CarMax(US:KMX)2025-06-20 14:02Financial Data and Key Metrics Changes - The company reported total sales of $7.5 billion, a 6% increase year-over-year, driven by higher volume despite lower prices [7][17] - Earnings per diluted share reached $1.38, marking a 42% increase compared to the previous year [17] - Total gross profit was $894 million, up 13% from the same quarter last year [17][18] - The company achieved a 42% growth in earnings per share, marking the fourth consecutive quarter of positive retail unit comps and double-digit year-over-year EPS growth [7][26] Business Line Data and Key Metrics Changes - Retail unit sales increased by 9%, with used unit comps up 8.1% [7][8] - Retail gross profit per used unit reached a record high of $2,407, an increase of $60 year-over-year [18] - Wholesale unit sales were up 1.2%, while average wholesale selling price declined by approximately $150 to $8,000 [8][18] - CarMax Auto Finance (CAF) originated over $2.3 billion, resulting in a sales penetration of 41.8%, which was 150 basis points below last year [11][12] Market Data and Key Metrics Changes - The company purchased approximately 336,000 vehicles during the quarter, a 7% increase from last year [8] - The digital capability supported 80% of retail unit sales, with 66% being omni-channel and 14% online [9] - The Net Promoter Score reached its highest level since the rollout of digital capabilities, indicating strong customer satisfaction [10] Company Strategy and Development Direction - The company is focused on enhancing its omni-channel experience and leveraging digital capabilities to drive sales and market share [5][10] - A new marketing campaign is set to launch later in the summer to promote the omni-channel experience and digital capabilities [10][22] - The company aims to achieve omni cost neutrality and improve operational efficiencies through strategic deployment of AI technology [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining sales growth and market share gains despite macroeconomic challenges [36][47] - The company anticipates service margin growth year-over-year, particularly in the first half of the year [23] - Management noted that the consumer sentiment is slightly less positive, but this has not significantly impacted buying habits [131] Other Important Information - The company doubled its share repurchase pace, buying back approximately 3 million shares for a total of $200 million [22] - The loan loss provision for the quarter was $102 million, influenced by seasonal sales and credit quality [12][16] Q&A Session Summary Question: How is the company viewing the sustainability of the recent acceleration in the used car business? - Management feels positive about the acceleration, attributing it to both macro factors and internal improvements in inventory management and pricing [34][36] Question: How should expenses be considered in the model moving forward? - Management emphasized their commitment to leveraging SG&A and finding efficiencies, indicating a focus on maintaining expense control [37][39] Question: How should comp growth be modeled for the balance of the year? - Management expects to continue growing sales and gaining market share, maintaining their outlook for the year [47] Question: Can you provide more color on the shift in non-prime lending? - Management confirmed that the held-for-sale transaction allows them to mitigate risk and supports growth in CAF income [50][55] Question: How is the marketing campaign aimed at increasing awareness of multi-channel capabilities? - The campaign focuses on educating consumers about their options and the flexibility of the buying experience [61][62] Question: How is the company addressing the financial stress of consumers? - Management noted that while consumers are slightly less positive, there has not been a significant impact on buying habits [131]