CarMax Reports Second Quarter Fiscal 2022 Results
CarMax reported a record net revenue of $8.0 billion for Q2 2021, a 48.7% increase year-over-year. Total vehicle sales reached 419,895 units, up 19.9%, supported by strong demand for used cars. Retail used unit sales rose 6.7% to 231,797 vehicles, while wholesale sales surged 41.4% to 188,098 units. Despite these gains, diluted earnings per share declined to $1.72 from $1.79, attributed to last year's COVID savings. The company is on track to enhance its online customer experience and maintains a strong share repurchase program.
- Record net revenues of $8.0 billion, up 48.7% year-over-year.
- Total vehicle sales increased 19.9% to 419,895 units.
- Retail used unit sales rose 6.7% to a record of 231,797 vehicles.
- Wholesale vehicle unit sales increased 41.4% to an all-time high of 188,098 units.
- CarMax Auto Finance income increased 35.9% to $200 million.
- Earnings per diluted share decreased to $1.72 from $1.79 due to prior COVID-related cost savings.
- Gross profit per retail used unit slightly fell to $2,185 from $2,214.
- SG&A expenses increased 30% to $574.3 million, raising SG&A as a percentage of gross profit to 70.4%.
Highlights:
-
Record net revenues of
$8.0 billion 48.7% compared with the prior year second quarter.
-
Sold 419,895 units through our retail and wholesale channels combined, up
19.9% from the prior year quarter, primarily driven by strong demand for used autos and solid execution supported by our omni-channel experience.-
Retail used unit sales increased
6.7% to a second quarter record of 231,797 vehicles and comparable store unit sales increased6.2% compared with the same quarter a year ago. -
Wholesale units increased
41.4% to 188,098 vehicles from the prior year second quarter, an all-time high quarterly record.
-
Retail used unit sales increased
-
Bought 364,263 vehicles from consumers in the second quarter, a
59% increase versus the prior year quarter. Approximately 188,000 vehicles bought in the quarter were purchased from consumers through our nationwide online instant appraisal offerings.
-
Gross profit per retail used unit was
$2,185 $1,005 $81
-
CarMax Auto Finance (CAF) income increased
35.9% to$200.0 million
-
Net earnings per diluted share of
$1.72 $1.79
CEO Commentary:
“Our omni-channel platform, in combination with our unique customer offerings, industry expertise and solid execution, drove performance across our diversified business and led to a record level of used sales for the second quarter and an all-time record for wholesale vehicle sales” said
“Of particular note is the performance of our online instant appraisal offering, which continues to exceed our expectations. Just six months after the nationwide launch, we have already purchased over 350,000 cars from consumers online with this digital product,” Nash continued. “We continue to make investments in growth and innovation for our customers’ benefit and remain on track to bring our fully self-service online experience to all of our retail consumers by the end of the fiscal year.”
Nash concluded, “We’ve intentionally built our omni-channel platform to give every customer the ability to progress to a sale or buy regardless of how they shop with us, which will enable sustainable growth and create meaningful long-term shareholder value.”
Second Quarter Business Performance Review:
Sales. Combined retail and wholesale used vehicle unit sales were 419,895, an increase of
Total retail used vehicle unit sales increased
Total wholesale vehicle unit sales were 188,098, an increase of
Other sales and revenues increased
Gross Profit. Total gross profit increased to
SG&A. Compared with the second quarter of fiscal 2021, SG&A expenses increased
SG&A as a percent of gross profit was
CarMax Auto Finance.(3) CAF income increased
CAF’s total interest margin percentage, which represents the spread between interest and fees charged to consumers and our funding costs, improved to
During the second quarter, CAF retained
Share Repurchase Activity. We repurchased 1.8 million shares of common stock for
Store Openings. During the second quarter of fiscal 2022, we opened three new locations. In fiscal year 2022, we plan to open a total of 10 new locations.
(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) |
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||
Used vehicle sales |
$ |
6,104.4 |
|
|
$ |
4,389.2 |
|
|
39.1 |
% |
|
$ |
12,261.7 |
|
|
$ |
7,175.4 |
|
|
70.9 |
% |
Wholesale vehicle sales |
1,701.6 |
|
|
819.1 |
|
|
107.7 |
% |
|
3,075.9 |
|
|
1,161.9 |
|
|
164.7 |
% |
||||
Other sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Extended protection plan revenues |
113.0 |
|
|
119.4 |
|
|
(5.4) |
% |
|
247.3 |
|
|
192.8 |
|
|
28.2 |
% |
||||
Third-party finance fees, net |
2.8 |
|
|
(15.4) |
|
|
118.0 |
% |
|
(1.8) |
|
|
(26.2) |
|
|
93.1 |
% |
||||
Advertising & subscription revenues (1) |
34.5 |
|
|
— |
|
|
100.0 |
% |
|
34.5 |
|
|
— |
|
|
100.0 |
% |
||||
Other |
32.1 |
|
|
59.9 |
|
|
(46.4) |
% |
|
68.3 |
|
|
97.0 |
|
|
(29.5) |
% |
||||
Total other sales and revenues |
182.4 |
|
|
163.9 |
|
|
11.3 |
% |
|
348.3 |
|
|
263.6 |
|
|
32.1 |
% |
||||
Total net sales and operating revenues |
$ |
7,988.4 |
|
|
$ |
5,372.2 |
|
|
48.7 |
% |
|
$ |
15,686.0 |
|
|
$ |
8,600.9 |
|
|
82.4 |
% |
(1) |
Excludes intersegment revenues that have been eliminated in consolidation. |
Unit Sales
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||
Used vehicles |
231,797 |
|
217,330 |
|
6.7 |
% |
|
502,596 |
|
352,358 |
|
42.6 |
% |
Wholesale vehicles |
188,098 |
|
132,980 |
|
41.4 |
% |
|
369,487 |
|
196,275 |
|
88.2 |
% |
Average Selling Prices
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
|
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||
Used vehicles |
$ |
26,141 |
|
|
$ |
19,991 |
|
|
30.8 |
% |
|
$ |
24,197 |
|
|
$ |
20,127 |
|
|
20.2 |
% |
Wholesale vehicles |
$ |
8,701 |
|
|
$ |
5,891 |
|
|
47.7 |
% |
|
$ |
7,997 |
|
|
$ |
5,639 |
|
|
41.8 |
% |
Vehicle Sales Changes
|
Three Months Ended |
|
Six Months Ended |
||||||
|
2021 |
2020 |
|
2021 |
2020 |
||||
Used vehicle units |
6.7 |
% |
3.9 |
% |
|
42.6 |
% |
(18.7) |
% |
Used vehicle revenues |
39.1 |
% |
1.0 |
% |
|
70.9 |
% |
(19.3) |
% |
|
|
|
|
|
|
||||
Wholesale vehicle units |
41.4 |
% |
5.1 |
% |
|
88.2 |
% |
(20.6) |
% |
Wholesale vehicle revenues |
107.7 |
% |
20.8 |
% |
|
164.7 |
% |
(13.3) |
% |
Comparable Store Used Vehicle Sales Changes (1)
|
Three Months Ended |
|
Six Months Ended |
||||||
|
2021 |
2020 |
|
2021 |
2020 |
||||
Used vehicle units |
6.2 |
% |
1.2 |
% |
|
41.8 |
% |
(21.0) |
% |
Used vehicle revenues |
38.8 |
% |
(1.6) |
% |
|
70.4 |
% |
(21.6) |
% |
(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 |
|
Six Months Ended |
||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
CAF (2) |
47.1 |
% |
|
45.7 |
% |
|
46.9 |
% |
|
42.8 |
% |
Tier 2 (3) |
21.6 |
% |
|
22.3 |
% |
|
22.2 |
% |
|
24.7 |
% |
Tier 3 (4) |
7.2 |
% |
|
11.1 |
% |
|
8.7 |
% |
|
12.4 |
% |
Other (5) |
24.1 |
% |
|
20.9 |
% |
|
22.2 |
% |
|
20.1 |
% |
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 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 |
|
Six Months Ended |
||||||||||||||||||||
(In millions) |
2021 |
% (1) |
|
2020 |
% (1) |
|
2021 |
% (1) |
|
2020 |
% (1) |
||||||||||||
Net sales and operating revenues |
$ |
7,988.4 |
|
100.0 |
|
|
$ |
5,372.2 |
|
100.0 |
|
|
$ |
15,686.0 |
|
100.0 |
|
|
$ |
8,600.9 |
|
100.0 |
|
Gross profit |
$ |
815.5 |
|
10.2 |
|
|
$ |
752.1 |
|
14.0 |
|
|
$ |
1,740.0 |
|
11.1 |
|
|
$ |
1,106.3 |
|
12.9 |
|
CarMax Auto Finance income |
$ |
200.0 |
|
2.5 |
|
|
$ |
147.2 |
|
2.7 |
|
|
$ |
441.8 |
|
2.8 |
|
|
$ |
198.1 |
|
2.3 |
|
Selling, general, and administrative expenses |
$ |
574.3 |
|
7.2 |
|
|
$ |
441.9 |
|
8.2 |
|
|
$ |
1,128.4 |
|
7.2 |
|
|
$ |
766.8 |
|
8.9 |
|
Interest expense |
$ |
22.4 |
|
0.3 |
|
|
$ |
22.5 |
|
0.4 |
|
|
$ |
42.9 |
|
0.3 |
|
|
$ |
46.4 |
|
0.5 |
|
Earnings before income taxes |
$ |
367.8 |
|
4.6 |
|
|
$ |
388.3 |
|
7.2 |
|
|
$ |
935.1 |
|
6.0 |
|
|
$ |
392.5 |
|
4.6 |
|
Net earnings |
$ |
285.3 |
|
3.6 |
|
|
$ |
296.7 |
|
5.5 |
|
|
$ |
722.0 |
|
4.6 |
|
|
$ |
301.7 |
|
3.5 |
|
(1) |
Calculated as a percentage of net sales and operating revenues. |
Gross Profit (1)
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
(In millions) |
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||
Used vehicle gross profit |
$ |
506.5 |
|
|
$ |
481.2 |
|
|
5.3 |
% |
|
$ |
1,103.5 |
|
|
$ |
742.7 |
|
|
48.6 |
% |
Wholesale vehicle gross profit |
189.0 |
|
|
144.4 |
|
|
30.9 |
% |
|
374.9 |
|
|
206.3 |
|
|
81.7 |
% |
||||
Other gross profit |
120.0 |
|
|
126.5 |
|
|
(5.3) |
% |
|
261.6 |
|
|
157.3 |
|
|
66.3 |
% |
||||
Total |
$ |
815.5 |
|
|
$ |
752.1 |
|
|
8.4 |
% |
|
$ |
1,740.0 |
|
|
$ |
1,106.3 |
|
|
57.3 |
% |
(1) |
Amounts are net of intercompany eliminations. |
Gross Profit per Unit (1)
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
|
2021 |
2020 |
|
2021 |
2020 |
||||||||||||||||
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
||||||||||||
Used vehicle gross profit |
$ |
2,185 |
|
8.3 |
|
$ |
2,214 |
|
11.0 |
|
|
$ |
2,196 |
|
9.0 |
|
$ |
2,108 |
|
10.4 |
|
Wholesale vehicle gross profit |
$ |
1,005 |
|
11.1 |
|
$ |
1,086 |
|
17.6 |
|
|
$ |
1,015 |
|
12.2 |
|
$ |
1,051 |
|
17.8 |
|
Other gross profit |
$ |
517 |
|
65.8 |
|
$ |
583 |
|
77.3 |
|
|
$ |
521 |
|
75.1 |
|
$ |
447 |
|
59.7 |
|
Total gross profit |
$ |
3,518 |
|
10.2 |
|
$ |
3,461 |
|
14.0 |
|
|
$ |
3,462 |
|
11.1 |
|
$ |
3,140 |
|
12.9 |
|
(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 and total categories, which are divided by total used units sold. | |
(3) |
Calculated as a percentage of its respective sales or revenue. |
SG&A Expenses (1) (2)
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
(In millions) |
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||
Compensation and benefits: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits,
|
$ |
299.5 |
|
|
$ |
239.3 |
|
|
25.1 |
% |
|
$ |
583.6 |
|
|
$ |
430.5 |
|
|
35.6 |
% |
Share-based compensation expense |
28.7 |
|
|
34.3 |
|
|
(16.3) |
% |
|
67.1 |
|
|
58.0 |
|
|
15.8 |
% |
||||
Total compensation and benefits (3) |
$ |
328.2 |
|
|
$ |
273.6 |
|
|
19.9 |
% |
|
$ |
650.7 |
|
|
$ |
488.5 |
|
|
33.2 |
% |
Occupancy costs |
55.1 |
|
|
52.8 |
|
|
4.3 |
% |
|
105.6 |
|
|
98.6 |
|
|
7.2 |
% |
||||
Advertising expense |
85.0 |
|
|
50.5 |
|
|
68.5 |
% |
|
157.5 |
|
|
85.0 |
|
|
85.4 |
% |
||||
Other overhead costs (4) |
106.0 |
|
|
65.0 |
|
|
63.0 |
% |
|
214.6 |
|
|
94.7 |
|
|
126.3 |
% |
||||
Total SG&A expenses |
$ |
574.3 |
|
|
$ |
441.9 |
|
|
30.0 |
% |
|
$ |
1,128.4 |
|
|
$ |
766.8 |
|
|
47.1 |
% |
SG&A as % of gross profit |
70.4 |
% |
|
58.8 |
% |
|
11.6 |
% |
|
64.8 |
% |
|
69.3 |
% |
|
(4.5) |
% |
||||
(1) |
Depreciation and amortization previously included in SG&A expenses is now separately presented and is excluded from this table. Prior period amounts have been reclassified to conform to the current period’s presentation. | |
(2) |
Amounts are net of intercompany eliminations. | |
(3) |
Excludes compensation and benefits related to reconditioning and vehicle repair service, which are included in cost of sales. | |
(4) |
Includes IT expenses, non-CAF bad debt, insurance, preopening and relocation costs, charitable contributions, travel and other administrative expenses. |
Components of CAF Income and Other CAF Information
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
(In millions) |
2021 |
% (1) |
2020 |
% (1) |
|
2021 |
% (1) |
2020 |
% (1) |
||||||||||||
Interest margin: |
|
|
|
|
|
|
|
|
|
||||||||||||
Interest and fee income |
$ |
324.1 |
|
8.8 |
|
$ |
280.1 |
|
8.5 |
|
|
$ |
634.4 |
|
8.8 |
|
$ |
562.6 |
|
8.5 |
|
Interest expense |
(60.6) |
|
(1.7) |
|
(81.3) |
|
(2.5) |
|
|
(126.4) |
|
(1.8) |
|
(165.9) |
|
(2.5) |
|
||||
Total interest margin |
263.5 |
|
7.2 |
|
198.8 |
|
6.0 |
|
|
508.0 |
|
7.0 |
|
396.7 |
|
6.0 |
|
||||
Provision for loan losses |
(35.5) |
|
(1.0) |
|
(26.0) |
|
(0.8) |
|
|
(11.1) |
|
(0.2) |
|
(148.0) |
|
(2.2) |
|
||||
Total interest margin after provision
|
228.0 |
|
6.2 |
|
172.8 |
|
5.2 |
|
|
496.9 |
|
6.9 |
|
248.7 |
|
3.7 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total other expense |
— |
|
— |
|
(0.3) |
|
— |
|
|
— |
|
— |
|
(2.2) |
|
— |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total direct expenses |
(27.9) |
|
(0.8) |
|
(25.4) |
|
(0.8) |
|
|
(55.1) |
|
(0.8) |
|
(48.4) |
|
(0.7) |
|
||||
CarMax Auto Finance income |
$ |
200.0 |
|
5.4 |
|
$ |
147.2 |
|
4.5 |
|
|
$ |
441.8 |
|
6.1 |
|
$ |
198.1 |
|
3.0 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total average managed receivables |
$ |
14,683.3 |
|
|
$ |
13,218.8 |
|
|
|
$ |
14,416.0 |
|
|
$ |
13,313.6 |
|
|
||||
Net loans originated |
$ |
2,372.4 |
|
|
$ |
1,790.6 |
|
|
|
$ |
4,855.8 |
|
|
$ |
2,782.9 |
|
|
||||
Net penetration rate |
43.0 |
% |
|
42.6 |
% |
|
|
43.4 |
% |
|
40.1 |
% |
|
||||||||
Weighted average contract rate |
8.5 |
% |
|
8.2 |
% |
|
|
8.7 |
% |
|
8.3 |
% |
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ending allowance for loan losses |
$ |
398.1 |
|
|
$ |
432.5 |
|
|
|
$ |
398.1 |
|
|
$ |
432.5 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Warehouse facility information: |
|
|
|
|
|
|
|
|
|
||||||||||||
Ending funded receivables |
$ |
3,181.9 |
|
|
$ |
2,253.7 |
|
|
|
$ |
3,181.9 |
|
|
$ |
2,253.7 |
|
|
||||
Ending unused capacity |
$ |
1,643.1 |
|
|
$ |
1,246.3 |
|
|
|
$ |
1,643.1 |
|
|
$ |
1,246.3 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) |
Annualized percentage of total average managed receivables. |
Earnings Highlights
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
(In millions except per share data) |
2021 |
|
2020 |
|
Change |
|
2021 |
|
2020 |
|
Change |
||||||||||
Net earnings |
$ |
285.3 |
|
|
$ |
296.7 |
|
|
(3.9) |
% |
|
$ |
722.0 |
|
|
$ |
301.7 |
|
|
139.3 |
% |
Diluted weighted average shares outstanding |
165.6 |
|
|
165.6 |
|
|
— |
% |
|
166.0 |
|
|
164.6 |
|
|
0.8 |
% |
||||
Net earnings per diluted share |
$ |
1.72 |
|
|
$ |
1.79 |
|
|
(3.9) |
% |
|
$ |
4.35 |
|
|
$ |
1.83 |
|
|
137.7 |
% |
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 2022 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. CarMax also provides a variety of vehicle delivery methods, including home delivery, contactless curbside pickup and appointments in its stores. During the fiscal year ending
Forward-Looking Statements
We caution readers that the statements contained in this release 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, revenue, margins, expenses, liquidity, loan originations, capital expenditures, 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,” “will” and other similar expressions, whether in the negative or affirmative. Such forward-looking statements are based upon management’s current knowledge and assumptions about future events 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:
-
The effect and consequences of the Coronavirus public health crisis on matters including
U.S. and local economies; our business operations and continuity; the availability of corporate and consumer financing; the health and productivity of our associates; the ability of third-party providers to continue uninterrupted service; and the regulatory environment in which we operate. -
Changes in general or regional
U.S. economic conditions. - Changes in the availability or cost of capital and working capital financing, including changes related to the asset-backed securitization market.
- Changes in the competitive landscape and/or our failure to successfully adjust to such changes.
- Events that damage our reputation or harm the perception of the quality of our brand.
- Our inability to realize the benefits associated with our omni-channel initiatives.
- Our inability to realize the expected benefits of strategic transactions, including our acquisition of Edmunds.
- 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.
- Security breaches or other events that result in the misappropriation, loss or other unauthorized disclosure of confidential customer, associate or corporate information.
- Significant changes in prices of new and used vehicles.
- Changes in economic conditions or other factors that result in greater credit losses for CAF’s portfolio of auto loans receivable than anticipated.
- A reduction in the availability of or access to sources of inventory or a failure to expeditiously liquidate inventory.
- 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.
- Factors related to the regulatory and legislative environment in which we operate.
- Factors related to geographic and sales growth, including the inability to effectively manage our growth.
- The failure of or inability to sufficiently enhance key information systems.
- The performance of the third-party vendors we rely on for key components of our business.
- The effect of various litigation matters.
- Adverse conditions affecting one or more automotive manufacturers, and manufacturer recalls.
- The failure or inability to realize the benefits associated with our strategic investments.
-
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 volatility in the market price for our common stock.
- The failure or inability to adequately protect our intellectual property.
- The occurrence of severe weather events.
- Factors related to the geographic concentration of our stores.
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) |
2021 |
% (1) |
2020 |
% (1) |
|
2021 |
% (1) |
2020 |
% (1) |
||||||||||||
SALES AND OPERATING REVENUES: |
|
|
|
|
|
|
|
|
|
||||||||||||
Used vehicle sales |
$ |
6,104,366 |
|
76.4 |
|
$ |
4,389,233 |
|
81.7 |
|
|
$ |
12,261,710 |
|
78.2 |
|
$ |
7,175,435 |
|
83.4 |
|
Wholesale vehicle sales |
1,701,572 |
|
21.3 |
|
819,082 |
|
15.2 |
|
|
3,075,929 |
|
19.6 |
|
1,161,934 |
|
13.5 |
|
||||
Other sales and revenues |
182,421 |
|
2.3 |
|
163,851 |
|
3.0 |
|
|
348,319 |
|
2.2 |
|
263,579 |
|
3.1 |
|
||||
NET SALES AND OPERATING REVENUES |
7,988,359 |
|
100.0 |
|
5,372,166 |
|
100.0 |
|
|
15,685,958 |
|
100.0 |
|
8,600,948 |
|
100.0 |
|
||||
COST OF SALES: |
|
|
|
|
|
|
|
|
|
||||||||||||
Used vehicle cost of sales |
5,597,842 |
|
70.1 |
|
3,908,065 |
|
72.7 |
|
|
11,158,179 |
|
71.1 |
|
6,432,741 |
|
74.8 |
|
||||
Wholesale vehicle cost of sales |
1,512,559 |
|
18.9 |
|
674,712 |
|
12.6 |
|
|
2,701,072 |
|
17.2 |
|
955,634 |
|
11.1 |
|
||||
Other cost of sales |
62,474 |
|
0.8 |
|
37,246 |
|
0.7 |
|
|
86,714 |
|
0.6 |
|
106,247 |
|
1.2 |
|
||||
TOTAL COST OF SALES |
7,172,875 |
|
89.8 |
|
4,620,023 |
|
86.0 |
|
|
13,945,965 |
|
88.9 |
|
7,494,622 |
|
87.1 |
|
||||
GROSS PROFIT |
815,484 |
|
10.2 |
|
752,143 |
|
14.0 |
|
|
1,739,993 |
|
11.1 |
|
1,106,326 |
|
12.9 |
|
||||
CARMAX AUTO FINANCE INCOME |
200,033 |
|
2.5 |
|
147,195 |
|
2.7 |
|
|
441,764 |
|
2.8 |
|
198,145 |
|
2.3 |
|
||||
Selling, general, and
|
574,286 |
|
7.2 |
|
441,923 |
|
8.2 |
|
|
1,128,355 |
|
7.2 |
|
766,814 |
|
8.9 |
|
||||
Depreciation and amortization (2) |
52,789 |
|
0.7 |
|
48,285 |
|
0.9 |
|
|
102,679 |
|
0.7 |
|
97,110 |
|
1.1 |
|
||||
Interest expense |
22,410 |
|
0.3 |
|
22,469 |
|
0.4 |
|
|
42,944 |
|
0.3 |
|
46,427 |
|
0.5 |
|
||||
Other (income) expense |
(1,782) |
|
— |
|
(1,680) |
|
— |
|
|
(27,359) |
|
(0.2) |
|
1,615 |
|
— |
|
||||
Earnings before income taxes |
367,814 |
|
4.6 |
|
388,341 |
|
7.2 |
|
|
935,138 |
|
6.0 |
|
392,505 |
|
4.6 |
|
||||
Income tax provision |
82,547 |
|
1.0 |
|
91,645 |
|
1.7 |
|
|
213,115 |
|
1.4 |
|
90,831 |
|
1.1 |
|
||||
NET EARNINGS |
$ |
285,267 |
|
3.6 |
|
$ |
296,696 |
|
5.5 |
|
|
$ |
722,023 |
|
4.6 |
|
$ |
301,674 |
|
3.5 |
|
WEIGHTED AVERAGE COMMON SHARES: |
|
|
|
|
|
|
|
|
|||||||||||||
Basic |
162,966 |
|
|
163,434 |
|
|
|
163,058 |
|
|
163,053 |
|
|
||||||||
Diluted |
165,643 |
|
|
165,623 |
|
|
|
165,969 |
|
|
164,580 |
|
|
||||||||
NET EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
|
||||||||||||
Basic |
$ |
1.75 |
|
|
$ |
1.82 |
|
|
|
$ |
4.43 |
|
|
$ |
1.85 |
|
|
||||
Diluted |
$ |
1.72 |
|
|
$ |
1.79 |
|
|
|
$ |
4.35 |
|
|
$ |
1.83 |
|
|
||||
(1) |
Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding. | |
(2) |
Depreciation and amortization previously included in Selling, general, and administrative expenses is now separately presented. Prior period amounts have been reclassified to conform to the current period’s presentation. |
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||||||
|
|
As of |
||||||||||
|
|
|
|
|
|
|
||||||
(In thousands except share data) |
2021 |
|
2021 |
|
2020 |
|||||||
ASSETS |
|
|
|
|
|
|||||||
|
CURRENT ASSETS: |
|
|
|
|
|
||||||
|
Cash and cash equivalents |
$ |
58,095 |
|
|
$ |
132,319 |
|
|
$ |
711,561 |
|
|
Restricted cash from collections on auto loans receivable |
570,567 |
|
|
496,415 |
|
|
520,876 |
|
|||
|
Accounts receivable, net |
517,260 |
|
|
239,070 |
|
|
203,155 |
|
|||
|
Inventory |
4,105,458 |
|
|
3,157,159 |
|
|
2,824,959 |
|
|||
|
Other current assets |
119,916 |
|
|
91,833 |
|
|
67,308 |
|
|||
|
TOTAL CURRENT ASSETS |
5,371,296 |
|
|
4,116,796 |
|
|
4,327,859 |
|
|||
|
Auto loans receivable, net |
14,656,170 |
|
|
13,489,819 |
|
|
13,013,106 |
|
|||
|
Property and equipment, net |
3,128,896 |
|
|
3,055,563 |
|
|
3,044,773 |
|
|||
|
Deferred income taxes |
117,288 |
|
|
164,261 |
|
|
133,749 |
|
|||
|
Operating lease assets |
553,727 |
|
|
431,652 |
|
|
444,158 |
|
|||
|
|
150,343 |
|
|
653 |
|
|
8,676 |
|
|||
|
Other assets |
475,602 |
|
|
282,797 |
|
|
273,985 |
|
|||
|
TOTAL ASSETS |
$ |
24,453,322 |
|
|
$ |
21,541,541 |
|
|
$ |
21,246,306 |
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|||||||
|
CURRENT LIABILITIES: |
|
|
|
|
|
||||||
|
Accounts payable |
$ |
903,847 |
|
|
$ |
799,333 |
|
|
$ |
683,715 |
|
|
Accrued expenses and other current liabilities |
487,771 |
|
|
415,465 |
|
|
350,185 |
|
|||
|
Accrued income taxes |
422 |
|
|
218 |
|
|
64,734 |
|
|||
|
Current portion of operating lease liabilities |
43,676 |
|
|
30,953 |
|
|
31,616 |
|
|||
|
Short-term debt |
167 |
|
|
— |
|
|
838 |
|
|||
|
Current portion of long-term debt |
10,562 |
|
|
9,927 |
|
|
10,005 |
|
|||
|
Current portion of non-recourse notes payable |
512,515 |
|
|
442,652 |
|
|
457,849 |
|
|||
|
TOTAL CURRENT LIABILITIES |
1,958,960 |
|
|
1,698,548 |
|
|
1,598,942 |
|
|||
|
Long-term debt, excluding current portion |
2,190,415 |
|
|
1,322,415 |
|
|
1,896,784 |
|
|||
|
Non-recourse notes payable, excluding current portion |
14,439,700 |
|
|
13,297,504 |
|
|
12,900,984 |
|
|||
|
Operating lease liabilities, excluding current portion |
538,296 |
|
|
423,618 |
|
|
435,113 |
|
|||
|
Other liabilities |
410,772 |
|
|
434,843 |
|
|
431,923 |
|
|||
|
TOTAL LIABILITIES |
19,538,143 |
|
|
17,176,928 |
|
|
17,263,746 |
|
|||
|
|
|
|
|
|
|
||||||
|
Commitments and contingent liabilities |
|
|
|
|
|
||||||
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
||||||
|
Common stock, |
81,235 |
|
|
81,586 |
|
|
82,081 |
|
|||
|
Capital in excess of par value |
1,653,066 |
|
|
1,513,821 |
|
|
1,460,300 |
|
|||
|
Accumulated other comprehensive loss |
(112,343) |
|
|
(118,691) |
|
|
(160,426) |
|
|||
|
Retained earnings |
3,293,221 |
|
|
2,887,897 |
|
|
2,600,605 |
|
|||
|
TOTAL SHAREHOLDERS’ EQUITY |
4,915,179 |
|
|
4,364,613 |
|
|
3,982,560 |
|
|||
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
24,453,322 |
|
|
$ |
21,541,541 |
|
|
$ |
21,246,306 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|||||||
|
Six Months Ended |
||||||
(In thousands) |
2021 |
|
2020 |
||||
OPERATING ACTIVITIES: |
|
|
|
||||
Net earnings |
$ |
722,023 |
|
|
$ |
301,674 |
|
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
129,300 |
|
|
118,967 |
|
||
Share-based compensation expense |
72,780 |
|
|
62,794 |
|
||
Provision for loan losses |
11,107 |
|
|
147,977 |
|
||
Provision for cancellation reserves |
62,886 |
|
|
35,678 |
|
||
Deferred income tax provision |
32,502 |
|
|
8,598 |
|
||
Other |
(19,883) |
|
|
5,098 |
|
||
Net (increase) decrease in: |
|
|
|
||||
Accounts receivable, net |
(244,471) |
|
|
(12,065) |
|
||
Inventory |
(948,299) |
|
|
21,457 |
|
||
Other current assets |
(26,496) |
|
|
19,691 |
|
||
Auto loans receivable, net |
(1,177,458) |
|
|
188,601 |
|
||
Other assets |
(9,745) |
|
|
(6,586) |
|
||
Net increase (decrease) in: |
|
|
|
||||
Accounts payable, accrued expenses and other |
|
|
|
||||
current liabilities and accrued income taxes |
115,542 |
|
|
24,912 |
|
||
Other liabilities |
(105,109) |
|
|
(27,020) |
|
||
|
(1,385,321) |
|
|
889,776 |
|
||
INVESTING ACTIVITIES: |
|
|
|
||||
Capital expenditures |
(137,838) |
|
|
(91,998) |
|
||
Proceeds from disposal of property and equipment |
260 |
|
|
826 |
|
||
Proceeds from sale of business |
602 |
|
|
— |
|
||
Purchases of investments |
(12,651) |
|
|
(2,566) |
|
||
Sales and returns of investments |
10,954 |
|
|
1,381 |
|
||
Business acquisition, net of cash acquired |
(241,563) |
|
|
— |
|
||
|
(380,236) |
|
|
(92,357) |
|
||
FINANCING ACTIVITIES: |
|
|
|
||||
Increase in short-term debt, net |
167 |
|
|
798 |
|
||
Proceeds from issuances of long-term debt |
3,035,601 |
|
|
1,542,500 |
|
||
Payments on long-term debt |
(2,168,411) |
|
|
(1,425,084) |
|
||
Cash paid for debt issuance costs |
(9,547) |
|
|
(8,037) |
|
||
Payments on finance lease obligations |
(5,709) |
|
|
(2,880) |
|
||
Issuances of non-recourse notes payable |
7,414,283 |
|
|
4,798,000 |
|
||
Payments on non-recourse notes payable |
(6,201,801) |
|
|
(5,028,898) |
|
||
Repurchase and retirement of common stock |
(355,495) |
|
|
(54,151) |
|
||
Equity issuances |
60,087 |
|
|
91,724 |
|
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES |
1,769,175 |
|
|
(86,028) |
|
||
Increase in cash, cash equivalents, and restricted cash |
3,618 |
|
|
711,391 |
|
||
Cash, cash equivalents, and restricted cash at beginning of year |
771,947 |
|
|
656,390 |
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD |
$ |
775,565 |
|
|
$ |
1,367,781 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210930005142/en/
Investors:
investor_relations@carmax.com, (804) 747-0422 x7865
Media:
pr@carmax.com, (855) 887-2915
Source:
FAQ
What were CarMax's second quarter earnings for 2021?
How did CarMax perform in vehicle sales in the second quarter of 2021?
What were CarMax's revenues for the second quarter of fiscal 2022?
How much did CarMax's Auto Finance income increase in the second quarter of 2021?
What is the future outlook for CarMax regarding its online sales platform?
