Financial Data and Key Metrics Changes - The second quarter net earnings per diluted share was $0.64, down from $0.85 a year ago, primarily driven by lower volume and a CarMax Auto Finance (CAF) loss provision adjustment [17][18] - Total gross profit was $718 million, a decrease of 6% from the previous year's second quarter [18] - Retail gross profit per used unit was $2,216, consistent with historical averages, while wholesale gross profit per unit was $993, showing a slight decrease [18][19] Business Line Data and Key Metrics Changes - Total sales for the quarter were $6.6 billion, down 6% year-over-year, with retail unit sales declining by 5.4% and used unit comps down 6.3% [8][9] - Wholesale unit sales decreased by 2.2% compared to the second quarter last year, but the average wholesale selling price increased by approximately $125 per unit to $7,900 [9][10] - CarMax Auto Finance originated over $2 billion, resulting in a sales penetration of 42.6%, which was 60 basis points above last year [13] Market Data and Key Metrics Changes - The average selling price of used vehicles was $26,000, reflecting a year-over-year decrease of approximately $250 per unit [9] - The company noted a pullback in demand from mid to high FICO customers, indicating a potential strain on consumer sentiment [75][94] Company Strategy and Development Direction - The company is focused on driving sales, gaining market share, and delivering significant year-over-year earnings growth, with key priorities including price competitiveness, consumer awareness, and SG&A reductions of at least $150 million over the next 18 months [5][7][11] - The "Wanna Drive?" brand campaign aims to enhance the omnichannel customer experience and increase brand awareness [10][11] - The company plans to continue investing in technology and operational efficiencies to support its growth objectives while maintaining a disciplined approach to pricing [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the second quarter results fell short of expectations but expressed confidence in the strategy and earnings model, projecting high teens EPS growth with mid-single-digit retail unit growth [5][21] - The management highlighted that while the consumer environment remains aggressive, they are positioned well to gain market share and improve sales performance in the upcoming quarters [75][76] Other Important Information - The company repurchased approximately 2.9 million shares for a total expenditure of $180 million during the second quarter, with $1.56 billion remaining in the repurchase authorization [22] - The deployment of AI technology, such as the Sky virtual assistant, has led to significant improvements in operational efficiency and customer experience [19][20] Q&A Session Summary Question: Impact of pull forward demand on used unit sales - Management indicated that both inventory depreciation and pull forward demand were significant factors affecting sales, with September showing stronger performance compared to the second quarter [27][28] Question: Pricing strategy and market competitiveness - Management confirmed a renewed focus on competitive pricing, acknowledging that they were less competitive in the previous quarter but are now in a better position [31][32] Question: Update on CarMax Auto Finance income expectations - Management revised expectations for CAF income to be flat to slightly down year-over-year due to a larger provision impact this quarter [38][39] Question: Areas of cost reduction in SG&A - Management emphasized that cost reductions would not impact growth strategy and would be reinvested into areas that drive sales, such as marketing [43][48] Question: Consumer sentiment and market conditions - Management noted that mid to high FICO customers are currently more cautious, impacting app volume and sales, but they remain committed to gaining market share [75][94] Question: Reserved inventory policy and its effects on sales - Management clarified that reserved inventory is beneficial for customer interest but acknowledged the need to manage how long a vehicle can be held in reserve [99][100]