesale vehicles |
$ |
8,034 |
|
$ |
8,297 |
|
(3.2 |
)% |
|
$ |
8,707 |
|
$ |
9,872 |
|
(11.8 |
)% |
Vehicle Sales Changes
|
Three Months Ended February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||
|
2024 |
2023 |
|
2024 |
2023 |
||||
Used vehicle units |
1.3 |
% |
(12.6 |
)% |
|
(5.2 |
)% |
(12.6 |
)% |
Used vehicle revenues |
(0.7 |
)% |
(21.1 |
)% |
|
(9.2 |
)% |
(5.7 |
)% |
|
|
|
|
|
|
||||
Wholesale vehicle units |
(4.0 |
)% |
(19.3 |
)% |
|
(6.6 |
)% |
(17.2 |
)% |
Wholesale vehicle revenues |
(5.5 |
)% |
(41.6 |
)% |
|
(16.9 |
)% |
(11.4 |
)% |
Comparable Store Used Vehicle Sales Changes (1)
|
Three Months Ended February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||
|
2024 |
2023 |
|
2024 |
2023 |
||||
Used vehicle units |
0.1 |
% |
(14.1 |
)% |
|
(6.7 |
)% |
(14.3 |
)% |
Used vehicle revenues |
(2.0 |
)% |
(22.0 |
)% |
|
(10.6 |
)% |
(7.6 |
)% |
(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 February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||
|
2024 |
2023 |
|
2024 |
2023 |
||||
CAF (2) |
44.8 |
% |
47.4 |
% |
|
45.8 |
% |
45.4 |
% |
Tier 2 (3) |
18.7 |
% |
19.4 |
% |
|
18.9 |
% |
22.0 |
% |
Tier 3 (4) |
8.2 |
% |
6.9 |
% |
|
7.0 |
% |
6.5 |
% |
Other (5) |
28.3 |
% |
26.3 |
% |
|
28.3 |
% |
26.1 |
% |
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 less than |
|||||||||
(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 February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||||||||
(In millions) |
|
2024 |
% (1) |
|
|
2023 |
% (1) |
|
|
2024 |
% (1) |
|
|
2023 |
% (1) |
Net sales and operating revenues |
$ |
5,626.6 |
100.0 |
|
$ |
5,722.5 |
100.0 |
|
$ |
26,536.0 |
100.0 |
|
$ |
29,684.9 |
100.0 |
Gross profit |
$ |
586.2 |
10.4 |
|
$ |
611.0 |
10.7 |
|
$ |
2,713.2 |
10.2 |
|
$ |
2,800.2 |
9.4 |
CarMax Auto Finance income |
$ |
147.3 |
2.6 |
|
$ |
123.9 |
2.2 |
|
$ |
568.3 |
2.1 |
|
$ |
663.4 |
2.2 |
Selling, general, and administrative expenses |
$ |
580.9 |
10.3 |
|
$ |
572.8 |
10.0 |
|
$ |
2,286.4 |
8.6 |
|
$ |
2,487.4 |
8.4 |
Interest expense |
$ |
31.4 |
0.6 |
|
$ |
28.7 |
0.5 |
|
$ |
124.8 |
0.5 |
|
$ |
120.4 |
0.4 |
Earnings before income taxes |
$ |
65.5 |
1.2 |
|
$ |
82.6 |
1.4 |
|
$ |
641.6 |
2.4 |
|
$ |
636.8 |
2.1 |
Net earnings |
$ |
50.3 |
0.9 |
|
$ |
69.0 |
1.2 |
|
$ |
479.2 |
1.8 |
|
$ |
484.8 |
1.6 |
(1) Calculated as a percentage of net sales and operating revenues. |
|||||||||||||||
Gross Profit (1)
|
Three Months Ended February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||||||||||
(In millions) |
|
2024 |
|
|
2023 |
|
Change |
|
|
2024 |
|
|
2023 |
|
Change |
||
Used vehicle gross profit |
$ |
387.3 |
|
$ |
386.9 |
|
0.1 |
% |
|
$ |
1,752.0 |
|
$ |
1,848.2 |
|
(5.2 |
)% |
Wholesale vehicle gross profit |
|
129.4 |
|
|
142.8 |
|
(9.4 |
)% |
|
|
556.8 |
|
|
589.8 |
|
(5.6 |
)% |
Other gross profit |
|
69.5 |
|
|
81.3 |
|
(14.5 |
)% |
|
|
404.4 |
|
|
362.2 |
|
11.7 |
% |
Total |
$ |
586.2 |
|
$ |
611.0 |
|
(4.1 |
)% |
|
$ |
2,713.2 |
|
$ |
2,800.2 |
|
(3.1 |
)% |
(1) Amounts are net of intercompany eliminations. |
|||||||||||||||||
Gross Profit per Unit (1)
|
Three Months Ended February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||||||
|
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 |
$ |
2,251 |
8.6 |
$ |
2,277 |
8.5 |
|
$ |
2,288 |
8.4 |
$ |
2,288 |
8.0 |
Wholesale vehicle gross profit per unit |
$ |
1,120 |
13.3 |
$ |
1,187 |
13.9 |
|
$ |
1,019 |
11.2 |
$ |
1,008 |
9.8 |
Other gross profit per unit |
$ |
404 |
44.9 |
$ |
478 |
50.6 |
|
$ |
528 |
63.4 |
$ |
448 |
54.8 |
(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 February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||||||||||||||
(In millions) |
|
2024 |
|
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
|
2023 |
|
|
Change |
||
Compensation and benefits: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits, excluding share-based compensation expense |
$ |
304.1 |
|
|
$ |
297.3 |
|
|
2.3 |
% |
|
$ |
1,226.8 |
|
|
$ |
1,282.4 |
|
|
(4.3 |
)% |
Share-based compensation expense |
|
27.6 |
|
|
|
19.6 |
|
|
40.4 |
% |
|
|
114.1 |
|
|
|
83.6 |
|
|
36.4 |
% |
Total compensation and benefits (2) |
$ |
331.7 |
|
|
$ |
316.9 |
|
|
4.7 |
% |
|
$ |
1,340.9 |
|
|
$ |
1,366.0 |
|
|
(1.8 |
)% |
Occupancy costs |
|
67.3 |
|
|
|
62.5 |
|
|
7.5 |
% |
|
|
271.4 |
|
|
|
267.3 |
|
|
1.5 |
% |
Advertising expense |
|
62.8 |
|
|
|
58.0 |
|
|
8.3 |
% |
|
|
264.4 |
|
|
|
288.5 |
|
|
(8.4 |
)% |
Other overhead costs (3) |
|
119.1 |
|
|
|
135.4 |
|
|
(12.0 |
)% |
|
|
409.7 |
|
|
|
565.6 |
|
|
(27.6 |
)% |
Total SG&A expenses |
$ |
580.9 |
|
|
$ |
572.8 |
|
|
1.4 |
% |
|
$ |
2,286.4 |
|
|
$ |
2,487.4 |
|
|
(8.1 |
)% |
SG&A as a % of gross profit |
|
99.1 |
% |
|
|
93.8 |
% |
|
5.3 |
% |
|
|
84.3 |
% |
|
|
88.8 |
% |
|
(4.5 |
)% |
(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
|
|
Years Ended February 29 or 28 |
||||||||||||||||||
(In millions) |
|
2024 |
|
% (1) |
|
2023 |
|
% (1) |
|
|
2024 |
|
% (1) |
|
2023 |
|
% (1) |
||||
Interest margin: |
|
|
|
|
|
|
|
|
|
||||||||||||
Interest and fee income |
$ |
433.1 |
|
9.9 |
|
$ |
372.2 |
|
8.9 |
|
|
$ |
1,677.4 |
|
9.7 |
|
$ |
1,441.5 |
|
8.8 |
|
Interest expense |
|
(173.9 |
) |
(4.0 |
) |
|
(110.2 |
) |
(2.6 |
) |
|
|
(638.7 |
) |
(3.7 |
) |
|
(310.3 |
) |
(1.9 |
) |
Total interest margin |
|
259.2 |
|
5.9 |
|
|
262.0 |
|
6.3 |
|
|
|
1,038.7 |
|
6.0 |
|
|
1,131.2 |
|
6.9 |
|
Provision for loan losses |
|
(71.6 |
) |
(1.6 |
) |
|
(98.0 |
) |
(2.4 |
) |
|
|
(310.5 |
) |
(1.8 |
) |
|
(317.0 |
) |
(1.9 |
) |
Total interest margin after provision for loan losses |
|
187.6 |
|
4.3 |
|
|
164.0 |
|
3.9 |
|
|
|
728.2 |
|
4.2 |
|
|
814.2 |
|
5.0 |
|
Total direct expenses |
|
(40.3 |
) |
(0.9 |
) |
|
(40.1 |
) |
(1.0 |
) |
|
|
(159.9 |
) |
(0.9 |
) |
|
(150.8 |
) |
(0.9 |
) |
CarMax Auto Finance income |
$ |
147.3 |
|
3.4 |
|
$ |
123.9 |
|
3.0 |
|
|
$ |
568.3 |
|
3.3 |
|
$ |
663.4 |
|
4.1 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total average managed receivables |
$ |
17,424.9 |
|
|
$ |
16,683.5 |
|
|
|
$ |
17,313.2 |
|
|
$ |
16,304.3 |
|
|
||||
Net loans originated |
$ |
1,779.0 |
|
|
$ |
1,904.7 |
|
|
|
$ |
8,270.0 |
|
|
$ |
8,832.7 |
|
|
||||
Net penetration rate |
|
42.3 |
% |
|
|
44.7 |
% |
|
|
|
42.9 |
% |
|
|
42.1 |
% |
|
||||
Weighted average contract rate |
|
11.5 |
% |
|
|
10.9 |
% |
|
|
|
11.2 |
% |
|
|
9.7 |
% |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ending allowance for loan losses |
$ |
482.8 |
|
|
$ |
507.2 |
|
|
|
$ |
482.8 |
|
|
$ |
507.2 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Warehouse facility information: |
|
|
|
|
|
|
|
|
|
||||||||||||
Ending funded receivables |
$ |
3,744.6 |
|
|
$ |
3,649.9 |
|
|
|
$ |
3,744.6 |
|
|
$ |
3,649.9 |
|
|
||||
Ending unused capacity |
$ |
2,055.4 |
|
|
$ |
1,950.1 |
|
|
|
$ |
2,055.4 |
|
|
$ |
1,950.1 |
|
|
||||
|
|||||||||||||||||||||
(1) Annualized percentage of total average managed receivables. |
|||||||||||||||||||||
Earnings Highlights
|
Three Months Ended February 29 or 28 |
|
Years Ended February 29 or 28 |
||||||||||||||
(In millions except per share data) |
|
2024 |
|
|
2023 |
|
Change |
|
|
2024 |
|
|
2023 |
|
Change |
||
Net earnings |
$ |
50.3 |
|
$ |
69.0 |
|
(27.2 |
)% |
|
$ |
479.2 |
|
$ |
484.8 |
|
(1.1 |
)% |
Diluted weighted average shares outstanding |
|
158.2 |
|
|
158.5 |
|
(0.1 |
)% |
|
|
158.7 |
|
|
159.8 |
|
(0.7 |
)% |
Net earnings per diluted share |
$ |
0.32 |
|
$ |
0.44 |
|
(27.3 |
)% |
|
$ |
3.02 |
|
$ |
3.03 |
|
(0.3 |
)% |
Conference Call Information
We will host a conference call for investors at 9:00 a.m. ET today, April 11, 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 June 20, 2024, or via telephone (for approximately one week) by dialing 1-800-925-9348 (or 1-402-220-5381 for international access) and entering the conference ID 3171396.
First Quarter Fiscal 2025 Earnings Release Date
We currently plan to release results for the first quarter ending May 31, 2024, on Friday, June 21, 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 June 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,” “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 28, 2023, 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 February 29 or 28 |
|
Years Ended February 29 or 28 |
|||||||||||||||||||
(In thousands except per share data) |
|
2024 |
|
%(1) |
|
2023 |
|
%(1) |
|
|
2024 |
|
|
%(1) |
|
|
2023 |
|
|
%(1) |
||
SALES AND OPERATING REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Used vehicle sales |
$ |
4,497,588 |
|
79.9 |
|
$ |
4,531,127 |
|
79.2 |
|
|
$ |
20,922,279 |
|
|
78.8 |
|
$ |
23,034,286 |
|
|
77.6 |
Wholesale vehicle sales |
|
974,260 |
|
17.3 |
|
|
1,030,746 |
|
18.0 |
|
|
|
4,975,802 |
|
|
18.8 |
|
|
5,989,796 |
|
|
20.2 |
Other sales and revenues |
|
154,755 |
|
2.8 |
|
|
160,620 |
|
2.8 |
|
|
|
637,959 |
|
|
2.4 |
|
|
660,791 |
|
|
2.2 |
NET SALES AND OPERATING REVENUES |
|
5,626,603 |
|
100.0 |
|
|
5,722,493 |
|
100.0 |
|
|
|
26,536,040 |
|
|
100.0 |
|
|
29,684,873 |
|
|
100.0 |
COST OF SALES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Used vehicle cost of sales |
|
4,110,275 |
|
73.1 |
|
|
4,144,237 |
|
72.4 |
|
|
|
19,170,320 |
|
|
72.2 |
|
|
21,186,135 |
|
|
71.4 |
Wholesale vehicle cost of sales |
|
844,844 |
|
15.0 |
|
|
887,916 |
|
15.5 |
|
|
|
4,419,044 |
|
|
16.7 |
|
|
5,399,969 |
|
|
18.2 |
Other cost of sales |
|
85,293 |
|
1.5 |
|
|
79,361 |
|
1.4 |
|
|
|
233,467 |
|
|
0.9 |
|
|
298,566 |
|
|
1.0 |
TOTAL COST OF SALES |
|
5,040,412 |
|
89.6 |
|
|
5,111,514 |
|
89.3 |
|
|
|
23,822,831 |
|
|
89.8 |
|
|
26,884,670 |
|
|
90.6 |
GROSS PROFIT |
|
586,191 |
|
10.4 |
|
|
610,979 |
|
10.7 |
|
|
|
2,713,209 |
|
|
10.2 |
|
|
2,800,203 |
|
|
9.4 |
CARMAX AUTO FINANCE INCOME |
|
147,267 |
|
2.6 |
|
|
123,866 |
|
2.2 |
|
|
|
568,271 |
|
|
2.1 |
|
|
663,404 |
|
|
2.2 |
Selling, general, and administrative expenses |
|
580,885 |
|
10.3 |
|
|
572,849 |
|
10.0 |
|
|
|
2,286,378 |
|
|
8.6 |
|
|
2,487,357 |
|
|
8.4 |
Depreciation and amortization |
|
61,169 |
|
1.1 |
|
|
57,732 |
|
1.0 |
|
|
|
239,028 |
|
|
0.9 |
|
|
228,449 |
|
|
0.8 |
Interest expense |
|
31,434 |
|
0.6 |
|
|
28,728 |
|
0.5 |
|
|
|
124,750 |
|
|
0.5 |
|
|
120,398 |
|
|
0.4 |
Other income |
|
(5,541 |
) |
(0.1 |
) |
|
(7,098 |
) |
(0.1 |
) |
|
|
(10,271 |
) |
|
— |
|
|
(9,401 |
) |
|
— |
Earnings before income taxes |
|
65,511 |
|
1.2 |
|
|
82,634 |
|
1.4 |
|
|
|
641,595 |
|
|
2.4 |
|
|
636,804 |
|
|
2.1 |
Income tax provision |
|
15,243 |
|
0.3 |
|
|
13,622 |
|
0.2 |
|
|
|
162,391 |
|
|
0.6 |
|
|
152,042 |
|
|
0.5 |
NET EARNINGS |
$ |
50,268 |
|
0.9 |
|
$ |
69,012 |
|
1.2 |
|
|
$ |
479,204 |
|
|
1.8 |
|
$ |
484,762 |
|
|
1.6 |
WEIGHTED AVERAGE COMMON SHARES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
157,821 |
|
|
|
158,032 |
|
|
|
|
158,216 |
|
|
|
|
|
158,800 |
|
|
|
||
Diluted |
|
158,228 |
|
|
|
158,465 |
|
|
|
|
158,707 |
|
|
|
|
|
159,771 |
|
|
|
||
NET EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
$ |
0.32 |
|
|
$ |
0.44 |
|
|
|
$ |
3.03 |
|
|
|
|
$ |
3.05 |
|
|
|
||
Diluted |
$ |
0.32 |
|
|
$ |
0.44 |
|
|
|
$ |
3.02 |
|
|
|
|
$ |
3.03 |
|
|
|
||
(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 |
||||
|
|
February 29 |
|
February 28 |
||
(In thousands except share data) |
2024 |
|
2023 |
|||
ASSETS |
|
|
|
|||
|
CURRENT ASSETS: |
|
|
|
||
|
Cash and cash equivalents |
$ |
574,142 |
|
$ |
314,758 |
|
Restricted cash from collections on auto loans receivable |
|
506,648 |
|
|
470,889 |
|
Accounts receivable, net |
|
221,153 |
|
|
298,783 |
|
Inventory |
|
3,678,070 |
|
|
3,726,142 |
|
Other current assets |
|
246,581 |
|
|
230,795 |
|
TOTAL CURRENT ASSETS |
|
5,226,594 |
|
|
5,041,367 |
|
Auto loans receivable, net |
|
17,011,844 |
|
|
16,341,791 |
|
Property and equipment, net |
|
3,665,530 |
|
|
3,430,914 |
|
Deferred income taxes |
|
98,790 |
|
|
80,740 |
|
Operating lease assets |
|
520,717 |
|
|
545,677 |
|
Goodwill |
|
141,258 |
|
|
141,258 |
|
Other assets |
|
532,064 |
|
|
600,989 |
|
TOTAL ASSETS |
$ |
27,196,797 |
|
$ |
26,182,736 |
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|||
|
CURRENT LIABILITIES: |
|
|
|
||
|
Accounts payable |
$ |
933,708 |
|
$ |
826,592 |
|
Accrued expenses and other current liabilities |
|
523,971 |
|
|
478,964 |
|
Current portion of operating lease liabilities |
|
57,161 |
|
|
53,287 |
|
Current portion of long-term debt |
|
313,282 |
|
|
111,859 |
|
Current portion of non-recourse notes payable |
|
484,167 |
|
|
467,609 |
|
TOTAL CURRENT LIABILITIES |
|
2,312,289 |
|
|
1,938,311 |
|
Long-term debt, excluding current portion |
|
1,602,355 |
|
|
1,909,361 |
|
Non-recourse notes payable, excluding current portion |
|
16,357,301 |
|
|
15,865,776 |
|
Operating lease liabilities, excluding current portion |
|
496,210 |
|
|
523,828 |
|
Other liabilities |
|
354,902 |
|
|
332,383 |
|
TOTAL LIABILITIES |
|
21,123,057 |
|
|
20,569,659 |
|
|
|
|
|
||
|
Commitments and contingent liabilities |
|
|
|
||
|
SHAREHOLDERS’ EQUITY: |
|
|
|
||
|
Common stock, |
|
78,806 |
|
|
79,040 |
|
Capital in excess of par value |
|
1,808,746 |
|
|
1,713,074 |
|
Accumulated other comprehensive income |
|
59,279 |
|
|
97,869 |
|
Retained earnings |
|
4,126,909 |
|
|
3,723,094 |
|
TOTAL SHAREHOLDERS’ EQUITY |
|
6,073,740 |
|
|
5,613,077 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
27,196,797 |
|
$ |
26,182,736 |
|
|
|
|
|
||
CARMAX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||||||
|
Years Ended February 29 or 28 |
||||||
(In thousands) |
|
2024 |
|
|
|
2023 |
|
OPERATING ACTIVITIES: |
|
|
|
||||
Net earnings |
$ |
479,204 |
|
|
$ |
484,762 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
260,414 |
|
|
|
265,224 |
|
Share-based compensation expense |
|
119,720 |
|
|
|
85,592 |
|
Provision for loan losses |
|
310,516 |
|
|
|
317,013 |
|
Provision for cancellation reserves |
|
80,311 |
|
|
|
98,137 |
|
Deferred income tax benefit |
|
(4,800 |
) |
|
|
(6,550 |
) |
Other |
|
9,252 |
|
|
|
4,773 |
|
Net decrease (increase) in: |
|
|
|
||||
Accounts receivable, net |
|
77,630 |
|
|
|
262,201 |
|
Inventory |
|
48,072 |
|
|
|
1,398,427 |
|
Other current assets |
|
39,939 |
|
|
|
103,222 |
|
Auto loans receivable, net |
|
(980,569 |
) |
|
|
(1,369,103 |
) |
Other assets |
|
(13,902 |
) |
|
|
(52,286 |
) |
Net increase (decrease) in: |
|
|
|
||||
Accounts payable, accrued expenses and other |
|
|
|
||||
current liabilities and accrued income taxes |
|
118,511 |
|
|
|
(197,687 |
) |
Other liabilities |
|
(85,681 |
) |
|
|
(110,393 |
) |
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
458,617 |
|
|
|
1,283,332 |
|
INVESTING ACTIVITIES: |
|
|
|
||||
Capital expenditures |
|
(465,307 |
) |
|
|
(422,710 |
) |
Proceeds from disposal of property and equipment |
|
1,351 |
|
|
|
5,190 |
|
Purchases of investments |
|
(6,193 |
) |
|
|
(12,526 |
) |
Sales and returns of investments |
|
3,151 |
|
|
|
4,280 |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(466,998 |
) |
|
|
(425,766 |
) |
FINANCING ACTIVITIES: |
|
|
|
||||
Proceeds from issuances of long-term debt |
|
134,600 |
|
|
|
3,020,700 |
|
Payments on long-term debt |
|
(246,067 |
) |
|
|
(4,275,353 |
) |
Cash paid for debt issuance costs |
|
(21,633 |
) |
|
|
(19,781 |
) |
Payments on finance lease obligations |
|
(16,674 |
) |
|
|
(12,200 |
) |
Issuances of non-recourse notes payable |
|
12,380,050 |
|
|
|
14,333,896 |
|
Payments on non-recourse notes payable |
|
(11,873,169 |
) |
|
|
(13,440,603 |
) |
Repurchase and retirement of common stock |
|
(94,086 |
) |
|
|
(333,932 |
) |
Equity issuances |
|
44,766 |
|
|
|
17,093 |
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
|
307,787 |
|
|
|
(710,180 |
) |
Increase in cash, cash equivalents, and restricted cash |
|
299,406 |
|
|
|
147,386 |
|
Cash, cash equivalents, and restricted cash at beginning of year |
|
951,004 |
|
|
|
803,618 |
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF YEAR |
$ |
1,250,410 |
|
|
$ |
951,004 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240411798800/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 was CarMax's net revenue in the fourth quarter of fiscal year 2024?
How did retail used unit sales perform in the fourth quarter?
What was the change in wholesale unit sales in the fourth quarter compared to the prior year?
How did CarMax Auto Finance (CAF) income change in the fourth quarter compared to the prior year?
Who is the CEO of CarMax?
