CarMax(US:KMX)2024-04-15 14:36Vehicle Sales and Operations - CarMax sold 765,572 used vehicles at retail during fiscal year 2024[111] - CarMax sold 546,331 vehicles through wholesale auctions in fiscal 2024[111] - Used vehicle sales for 2024 were $20.92 billion, accounting for 78.8% of total sales, compared to $23.03 billion (77.6%) in 2023 and $24.44 billion (76.6%) in 2022[539] - Wholesale vehicle sales for 2024 were $4.98 billion, representing 18.8% of total sales, down from $5.99 billion (20.2%) in 2023 and $6.76 billion (21.2%) in 2022[539] - Used vehicle sales revenue for 2024 was $20.92 billion, a decrease from $23.03 billion in 2023 and $24.44 billion in 2022[626] - Total net sales and operating revenues for 2024 were $26.54 billion, down from $29.68 billion in 2023 and $31.90 billion in 2022[626] Digital and Online Operations - Approximately 95% of customers who purchased a vehicle from CarMax first visited the company online in fiscal 2024[128] - 70% of CarMax customers leveraged digital capabilities to complete transactions in fiscal 2024[128] - Over 80% of CarMax customers use the online finance-based shopping tool at the start of the credit process[116] Financial Performance and Earnings - Net earnings for 2024 were $479.2 million, compared to $484.8 million in 2023 and $1.15 billion in 2022[517] - Diluted net earnings per share for 2024 were $3.02, compared to $3.03 in 2023 and $6.97 in 2022[515] - Total comprehensive income for 2024 was $440.6 million, compared to $629.1 million in 2023 and $1.22 billion in 2022[517] - Net earnings for 2024 were $479.2 million (1.8% of total sales), slightly lower than $484.8 million (1.6%) in 2023 and significantly lower than $1.15 billion (3.6%) in 2022[539] - Net earnings for fiscal 2024 were $479.2 million, down from $484.8 million in fiscal 2023[574] Cash Flow and Capital Expenditures - Net cash provided by operating activities for 2024 was $458.6 million, compared to $1.28 billion in 2023 and a net cash used of $2.55 billion in 2022[520] - Capital expenditures for 2024 were $465.3 million, compared to $422.7 million in 2023 and $308.5 million in 2022[520] - Proceeds from issuances of long-term debt for 2024 were $134.6 million, compared to $3.02 billion in 2023 and $7.68 billion in 2022[520] - Cash, cash equivalents, and restricted cash at the end of 2024 were $1.25 billion, compared to $951.0 million in 2023 and $803.6 million in 2022[520] - Cash equivalents totaling $506.6 million as of February 29, 2024, up from $470.9 million in 2023[577] Debt and Interest Rates - CarMax's total debt as of February 2024 was $16.87 billion, with $10.44 billion in fixed-rate debt and $6.43 billion in variable-rate debt[498] - A 100-basis point increase in market interest rates would decrease CarMax's fiscal 2024 net earnings per share by approximately $0.02[498] Internal Controls and Reporting - CarMax's internal control over financial reporting was effective as of February 29, 2024[502] - The company maintained effective internal control over financial reporting as of February 29, 2024[511] Segment Operations - The company operates in two reportable segments: CarMax Sales Operations and CarMax Auto Finance (CAF)[522] - The company completed the acquisition of Edmunds Holding Company on June 1, 2021[522] Assets and Liabilities - Total current assets increased to $5.23 billion in 2024 from $5.04 billion in 2023, with cash and cash equivalents rising to $574.1 million from $314.8 million[543] - Auto loans receivable, net of allowance for loan losses, grew to $17.01 billion in 2024 from $16.34 billion in 2023[543] - Total liabilities increased to $21.12 billion in 2024 from $20.57 billion in 2023, with long-term debt decreasing to $1.60 billion from $1.91 billion[543] - Shareholders' equity rose to $6.07 billion in 2024 from $5.61 billion in 2023, driven by an increase in retained earnings to $4.13 billion from $3.72 billion[543] - Cash equivalents consisting of highly liquid investments with original maturities of three months or less were $484.3 million as of February 29, 2024, up from $229.5 million as of February 28, 2023[548] - Other investments, including restricted money market securities and equity securities, totaled $137.3 million as of February 29, 2024, compared to $133.2 million as of February 28, 2023[555] - Accrued compensation and benefits increased to $192.4 million in 2024 from $159.3 million in 2023[557] - Vehicle return reserves increased slightly to $97.8 million in 2024 from $95.9 million in 2023[557] - Restricted cash on deposit in reserve accounts was $118.2 million as of February 29, 2024, compared to $113.7 million as of February 28, 2023[585] - Total average managed receivables were $17,313.2 million for 2024, $16,304.3 million for 2023, and $14,934.0 million for 2022[605] - Auto loans receivable, net, were $17,011.8 million as of February 29, 2024, and $16,341.8 million as of February 28, 2023[606] - Total ending managed receivables were $17,391.8 million as of February 29, 2024, and $16,767.9 million as of February 28, 2023[608] - Core managed receivables for A-grade customers were $9,141.1 million (52.6%) as of February 29, 2024, compared to $8,489.9 million (50.6%) as of February 28, 2023[609] - Core managed receivables for B-grade customers were $6,123.5 million (35.2%) as of February 29, 2024, compared to $5,913.6 million (35.3%) as of February 28, 2023[609] - Core managed receivables for C and other grades were $1,548.7 million (8.9%) as of February 29, 2024, compared to $1,925.7 million (11.5%) as of February 28, 2023[609] - Gross charge-offs were $561.5 million as of February 29, 2024, compared to $561.5 million as of February 28, 2023[609] - The allowance for loan losses was $482.8 million as of February 29, 2024, compared to $507.2 million as of February 28, 2023[608] - Asset-backed term funding was $12,638.2 million as of February 29, 2024, compared to $12,242.8 million as of February 28, 2023[608] - Total ending managed receivables as of February 29, 2024, were $17.39 billion, with past due receivables accounting for 5.44% ($946.6 million) of the total[613] - The company recorded a provision for loan losses of $310.5 million for the year ended February 29, 2024[611] - Delinquent loans 31-60 days past due accounted for 3.07% ($534.4 million) of total ending managed receivables as of February 29, 2024[613] - Allowance for loan losses balance at the end of 2024 was $507.2 million, representing 3.02% of total ending managed receivables[642] - Current portion of cancellation reserves decreased to $69.7 million in 2024 from $76.1 million in 2023[662] - Total assets at fair value were $1,247.407 million in 2024, with 95.3% classified as Level 1 and 4.7% as Level 2[653] - Derivative instruments designated as hedges had a fair value of $45.761 million in assets and ($2.302) million in liabilities as of February 29, 2024[653] - Deferred tax assets decreased to $426,693 thousand as of February 2024 from $447,628 thousand in 2023[664] - Deferred tax liabilities decreased to $327,903 thousand as of February 2024 from $366,888 thousand in 2023[664] - Net deferred tax asset increased to $98,790 thousand as of February 2024 from $80,740 thousand in 2023[664] - Allowance for loan losses decreased to $117,618 thousand as of February 2024 from $123,636 thousand in 2023[664] - Operating lease liabilities decreased to $139,124 thousand as of February 2024 from $146,006 thousand in 2023[664] - Share-based compensation increased to $43,689 thousand as of February 2024 from $37,165 thousand in 2023[664] - Intangibles decreased to $43,060 thousand as of February 2024 from $47,072 thousand in 2023[664] - Property and equipment decreased to $101,796 thousand as of February 2024 from $113,015 thousand in 2023[664] - Inventory increased to $18,933 thousand as of February 2024 from $14,512 thousand in 2023[664] - Derivatives decreased to $33,933 thousand as of February 2024 from $54,672 thousand in 2023[664] Revenue and Expenses - Extended protection plan revenues for 2024 were $401.8 million, down from $422.3 million in 2023 and $478.4 million in 2022[626] - Advertising and subscription revenues for 2024 were $135.8 million, slightly up from $133.3 million in 2023[626] - Total other sales and revenues for 2024 were $638.0 million, down from $660.8 million in 2023 and $699.5 million in 2022[626] - Interest and fee income increased to $1,677.4 million in 2024, up 9.7% from $1,441.5 million in 2023[633] - Total interest margin after provision for loan losses decreased to $728.2 million in 2024, down from $814.2 million in 2023[633] - CarMax Auto Finance income declined to $568.3 million in 2024, compared to $663.4 million in 2023[633] - Provision for loan losses was $310.5 million in 2024, slightly lower than $317.0 million in 2023[633] - Total direct expenses increased to $159.9 million in 2024, up from $150.8 million in 2023[633] - Total advertising expenses decreased to $265.6 million in fiscal 2024 from $295.6 million in fiscal 2023[563] - Share-based compensation expense increased to $70.96 million in fiscal 2024 from $62.03 million in fiscal 2023[574] - Repurchases of common stock totaled $91.41 million in fiscal 2024, down from $323.24 million in fiscal 2023[574] - Retained earnings grew to $4.13 billion in fiscal 2024 from $3.72 billion in fiscal 2023[574] - Accumulated other comprehensive income decreased to $59.28 million in fiscal 2024 from $97.87 million in fiscal 2023[574] - Total equity increased to $6.07 billion in fiscal 2024 from $5.61 billion in fiscal 2023[574] - Amortization expense of intangible assets remained consistent at $15.4 million in both fiscal 2024 and 2023[660] - The company recognized a $20.8 million expense in CAF income for changes in fair value of derivatives for the year ended February 29, 2024[615] - The company estimates that $48.5 million will be reclassified from AOCI to CAF income in the next 12 months[615]