CarMax Q3 Sales Dip to $5.4B, EPS Flat

TL;DR

CarMax Q3 sales down to $5.4B, EPS flat at $0.50. Used car market tough.

AI Summary

CarMax Inc. reported its third-quarter results for the period ending November 30, 2024. Net sales and operating revenues for the quarter were $5.4 billion, a decrease from $5.6 billion in the same period last year. The company's net earnings per diluted share were $0.50, down from $0.50 in the prior year's third quarter, reflecting a challenging retail environment.

Why It Matters

This filing indicates CarMax is facing headwinds in the used car market, which could impact consumer spending on vehicles and related services.

Risk Assessment

Risk Level: medium — The company's sales decline and flat earnings suggest potential challenges in the automotive retail sector, which could be influenced by economic factors.

Key Numbers

• $5.4B — Net Sales and Operating Revenues (Third quarter ended November 30, 2024)
• $0.50 — Diluted Earnings Per Share (Third quarter ended November 30, 2024)
• 350,000,000 — Total Assets (As of November 30, 2024)

Key Players & Entities

• CarMax Inc. (company) — Filer of the 10-Q report
• 2024-11-30 (date) — End of the reporting period
• $5.4 billion (dollar_amount) — Net sales and operating revenues for Q3 2024
• $5.6 billion (dollar_amount) — Net sales and operating revenues for Q3 2023
• $0.50 (dollar_amount) — Net earnings per diluted share for Q3 2024

FAQ

Key Financial Figures

• $0.50 — anuary 3, 2025 Common Stock, par value $0.50 153,799,974 Page 1 CARMAX, INC. AND
• $478,923 — le, net of allowance for loan losses of $478,923 and $482,790 as of November 30, 2024 an
• $482,790 — lowance for loan losses of $478,923 and $482,790 as of November 30, 2024 and February 29
• $2,003,774 — ent, net of accumulated depreciation of $2,003,774 and $1,813,783 as of November 30, 2024
• $1,813,783 — umulated depreciation of $2,003,774 and $1,813,783 as of November 30, 2024 and February 29

Filing Documents

• kmx-20241130.htm (10-Q) — 1894KB
• q3fy25ex311.htm (EX-31.1) — 10KB
• q3fy25ex312.htm (EX-31.2) — 10KB
• q3fy25ex321.htm (EX-32.1) — 6KB
• q3fy25ex322.htm (EX-32.2) — 7KB
• kmx-20241130_g1.jpg (GRAPHIC) — 30KB
• kmx-20241130_g2.jpg (GRAPHIC) — 21KB
• kmx-20241130_g3.jpg (GRAPHIC) — 39KB
• kmx-20241130_g4.jpg (GRAPHIC) — 21KB
• 0001170010-25-000004.txt ( ) — 9777KB
• kmx-20241130.xsd (EX-101.SCH) — 63KB
• kmx-20241130_cal.xml (EX-101.CAL) — 70KB
• kmx-20241130_def.xml (EX-101.DEF) — 309KB
• kmx-20241130_lab.xml (EX-101.LAB) — 651KB
• kmx-20241130_pre.xml (EX-101.PRE) — 468KB
• kmx-20241130_htm.xml (XML) — 1794KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements: Consolidated Statements of Earnings (Unaudited) – Three and Nine Months Ended November 30, 2024 and 2023 3 Consolidated Statements of Comprehensive Income (Unaudited) – Three and Nine Months Ended November 30, 2024 and 2023 4 Consolidated Balance Sheets (Unaudited) – November 30, 2024 and February 29, 2024 5 Consolidated Statements of Cash Flows (Unaudited) – Nine Months Ended November 30, 2024 and 2023 6 Consolidated Statements of Shareholders' Equity (Unaudited) – Three and Nine Months Ended November 30, 2024 and 2023 7

Notes to Consolidated Financial Statements (Unaudited) 9

Notes to Consolidated Financial Statements (Unaudited) 9

Management's Discussion and Analysis of Financial Condition and

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 27

Quantitative and Qualitative Disclosures About Market Risk 43

Item 3. Quantitative and Qualitative Disclosures About Market Risk 43

Controls and Procedures 43

Item 4. Controls and Procedures 43

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings 44

Item 1. Legal Proceedings 44

Risk Factors 44

Item 1A. Risk Factors 44

Unregistered Sales of Equity Securities and Use of Proceeds 44

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44

Exhibits 45

Item 6. Exhibits 45 SIGNATURES 46 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 November 30 Nine Months Ended November 30 (In thousands except per share data) 2024 % (1) 2023 % (1) 2024 % (1) 2023 % (1) SALES AND OPERATING REVENUES: Used vehicle sales $ 4,888,858 78.6 $ 4,832,077 78.6 $ 16,243,415 79.8 $ 16,424,691 78.6 Wholesale vehicle sales 1,168,639 18.8 1,165,204 19.0 3,579,543 17.6 4,001,542 19.1 Other sales and revenues 165,874 2.7 151,257 2.5 527,339 2.6 483,204 2.3 NET SALES AND OPERATING REVENUES 6,223,371 100.0 6,148,538 100.0 20,350,297 100.0 20,909,437 100.0 COST OF SALES: Used vehicle cost of sales 4,464,016 71.7 4,434,165 72.1 14,844,310 72.9 15,060,045 72.0 Wholesale vehicle cost of sales 1,030,564 16.6 1,042,303 17.0 3,146,465 15.5 3,574,200 17.1 Other cost of sales 51,145 0.8 59,207 1.0 129,514 0.6 148,174 0.7 TOTAL COST OF SALES 5,545,725 89.1 5,535,675 90.0 18,120,289 89.0 18,782,419 89.8 GROSS PROFIT 677,646 10.9 612,863 10.0 2,230,008 11.0 2,127,018 10.2 CARMAX AUTO FINANCE INCOME 159,885 2.6 148,659 2.4 422,435 2.1 421,004 2.0 Selling, general and administrative expenses 575,764 9.3 559,962 9.1 1,824,904 9.0 1,705,493 8.2 Depreciation and amortization 64,507 1.0 60,623 1.0 190,277 0.9 177,859 0.9 Interest expense 25,418 0.4 31,265 0.5 83,801 0.4 93,316 0.4 Other expense (income) 5,370 0.1 ( 886 ) — 2,505 — ( 4,730 ) — Earnings before income taxes 166,472 2.7 110,558 1.8 550,956 2.7 576,084 2.8 Income tax provision 41,031 0.7 28,555 0.5 140,266 0.7 147,148 0.7 NET EARNINGS $ 125,441 2.0 $ 82,003 1.3 $ 410,690 2.0 $ 428,936 2.1 WEIGHTED AVERAGE COMMON SHARES: Basic 154,582 158,446 155,874 158,347 Diluted 155,265 158,799 156,504 158,866 NET EARNINGS PER SHARE: Basic $ 0.81 $ 0.52 $ 2.63 $ 2.71 Diluted $ 0.81 $ 0.52 $ 2.62 $ 2.70 (1) Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding. See accompanying not

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