CarMax Q1 Sales Dip Slightly to $5.7B

TL;DR

CarMax Q1 sales down slightly to $5.7B. Used car market still tough.

AI Summary

CarMax Inc. reported its first quarter results for the period ending May 31, 2024. The company's net sales and operating revenues for the Used Vehicles segment were $5.7 billion in Q1 2025, a decrease from $5.8 billion in Q1 2024. Total net sales and operating revenues for the quarter were $5.7 billion, down from $5.8 billion year-over-year.

Why It Matters

This filing indicates a slight decrease in CarMax's top-line revenue, which could signal challenges in the used car market or reflect broader economic conditions affecting consumer spending on vehicles.

Risk Assessment

Risk Level: medium — The slight decrease in sales suggests potential headwinds in the automotive retail sector, which could impact future performance.

Key Numbers

• $5.7B — Net Sales and Operating Revenues (Q1 2025) (Represents the total revenue generated by CarMax in the first quarter of fiscal year 2025.)
• $5.8B — Net Sales and Operating Revenues (Q1 2024) (Represents the total revenue generated by CarMax in the first quarter of fiscal year 2024, used for year-over-year comparison.)
• $5.7B — Used Vehicles Net Sales (Q1 2025) (Specific revenue from used vehicle sales in the current quarter.)
• $5.8B — Used Vehicles Net Sales (Q1 2024) (Specific revenue from used vehicle sales in the prior year's quarter for comparison.)

Key Players & Entities

• CarMax Inc. (company) — Filer of the 10-Q report
• May 31, 2024 (date) — End of the reporting period
• $5.7 billion (dollar_amount) — Net sales and operating revenues for Used Vehicles in Q1 2025
• $5.8 billion (dollar_amount) — Net sales and operating revenues for Used Vehicles in Q1 2024

FAQ

Key Financial Figures

• $0.50 — June 25, 2024 Common Stock, par value $0.50 156,078,952 Page 1 CARMAX, INC. AND
• $493,064 — le, net of allowance for loan losses of $493,064 and $482,790 as of May 31, 2024 and Feb
• $482,790 — lowance for loan losses of $493,064 and $482,790 as of May 31, 2024 and February 29, 202
• $1,877,474 — ent, net of accumulated depreciation of $1,877,474 and $1,813,783 as of May 31, 2024 and F
• $1,813,783 — umulated depreciation of $1,877,474 and $1,813,783 as of May 31, 2024 and February 29, 202

Filing Documents

• kmx-20240531.htm (10-Q) — 1579KB
• q1fy25ex311.htm (EX-31.1) — 10KB
• q1fy25ex312.htm (EX-31.2) — 10KB
• q1fy25ex321.htm (EX-32.1) — 6KB
• q1fy25ex322.htm (EX-32.2) — 7KB
• kmx-20240531_g1.jpg (GRAPHIC) — 30KB
• kmx-20240531_g2.jpg (GRAPHIC) — 22KB
• kmx-20240531_g3.jpg (GRAPHIC) — 39KB
• 0001170010-24-000087.txt ( ) — 9832KB
• kmx-20240531.xsd (EX-101.SCH) — 70KB
• kmx-20240531_cal.xml (EX-101.CAL) — 69KB
• kmx-20240531_def.xml (EX-101.DEF) — 428KB
• kmx-20240531_lab.xml (EX-101.LAB) — 723KB
• kmx-20240531_pre.xml (EX-101.PRE) — 581KB
• kmx-20240531_htm.xml (XML) — 1657KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements: Consolidated Statements of Earnings (Unaudited) – Three Months Ended May 31, 2024 and 2023 3 Consolidated Statements of Comprehensive Income (Unaudited) – Three Months Ended May 31, 2024 and 2023 4 Consolidated Balance Sheets (Unaudited) – May 31, 2024 and February 29, 2024 5 Consolidated Statements of Cash Flows (Unaudited) – Three Months Ended May 31, 2024 and 2023 6 Consolidated Statements of Shareholders' Equity (Unaudited) – Three Months Ended May 31, 2024 and 2023 7

Notes to Consolidated Financial Statements (Unaudited) 8

Notes to Consolidated Financial Statements (Unaudited) 8

Management's Discussion and Analysis of Financial Condition and

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 30

Quantitative and Qualitative Disclosures About Market Risk 45

Item 3. Quantitative and Qualitative Disclosures About Market Risk 45

Controls and Procedures 45

Item 4. Controls and Procedures 45

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings 46

Item 1. Legal Proceedings 46

Risk Factors 46

Item 1A. Risk Factors 46

Unregistered Sales of Equity Securities and Use of Proceeds 46

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46

Exhibits 47

Item 6. Exhibits 47 SIGNATURES 48 Page 2

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CARMAX, INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) Three Months Ended May 31 (In thousands except per share data) 2024 % (1) 2023 % (1) SALES AND OPERATING REVENUES: Used vehicle sales $ 5,677,476 79.8 $ 6,001,471 78.1 Wholesale vehicle sales 1,256,439 17.7 1,514,363 19.7 Other sales and revenues 179,482 2.5 171,229 2.2 NET SALES AND OPERATING REVENUES 7,113,397 100.0 7,687,063 100.0 COST OF SALES: Used vehicle cost of sales 5,181,979 72.8 5,486,846 71.4 Wholesale vehicle cost of sales 1,099,311 15.5 1,346,538 17.5 Other cost of sales 40,212 0.6 36,289 0.5 TOTAL COST OF SALES 6,321,502 88.9 6,869,673 89.4 GROSS PROFIT 791,895 11.1 817,390 10.6 CARMAX AUTO FINANCE INCOME 146,970 2.1 137,358 1.8 Selling, general and administrative expenses 638,578 9.0 559,837 7.3 Depreciation and amortization 61,869 0.9 58,419 0.8 Interest expense 31,362 0.4 30,466 0.4 Other expense (income) 416 — ( 1,214 ) — Earnings before income taxes 206,640 2.9 307,240 4.0 Income tax provision 54,200 0.8 78,942 1.0 NET EARNINGS $ 152,440 2.1 $ 228,298 3.0 WEIGHTED AVERAGE COMMON SHARES: Basic 157,161 158,116 Diluted 157,706 158,561 NET EARNINGS PER SHARE: Basic $ 0.97 $ 1.44 Diluted $ 0.97 $ 1.44 (1) Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding. See accompanying notes to consolidated financial statements. Page 3 CARMAX, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended May 31 (In thousands) 2024 2023 NET EARNINGS $ 152,440 $ 228,298 Other comprehensive income (loss), net of taxes: Net change in retirement benefit plan unrecognized actuarial losses 84 98 Net change in cash flow hedge unrecognized gains 2,315 ( 36,637 ) Other comprehensive income (loss), net of taxes 2,399 ( 36,539 ) TOTAL COMPREHENSIVE INCOME $ 154,839 $ 191,759 See accompanying notes to consolidated financia

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements ( Unaudited ) 1. Background Business. CarMax, Inc. ("we," "our," "us," "CarMax" and "the company"), including its wholly owned subsidiaries, is the nation's largest retailer of used vehicles. We operate in two reportable segments: CarMax Sales Operations and CarMax Auto Finance ("CAF"). Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF. Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax. On June 1, 2021, we completed the acquisition of Edmunds Holding Company ("Edmunds"). At that time, Edmunds was identified as a non-reportable operating segment and has been presented as "Other" in the Segment Information footnote in our prior period financial statements. Since the acquisition, Edmunds' business strategy has become increasingly integrated with that of CarMax Sales Operations. Beginning in the first quarter of fiscal 2025, the chief operating decision maker ("CODM") assessed the financial performance related to Edmunds' operations together with the rest of the CarMax Sales Operations segment. As a result, as of May 31, 2024, the company realigned its operating segments to be consistent with the manner in which the CODM assesses performance and makes resource allocations. The company now operates in two operating segments, CarMax Sales Operations and CAF, both of which continue to be reportable segments. The operating segment change did not impact the company's consolidated financial statements but did impact our previous segment footnote disclosure. The Segment Information footnote is no longer presented, as the previous disclosures were for the purpose of presenting the Edmunds operating segment separate from CarMax Sales Operations. The current and prior period required disclosures related to our reportable segments are included elsewhere wit