About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, The ...

Key Takeaways CarMax posted an increase in retail unit sales in the second quarter, and earnings and revenue came in above estimates. Comparable store unit sales increased 4.3% year-over-year. CEO Bill Nash noted the positive results came even as the industry faced "auto loan loss pressure." CarMax (KMX) shares drove higher Thursday after the biggest U.S. used car retailer posted better-thananticipated results on higher retail vehicle sales. The company reported fiscal 2025 second-quarter earnings per share ...

Financial Data and Key Metrics - Total sales for Q2 FY25 were $7 billion, down 1% YoY, driven by lower retail and wholesale prices, partially offset by higher retail volume [5] - Retail unit sales increased 5.1% YoY, with used unit comps up 4.3% [5] - Average selling price (ASP) declined by $1,250 per unit or 5% YoY [5] - Retail gross profit per used unit was $2,269, consistent with $2,251 in the prior year [6] - Wholesale gross profit per unit was $975, in line with $963 a year ago [6] - CarMax Auto Finance (CAF) income was $116 million, down 14% YoY, impacted by industry-wide loan loss pressures [7] - Net earnings per diluted share were $0.85, up 13% YoY [8] - Total gross profit was $760 million, up 9% YoY [8] Business Line Performance - Retail business saw a 5.1% increase in total unit sales, with used unit comps up 4.3% [5] - Wholesale business purchased approximately 300,000 vehicles, up 3% YoY, with 269,000 from consumers and 31,000 from dealers [6] - Online retail unit sales accounted for 15% of total retail unit sales, up from 14% last year [7] - Omni-sales accounted for 57% of retail unit sales, up from 55% in the prior year [7] - CAF originated approximately $2.2 billion in loans, with a sales penetration of 42% [12] Market Performance - Retail unit sales improved sequentially from an 8.3% decline in Q1 to a 0.3% decline in Q2 [6] - Online transactions accounted for 29% of total revenue, slightly down from last year due to lower wholesale pricing [7] - Wholesale auctions and sales were 100% virtual, representing 17% of total revenue [7] Strategy and Industry Competition - The company is testing a new full spectrum underwriting model to expand its lending capabilities [5][16] - CAF successfully executed its first non-prime ABS transaction and a higher prime ABS deal, enhancing funding capacity [16] - The company is focusing on driving down the cost of goods sold through logistics and reconditioning efficiencies [20] - CarMax launched an EV Hub on its website to address consumer questions about electric vehicles [20] Management Commentary on Operating Environment and Future Outlook - Management noted industry-wide auto loan loss pressures but remains optimistic about future sales and earnings growth [4][21] - The company expects continued year-over-year improvement in service margins, driven by efficiency measures and sales growth [9] - Management highlighted the importance of the omnichannel experience and digital tools in driving customer satisfaction and operational efficiency [19][20] Other Important Information - The company repurchased 1.4 million shares for $106 million during the quarter, with $2.15 billion remaining in the repurchase authorization [11] - SG&A expenses increased by 4% YoY to $611 million, primarily due to higher compensation and occupancy costs [9] - The company expects to incur less than $10 million in charges related to logistics optimization, which will be offset by long-term efficiencies [10] Q&A Session Summary Question: Update on unit comps and market view [22] - Unit comps are trending positive for Q3, in line with Q2, but slightly softer due to fewer weekend days in September [22] - Management is cautious about credit headwinds but remains committed to full spectrum lending, with Tier 2 and Tier 3 testing underway [23][24] Question: CAF profitability and loan loss provisions [28] - CAF profitability is impacted by higher loan losses, but management expects funding cost reductions to provide a tailwind [29] - The $52 million provision adjustment for existing loans was outsized compared to previous quarters, but management believes the reserve adequately captures future losses [31] Question: Credit trends and underwriting adjustments [32] - Management tightened underwriting in April 2024 and is monitoring portfolio performance closely, with no further tightening expected in the near term [33][36] Question: Vehicle sourcing and dealer relationships [37] - The company sourced 31,000 vehicles from dealers, up 60% YoY, driven by the Edmunds sales team and increased dealer participation [38] Question: Improving used car unit comps and loan loss provisions [41] - Retail unit comps improved due to internal efficiencies, declining prices, and a stable pricing environment [42][43] - The higher loan loss provision reflects both portfolio performance and broader industry trends [44] Question: September comps and advertising spend [46] - September comps are tracking positive for the quarter, with advertising spend in line with annual targets despite quarterly variations [46][49] Question: Credit environment and Tier 3 penetration [50] - Tier 3 penetration is down to 7%, primarily due to affordability challenges rather than underwriting tightening [51] Question: Digital progression tools and conversion rates [52] - The new order processing system has been rolled out nationwide, improving the customer and associate experience, though early conversion rate impacts are still being assessed [53] Question: Online sales and unit profitability [55] - Online sales accounted for 15% of total retail unit sales, with omni-sales up to 57% [55] - The company is more efficient in its omni-selling model compared to pre-omni metrics [56] Question: Wholesale market and GPU trends [72] - The company maintains strong self-sufficiency in vehicle sourcing, with over 70% of vehicles bought through appraisal lanes and dealers, helping to manage margins [73] Question: Credit penetration and third-party financing [75] - CAF aims to be a full spectrum lender, with current penetration at 42%, and expects to grow penetration over time while maintaining a diverse lender base [75][76] Question: Reconditioning and logistics efficiency [82] - The company is focused on improving reconditioning efficiency through various initiatives, including better part utilization and capacity management [83] Question: Advertising expense and comps [85] - Advertising expense was down YoY due to timing, with full-year spending expected to align with targets [85] Question: Other financing channel and capital allocation [88] - The other financing channel primarily serves rate-sensitive, higher-end consumers, many of whom pay in cash [88] - Share repurchases are expected to continue at the current pace [89]

CarMax (KMX) reported $7.01 billion in revenue for the quarter ended August 2024, representing a year-overyear decline of 0.9%. EPS of $0.85 for the same period compares to $0.75 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $6.85 billion, representing a surprise of +2.38%. The company delivered an EPS surprise of -1.16%, with the consensus EPS estimate being $0.86. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street exp ...

CarMax (KMX) came out with quarterly earnings of $0.85 per share, missing the Zacks Consensus Estimate of $0.86 per share. This compares to earnings of $0.75 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -1.16%. A quarter ago, it was expected that this used car dealership chain would post earnings of $0.99 per share when it actually produced earnings of $0.97, delivering a surprise of -2.02%. Over the last four quarters, the ...

CARMAX REPORTS SECOND QUARTER FISCAL YEAR 2025 RESULTS Delivers positive retail used unit growth and double-digit earnings increase Richmond, Va., September 26, 2024 – CarMax, Inc. (NYSE:KMX) today reported results for the second quarter ended August 31, 2024. Second Quarter Highlights: • Retail used unit sales increased 5.1% and comparable store used unit sales increased 4.3% from the prior year's second quarter; wholesale units decreased 0.3%. • Gross profit per retail used unit of $2,269 and gross profit ...

CarMax, Inc. KMX will release earnings results for its second quarter, before the opening bell on Thursday, Sept. 26. Analysts expect the Richmond, Virginia-based company to report quarterly earnings at 86 cents per share, up from 75 cents per share in the year-ago period. CarMax is projected to post quarterly revenue of $6.79 billion, according to data from Benzinga Pro. On June 21, the company reported a first-quarter FY25 total net sales and operating revenues decline of 7.5% year-on-year to $7.11 billio ...

RICHMOND, Virginia, Sept. 25, 2024 (GLOBE NEWSWIRE) -- CarMax (NYSE: KMX) has been named to Fortune magazine's 2024 Fortune Best Workplaces in Retail™ list for the 10th consecutive year, ranking #6 in the large company category. Earning a spot on this prestigious list means that CarMax is one of the country's best companies to work for. "We are immensely proud of CarMax's associates for their dedication and hard work. This award is a testament to their unwavering commitment and the supportive culture we hav ...

Wall Street analysts expect CarMax (KMX) to post quarterly earnings of $0.85 per share in its upcoming report, which indicates a year-over-year increase of 13.3%. Revenues are expected to be $6.82 billion, down 3.5% from the year-ago quarter. The consensus EPS estimate for the quarter has undergone a downward revision of 2.3% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe. Ahead of a ...

RICHMOND, VA, Sept. 04, 2024 (GLOBE NEWSWIRE) -- The Richmond Flying Squirrels and Richmondbased CarMax, Inc. (NYSE: KMX), the nation's largest retailer of used cars, announced today that the new Richmond ballpark and community entertainment venue will be named CarMax Park. The multi-year exclusive naming rights for the new ballpark expands the partnership between the Flying Squirrels and CarMax, which began in 2016. In addition to serving as the home of the Flying Squirrels, CarMax Park will also host larg ...