CarMax Reports Second Quarter Fiscal 2023 Results
CarMax, Inc. (KMX) reported mixed Q2 results for the period ended August 31, 2022. Net revenues reached $8.1 billion, a 2.0% increase year-over-year, despite a 10.3% decline in combined retail and wholesale used vehicle unit sales. The gross profit decreased 9.6% to $737.1 million, with retail used vehicle gross profit down 2.3%. Net earnings per diluted share dropped to $0.79, down from $1.72 a year ago. CarMax Auto Finance income saw an 8.6% decline, driven by increased provisions for loan losses. SG&A expenses rose 16.0% to $666 million.
- None.
- Net earnings per diluted share decreased to $0.79, down from $1.72 a year ago.
- Total gross profit was $737.1 million, down 9.6% versus last year's second quarter.
- CarMax Auto Finance income decreased 8.6% to $182.9 million due to a $40 million increase in provisions for loan losses.
- SG&A expenses rose by 16.0% to $666 million, with SG&A as a percentage of gross profit increasing to 90.4%.
Highlights:
-
Net revenues of
$8.1 billion 2.0% compared with the prior year second quarter. -
Total retail used units sold decreased
6.4% , while used unit sales in comparable stores were down8.3% ; gross profit per retail used unit was$2,282 $97 - CarMax’s share of the nationwide 0-10 year old vehicle market continued to increase through July, the latest period for which title data is available.
-
Total wholesale units decreased
15.1% with gross profit per unit of$881 $124 -
Bought 342,731 vehicles from consumers and dealers, down
8.1% versus last year’s second quarter but up approximately50% as compared to the pre-Instant Offer launch in the second quarter of FY21.-
322,543 of these vehicles were from consumers, down
11.5% over last year’s record results. -
20,188 of these vehicles were through MaxOffer, our digital appraisal product for dealers, up
130.4% over last year’s second quarter, and up18% compared to this year’s first quarter.
-
322,543 of these vehicles were from consumers, down
-
CarMax Auto Finance (CAF) income of
$182.9 million 8.6% year-over-year decline as a$40.0 million 7.3% of average managed receivables, up from7.2% in the prior year’s second quarter. -
Expanded our industry-leading pre-qualification finance experience to over
50% of customers; national rollout expected to be complete in the third quarter of fiscal 2023. -
Net earnings per diluted share of
$0.79 $1.72
CEO Commentary:
“While this was a challenging quarter across the used car industry, our ongoing progress in strengthening and expanding our omnichannel experience continues to positively differentiate us and enable us to grow market share,” said
Second Quarter Business Performance Review:
Sales. Combined retail and wholesale used vehicle unit sales were 376,616, a decrease of
Total retail used vehicle unit sales declined
Total wholesale vehicle unit sales decreased
Other sales and revenues declined by
Gross Profit. Total gross profit was
Wholesale vehicle gross profit decreased
Other gross profit declined
SG&A. Compared with the second quarter of fiscal 2022, SG&A expenses increased
CarMax Auto Finance.(3) CAF income decreased
As of
CAF’s total interest margin percentage, which represents the spread between interest and fees charged to consumers and our funding costs, was
Interest Expense. Interest expense increased
Share Repurchase Activity. During the second quarter of fiscal 2023, we repurchased 1.7 million shares of common stock for
Store Openings. During the second quarter of fiscal 2023, we opened three new retail locations in
| (1) | An online retail unit sale is defined as a sale where the customer completes all four of these major transactional activities remotely: reserving the vehicle; financing the vehicle, if needed; trading-in or opting out of a trade in; and creating a remote sales order. |
|
| (2) | Revenue from online transactions is defined as revenue from retail sales that qualify for an online retail sale, as well as any EPP and third-party finance contribution, wholesale sales where the winning bid was an online bid, and all revenue earned by Edmunds. |
|
| (3) | Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions. |
|
Supplemental Financial Information
Amounts and percentage calculations may not total due to rounding.
Sales Components
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||
(In millions) |
|
2022 |
|
|
2021 |
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
||
Used vehicle sales |
$ |
6,284.1 |
|
$ |
6,104.4 |
|
2.9 |
% |
|
$ |
13,298.6 |
|
$ |
12,261.7 |
|
|
8.5 |
% |
Wholesale vehicle sales |
|
1,690.3 |
|
|
1,701.6 |
|
(0.7 |
) % |
|
|
3,806.8 |
|
|
3,075.9 |
|
|
23.8 |
% |
Other sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Extended protection plan revenues |
|
109.8 |
|
|
113.0 |
|
(2.9 |
) % |
|
|
226.3 |
|
|
247.3 |
|
|
(8.5 |
) % |
Third-party finance income/(fees), net |
|
2.7 |
|
|
2.8 |
|
(1.8 |
) % |
|
|
6.1 |
|
|
(1.8 |
) |
|
437.5 |
% |
Advertising & subscription revenues (1) |
|
34.3 |
|
|
34.5 |
|
(0.8 |
) % |
|
|
68.7 |
|
|
34.5 |
|
|
98.7 |
% |
Other |
|
23.6 |
|
|
32.1 |
|
(26.4 |
) % |
|
|
49.9 |
|
|
68.3 |
|
|
(26.9 |
) % |
Total other sales and revenues |
|
170.4 |
|
|
182.4 |
|
(6.6 |
) % |
|
|
351.0 |
|
|
348.3 |
|
|
0.8 |
% |
Total net sales and operating revenues |
$ |
8,144.8 |
|
$ |
7,988.4 |
|
2.0 |
% |
|
$ |
17,456.4 |
|
$ |
15,686.0 |
|
|
11.3 |
% |
(1) |
Excludes intersegment revenues that have been eliminated in consolidation. |
|
Unit Sales
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
Used vehicles |
216,939 |
|
231,797 |
|
(6.4) % |
|
457,889 |
|
502,596 |
|
(8.9) % |
Wholesale vehicles |
159,677 |
|
188,098 |
|
(15.1) % |
|
345,984 |
|
369,487 |
|
(6.4) % |
Average Selling Prices
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
Used vehicles |
|
|
|
|
9.6 % |
|
|
|
|
|
18.8 % |
Wholesale vehicles |
|
|
|
|
17.0 % |
|
|
|
|
|
32.8 % |
Vehicle Sales Changes
|
Three Months Ended |
|
Six Months Ended |
||
|
2022 |
2021 |
|
2022 |
2021 |
Used vehicle units |
(6.4) % |
6.7 % |
|
(8.9) % |
42.6 % |
Used vehicle revenues |
2.9 % |
39.1 % |
|
8.5 % |
70.9 % |
|
|
|
|
|
|
Wholesale vehicle units |
(15.1) % |
41.4 % |
|
(6.4) % |
88.2 % |
Wholesale vehicle revenues |
(0.7) % |
107.7 % |
|
23.8 % |
164.7 % |
Comparable Store Used Vehicle Sales Changes (1)
|
Three Months Ended |
|
Six Months Ended |
||
|
2022 |
2021 |
|
2022 |
2021 |
Used vehicle units |
(8.3) % |
6.2 % |
|
(10.6) % |
41.8 % |
Used vehicle revenues |
0.4 % |
38.8 % |
|
6.0 % |
70.4 % |
(1) |
Stores are added to the comparable store base beginning in their fourteenth full month of operation. Comparable store calculations include results for a set of stores that were included in our comparable store base in both the current and corresponding prior year periods. |
|
Used Vehicle Financing Penetration by Channel (Before the Impact of 3-day Payoffs) (1)
|
Three Months Ended |
|
Six Months Ended |
||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
CAF (2) |
44.8 % |
|
47.1 % |
|
44.0 % |
|
46.9 % |
Tier 2 (3) |
21.6 % |
|
21.6 % |
|
23.5 % |
|
22.2 % |
Tier 3 (4) |
6.0 % |
|
7.2 % |
|
6.6 % |
|
8.7 % |
Other (5) |
27.6 % |
|
24.1 % |
|
25.9 % |
|
22.2 % |
Total |
100.0 % |
|
100.0 % |
|
100.0 % |
|
100.0 % |
| (1) | Calculated as used vehicle units financed for respective channel as a percentage of total used units sold. |
|
| (2) |
Includes CAF's Tier 2 and Tier 3 loan originations, which represent approximately |
|
| (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) |
|
2022 |
% (1) |
|
|
2021 |
% (1) |
|
|
2022 |
% (1) |
|
|
2021 |
% (1) |
||||||
Net sales and operating revenues |
$ |
8,144.8 |
100.0 |
|
$ |
7,988.4 |
100.0 |
|
$ |
17,456.4 |
100.0 |
|
$ |
15,686.0 |
100.0 |
||||||
Gross profit |
$ |
737.1 |
9.1 |
|
$ |
815.5 |
10.2 |
|
$ |
1,612.5 |
9.2 |
|
$ |
1,740.0 |
11.1 |
||||||
CarMax Auto Finance income |
$ |
182.9 |
2.2 |
|
$ |
200.0 |
2.5 |
|
$ |
387.3 |
2.2 |
|
$ |
441.8 |
2.8 |
||||||
Selling, general, and administrative expenses |
$ |
666.0 |
8.2 |
|
$ |
574.3 |
7.2 |
|
$ |
1,322.8 |
7.6 |
|
$ |
1,128.4 |
7.2 |
||||||
Interest expense |
$ |
32.7 |
0.4 |
|
$ |
22.4 |
0.3 |
|
$ |
61.5 |
0.4 |
|
$ |
42.9 |
0.3 |
||||||
Earnings before income taxes |
$ |
167.6 |
2.1 |
|
$ |
367.8 |
4.6 |
|
$ |
504.2 |
2.9 |
|
$ |
935.1 |
6.0 |
||||||
Net earnings |
$ |
125.9 |
1.5 |
|
$ |
285.3 |
3.6 |
|
$ |
378.2 |
2.2 |
|
$ |
722.0 |
4.6 |
||||||
| (1) | Calculated as a percentage of net sales and operating revenues. |
|
Gross Profit (1)
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
(In millions) |
|
2022 |
|
|
2021 |
|
Change |
|
|
2022 |
|
|
2021 |
|
Change |
||
Used vehicle gross profit |
$ |
495.0 |
|
$ |
506.5 |
|
(2.3 |
) % |
|
$ |
1,058.5 |
|
$ |
1,103.5 |
|
(4.1 |
) % |
Wholesale vehicle gross profit |
|
140.7 |
|
|
189.0 |
|
(25.6 |
) % |
|
|
332.3 |
|
|
374.9 |
|
(11.3 |
) % |
Other gross profit |
|
101.4 |
|
|
120.0 |
|
(15.4 |
) % |
|
|
221.7 |
|
|
261.6 |
|
(15.2 |
) % |
Total |
$ |
737.1 |
|
$ |
815.5 |
|
(9.6 |
) % |
|
$ |
1,612.5 |
|
$ |
1,740.0 |
|
(7.3 |
) % |
(1) |
Amounts are net of intercompany eliminations. |
|
Gross Profit per Unit (1)
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||||||
|
2022 |
2021 |
|
2022 |
2021 |
|||||||||||||||
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
|||||||||||
Used vehicle gross profit |
$ |
2,282 |
7.9 |
$ |
2,185 |
8.3 |
|
$ |
2,312 |
8.0 |
$ |
2,196 |
9.0 |
|||||||
Wholesale vehicle gross profit |
$ |
881 |
8.3 |
$ |
1,005 |
11.1 |
|
$ |
961 |
8.7 |
$ |
1,015 |
12.2 |
|||||||
Other gross profit |
$ |
468 |
59.6 |
$ |
517 |
65.8 |
|
$ |
484 |
63.2 |
$ |
521 |
75.1 |
|||||||
| (1) | Amounts are net of intercompany eliminations. Those eliminations had the effect of increasing used vehicle gross profit per unit and wholesale vehicle gross profit per unit and decreasing other gross profit per unit by immaterial amounts. |
|
| (2) | Calculated as category gross profit divided by its respective units sold, except the other category, which is divided by total used units sold. |
|
| (3) | Calculated as a percentage of its respective sales or revenue. |
|
SG&A Expenses (1)
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
(In millions) |
|
2022 |
|
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
|
2021 |
|
|
Change |
||
Compensation and benefits: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits, excluding share-based compensation expense |
$ |
333.8 |
|
|
$ |
299.5 |
|
|
11.4 |
% |
|
$ |
679.0 |
|
|
$ |
583.6 |
|
|
16.3 |
% |
Share-based compensation expense |
|
24.5 |
|
|
|
28.7 |
|
|
(14.5 |
) % |
|
|
46.8 |
|
|
|
67.1 |
|
|
(30.3 |
) % |
Total compensation and benefits (2) |
$ |
358.3 |
|
|
$ |
328.2 |
|
|
9.2 |
% |
|
$ |
725.8 |
|
|
$ |
650.7 |
|
|
11.5 |
% |
Occupancy costs |
|
68.8 |
|
|
|
55.1 |
|
|
25.0 |
% |
|
|
134.7 |
|
|
|
105.6 |
|
|
27.5 |
% |
Advertising expense |
|
82.9 |
|
|
|
85.0 |
|
|
(2.5 |
) % |
|
|
171.8 |
|
|
|
157.5 |
|
|
9.1 |
% |
Other overhead costs (3) |
|
156.0 |
|
|
|
106.0 |
|
|
47.2 |
% |
|
|
290.5 |
|
|
|
214.6 |
|
|
35.5 |
% |
Total SG&A expenses |
$ |
666.0 |
|
|
$ |
574.3 |
|
|
16.0 |
% |
|
$ |
1,322.8 |
|
|
$ |
1,128.4 |
|
|
17.2 |
% |
SG&A as % of gross profit |
|
90.4 |
% |
|
|
70.4 |
% |
|
20.0 |
% |
|
|
82.0 |
% |
|
|
64.8 |
% |
|
17.2 |
% |
| (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, 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) |
|
2022 |
|
% (1) |
|
2021 |
|
% (1) |
|
|
2022 |
|
% (1) |
|
2021 |
|
% (1) |
||||
Interest margin: |
|
|
|
|
|
|
|
|
|
||||||||||||
Interest and fee income |
$ |
357.2 |
|
8.8 |
|
$ |
324.1 |
|
8.8 |
|
|
$ |
703.9 |
|
8.8 |
|
$ |
634.4 |
|
8.8 |
|
Interest expense |
|
(62.5 |
) |
(1.5 |
) |
|
(60.6 |
) |
(1.7 |
) |
|
|
(111.3 |
) |
(1.4 |
) |
|
(126.4 |
) |
(1.8 |
) |
Total interest margin |
|
294.7 |
|
7.3 |
|
|
263.5 |
|
7.2 |
|
|
|
592.6 |
|
7.4 |
|
|
508.0 |
|
7.0 |
|
Provision for loan losses |
|
(75.5 |
) |
(1.9 |
) |
|
(35.5 |
) |
(1.0 |
) |
|
|
(133.3 |
) |
(1.7 |
) |
|
(11.1 |
) |
(0.2 |
) |
Total interest margin after provision for loan losses |
|
219.2 |
|
5.4 |
|
|
228.0 |
|
6.2 |
|
|
|
459.3 |
|
5.7 |
|
|
496.9 |
|
6.9 |
|
Total direct expenses |
|
(36.3 |
) |
(0.9 |
) |
|
(27.9 |
) |
(0.8 |
) |
|
|
(71.9 |
) |
(0.9 |
) |
|
(55.1 |
) |
(0.8 |
) |
CarMax Auto Finance income |
$ |
182.9 |
|
4.5 |
|
$ |
200.0 |
|
5.4 |
|
|
$ |
387.3 |
|
4.8 |
|
$ |
441.8 |
|
6.1 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total average managed receivables |
$ |
16,176.2 |
|
|
$ |
14,683.3 |
|
|
|
$ |
15,996.6 |
|
|
$ |
14,416.0 |
|
|
||||
Net loans originated |
$ |
2,334.0 |
|
|
$ |
2,372.4 |
|
|
|
$ |
4,780.8 |
|
|
$ |
4,855.8 |
|
|
||||
Net penetration rate |
|
41.2 |
% |
|
|
43.0 |
% |
|
|
|
40.2 |
% |
|
|
43.4 |
% |
|
||||
Weighted average contract rate |
|
9.4 |
% |
|
|
8.5 |
% |
|
|
|
9.2 |
% |
|
|
8.7 |
% |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ending allowance for loan losses |
$ |
477.5 |
|
|
$ |
398.1 |
|
|
|
$ |
477.5 |
|
|
$ |
398.1 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Warehouse facility information: |
|
|
|
|
|
|
|
|
|
||||||||||||
Ending funded receivables |
$ |
2,997.9 |
|
|
$ |
3,181.9 |
|
|
|
$ |
2,997.9 |
|
|
$ |
3,181.9 |
|
|
||||
Ending unused capacity |
$ |
2,402.1 |
|
|
$ |
1,643.1 |
|
|
|
$ |
2,402.1 |
|
|
$ |
1,643.1 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
| (1) | Annualized percentage of total average managed receivables. |
|
Earnings Highlights
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
(In millions except per share data) |
|
2022 |
|
|
2021 |
|
Change |
|
|
2022 |
|
|
2021 |
|
Change |
||
Net earnings |
$ |
125.9 |
|
$ |
285.3 |
|
(55.9 |
) % |
|
$ |
378.2 |
|
$ |
722.0 |
|
(47.6 |
) % |
Diluted weighted average shares outstanding |
|
160.2 |
|
|
165.6 |
|
(3.3 |
) % |
|
|
161.0 |
|
|
166.0 |
|
(3.0 |
) % |
Net earnings per diluted share |
$ |
0.79 |
|
$ |
1.72 |
|
(54.1 |
) % |
|
$ |
2.35 |
|
$ |
4.35 |
|
(46.0 |
) % |
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 2023 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, express pickup and appointments in its stores. During the fiscal year ended
Forward-Looking Statements
We caution readers that the statements contained in this release that are not statements of historical fact, including statements about our future business plans, operations, challenges, opportunities or prospects, including without limitation any statements or factors regarding expected operating capacity, sales, inventory, market share, financial targets, revenue, margins, expenses, liquidity, loan originations, capital expenditures, 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:
-
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, including the potential impact of Russia’s invasion ofUkraine . - 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 and strategic investments.
- 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 transactions.
-
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
|
|||||||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
(In thousands except per share data) |
|
2022 |
|
%(1) |
|
2021 |
|
%(1) |
|
|
2022 |
|
|
%(1) |
|
|
2021 |
|
|
%(1) |
|
SALES AND OPERATING REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Used vehicle sales |
$ |
6,284,085 |
|
77.2 |
$ |
6,104,366 |
|
76.4 |
|
$ |
13,298,575 |
|
|
76.2 |
|
$ |
12,261,710 |
|
|
78.2 |
|
Wholesale vehicle sales |
|
1,690,326 |
|
20.8 |
|
1,701,572 |
|
21.3 |
|
|
3,806,843 |
|
|
21.8 |
|
|
3,075,929 |
|
|
19.6 |
|
Other sales and revenues |
|
170,392 |
|
2.1 |
|
182,421 |
|
2.3 |
|
|
351,006 |
|
|
2.0 |
|
|
348,319 |
|
|
2.2 |
|
NET SALES AND OPERATING REVENUES |
|
8,144,803 |
|
100.0 |
|
7,988,359 |
|
100.0 |
|
|
17,456,424 |
|
|
100.0 |
|
|
15,685,958 |
|
|
100.0 |
|
COST OF SALES: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Used vehicle cost of sales |
|
5,789,098 |
|
71.1 |
|
5,597,842 |
|
70.1 |
|
|
12,240,108 |
|
|
70.1 |
|
|
11,158,179 |
|
|
71.1 |
|
Wholesale vehicle cost of sales |
|
1,549,669 |
|
19.0 |
|
1,512,559 |
|
18.9 |
|
|
3,474,519 |
|
|
19.9 |
|
|
2,701,072 |
|
|
17.2 |
|
Other cost of sales |
|
68,891 |
|
0.8 |
|
62,474 |
|
0.8 |
|
|
129,261 |
|
|
0.7 |
|
|
86,714 |
|
|
0.6 |
|
TOTAL COST OF SALES |
|
7,407,658 |
|
90.9 |
|
7,172,875 |
|
89.8 |
|
|
15,843,888 |
|
|
90.8 |
|
|
13,945,965 |
|
|
88.9 |
|
GROSS PROFIT |
|
737,145 |
|
9.1 |
|
815,484 |
|
10.2 |
|
|
1,612,536 |
|
|
9.2 |
|
|
1,739,993 |
|
|
11.1 |
|
CARMAX AUTO FINANCE INCOME |
|
182,869 |
|
2.2 |
|
200,033 |
|
2.5 |
|
|
387,342 |
|
|
2.2 |
|
|
441,764 |
|
|
2.8 |
|
Selling, general, and administrative expenses |
|
666,041 |
|
8.2 |
|
574,286 |
|
7.2 |
|
|
1,322,781 |
|
|
7.6 |
|
|
1,128,355 |
|
|
7.2 |
|
Depreciation and amortization |
|
57,692 |
|
0.7 |
|
52,789 |
|
0.7 |
|
|
113,340 |
|
|
0.6 |
|
|
102,679 |
|
|
0.7 |
|
Interest expense |
|
32,745 |
|
0.4 |
|
22,410 |
|
0.3 |
|
|
61,520 |
|
|
0.4 |
|
|
42,944 |
|
|
0.3 |
|
Other income |
|
(4,039 |
) |
— |
|
(1,782 |
) |
— |
|
|
(1,940 |
) |
|
— |
|
|
(27,359 |
) |
|
(0.2 |
) |
Earnings before income taxes |
|
167,575 |
|
2.1 |
|
367,814 |
|
4.6 |
|
|
504,177 |
|
|
2.9 |
|
|
935,138 |
|
|
6.0 |
|
Income tax provision |
|
41,670 |
|
0.5 |
|
82,547 |
|
1.0 |
|
|
126,007 |
|
|
0.7 |
|
|
213,115 |
|
|
1.4 |
|
NET EARNINGS |
$ |
125,905 |
|
1.5 |
$ |
285,267 |
|
3.6 |
|
$ |
378,170 |
|
|
2.2 |
|
$ |
722,023 |
|
|
4.6 |
|
WEIGHTED AVERAGE COMMON SHARES: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
|
158,801 |
|
|
|
162,966 |
|
|
|
|
159,556 |
|
|
|
|
|
163,058 |
|
|
|
|
Diluted |
|
160,218 |
|
|
|
165,643 |
|
|
|
|
161,015 |
|
|
|
|
|
165,969 |
|
|
|
|
NET EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.79 |
|
|
$ |
1.75 |
|
|
|
$ |
2.37 |
|
|
|
|
$ |
4.43 |
|
|
|
|
Diluted |
$ |
0.79 |
|
|
$ |
1.72 |
|
|
|
$ |
2.35 |
|
|
|
|
$ |
4.35 |
|
|
|
|
(1) |
Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding. |
|
|
|||||||||||
|
|
As of |
|||||||||
|
|
|
|
|
|
|
|||||
(In thousands except share data) |
2022 |
|
2022 |
|
2021 |
||||||
ASSETS |
|
|
|
|
|
||||||
|
CURRENT ASSETS: |
|
|
|
|
|
|||||
|
Cash and cash equivalents |
$ |
56,772 |
|
$ |
102,716 |
|
|
$ |
58,095 |
|
|
Restricted cash from collections on auto loans receivable |
|
533,253 |
|
|
548,099 |
|
|
|
570,567 |
|
|
Accounts receivable, net |
|
402,452 |
|
|
560,984 |
|
|
|
517,260 |
|
|
Inventory |
|
4,671,685 |
|
|
5,124,569 |
|
|
|
4,105,458 |
|
|
Other current assets |
|
208,297 |
|
|
212,922 |
|
|
|
119,916 |
|
|
TOTAL CURRENT ASSETS |
|
5,872,459 |
|
|
6,549,290 |
|
|
|
5,371,296 |
|
|
Auto loans receivable, net |
|
15,961,213 |
|
|
15,289,701 |
|
|
|
14,656,170 |
|
|
Property and equipment, net |
|
3,312,605 |
|
|
3,209,068 |
|
|
|
3,128,896 |
|
|
Deferred income taxes |
|
93,057 |
|
|
120,931 |
|
|
|
117,288 |
|
|
Operating lease assets |
|
530,285 |
|
|
537,357 |
|
|
|
553,727 |
|
|
|
|
141,258 |
|
|
141,258 |
|
|
|
150,343 |
|
|
Other assets |
|
559,666 |
|
|
490,659 |
|
|
|
475,602 |
|
|
TOTAL ASSETS |
$ |
26,470,543 |
|
$ |
26,338,264 |
|
|
$ |
24,453,322 |
|
|
|
|
|
|
|
|
|||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
||||||
|
CURRENT LIABILITIES: |
|
|
|
|
|
|||||
|
Accounts payable |
$ |
928,749 |
|
$ |
937,717 |
|
|
$ |
903,847 |
|
|
Accrued expenses and other current liabilities |
|
482,361 |
|
|
533,271 |
|
|
|
487,771 |
|
|
Accrued income taxes |
|
— |
|
|
— |
|
|
|
422 |
|
|
Current portion of operating lease liabilities |
|
48,783 |
|
|
44,197 |
|
|
|
43,676 |
|
|
Short-term debt |
|
— |
|
|
— |
|
|
|
167 |
|
|
Current portion of long-term debt |
|
112,504 |
|
|
11,203 |
|
|
|
10,562 |
|
|
Current portion of non-recourse notes payable |
|
559,792 |
|
|
521,069 |
|
|
|
512,515 |
|
|
TOTAL CURRENT LIABILITIES |
|
2,132,189 |
|
|
2,047,457 |
|
|
|
1,958,960 |
|
|
Long-term debt, excluding current portion |
|
2,511,417 |
|
|
3,255,304 |
|
|
|
2,190,415 |
|
|
Non-recourse notes payable, excluding current portion |
|
15,534,801 |
|
|
14,919,715 |
|
|
|
14,439,700 |
|
|
Operating lease liabilities, excluding current portion |
|
512,542 |
|
|
523,269 |
|
|
|
538,296 |
|
|
Other liabilities |
|
365,367 |
|
|
357,080 |
|
|
|
410,772 |
|
|
TOTAL LIABILITIES |
|
21,056,316 |
|
|
21,102,825 |
|
|
|
19,538,143 |
|
|
|
|
|
|
|
|
|||||
|
Commitments and contingent liabilities |
|
|
|
|
|
|||||
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|||||
|
Common stock, |
|
79,022 |
|
|
80,527 |
|
|
|
81,235 |
|
|
Capital in excess of par value |
|
1,684,408 |
|
|
1,677,268 |
|
|
|
1,653,066 |
|
|
Accumulated other comprehensive income (loss) |
|
31,999 |
|
|
(46,422 |
) |
|
|
(112,343 |
) |
|
Retained earnings |
|
3,618,798 |
|
|
3,524,066 |
|
|
|
3,293,221 |
|
|
TOTAL SHAREHOLDERS’ EQUITY |
|
5,414,227 |
|
|
5,235,439 |
|
|
|
4,915,179 |
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
26,470,543 |
|
$ |
26,338,264 |
|
|
$ |
24,453,322 |
|
|
|||||||
|
Six Months Ended |
||||||
(In thousands) |
|
2022 |
|
|
|
2021 |
|
OPERATING ACTIVITIES: |
|
|
|
||||
Net earnings |
$ |
378,170 |
|
|
$ |
722,023 |
|
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |
|
|
|
||||
Depreciation and amortization |
|
137,903 |
|
|
|
129,300 |
|
Share-based compensation expense |
|
47,010 |
|
|
|
72,780 |
|
Provision for loan losses |
|
133,343 |
|
|
|
11,107 |
|
Provision for cancellation reserves |
|
59,208 |
|
|
|
62,886 |
|
Deferred income tax provision |
|
800 |
|
|
|
32,502 |
|
Other |
|
9,713 |
|
|
|
(19,883 |
) |
Net decrease (increase) in: |
|
|
|
||||
Accounts receivable, net |
|
158,532 |
|
|
|
(244,471 |
) |
Inventory |
|
452,884 |
|
|
|
(948,299 |
) |
Other current assets |
|
79,188 |
|
|
|
(26,496 |
) |
Auto loans receivable, net |
|
(804,855 |
) |
|
|
(1,177,458 |
) |
Other assets |
|
(31,703 |
) |
|
|
(9,745 |
) |
Net (decrease) increase in: |
|
|
|
||||
Accounts payable, accrued expenses and other |
|
|
|
||||
current liabilities and accrued income taxes |
|
(74,986 |
) |
|
|
115,542 |
|
Other liabilities |
|
(65,618 |
) |
|
|
(105,109 |
) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
|
479,589 |
|
|
|
(1,385,321 |
) |
INVESTING ACTIVITIES: |
|
|
|
||||
Capital expenditures |
|
(204,463 |
) |
|
|
(137,838 |
) |
Proceeds from disposal of property and equipment |
|
84 |
|
|
|
260 |
|
Proceeds from sale of business |
|
— |
|
|
|
602 |
|
Purchases of investments |
|
(5,428 |
) |
|
|
(12,651 |
) |
Sales and returns of investments |
|
2,492 |
|
|
|
10,954 |
|
Business acquisition, net of cash acquired |
|
— |
|
|
|
(241,563 |
) |
|
|
(207,315 |
) |
|
|
(380,236 |
) |
FINANCING ACTIVITIES: |
|
|
|
||||
Increase in short-term debt, net |
|
— |
|
|
|
167 |
|
Proceeds from issuances of long-term debt |
|
2,412,900 |
|
|
|
3,035,601 |
|
Payments on long-term debt |
|
(3,057,565 |
) |
|
|
(2,168,411 |
) |
Cash paid for debt issuance costs |
|
(10,240 |
) |
|
|
(9,547 |
) |
Payments on finance lease obligations |
|
(9,883 |
) |
|
|
(5,709 |
) |
Issuances of non-recourse notes payable |
|
8,230,501 |
|
|
|
7,414,283 |
|
Payments on non-recourse notes payable |
|
(7,576,056 |
) |
|
|
(6,201,801 |
) |
Repurchase and retirement of common stock |
|
(325,168 |
) |
|
|
(355,495 |
) |
Equity issuances |
|
13,282 |
|
|
|
60,087 |
|
|
|
(322,229 |
) |
|
|
1,769,175 |
|
(Decrease) increase in cash, cash equivalents, and restricted cash |
|
(49,955 |
) |
|
|
3,618 |
|
Cash, cash equivalents, and restricted cash at beginning of year |
|
803,618 |
|
|
|
771,947 |
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD |
$ |
753,663 |
|
|
$ |
775,565 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220929005157/en/
Investors:
investor_relations@carmax.com, (804) 747-0422 x7865
Media:
pr@carmax.com, (855) 887-2915
Source:
FAQ
What were CarMax's net revenues for the second quarter of fiscal 2023?
How did CarMax's used vehicle sales perform in Q2 2023?
What was the net earnings per diluted share for CarMax in Q2 2023?
What is the outlook for CarMax's Auto Finance income?
