Carmax Experiences Third Quarter Fiscal 2023 Outcomes
RICHMOND, Va.,–(BUSINESS WIRE)–
CarMax, Inc. (NYSE:KMX) right now reported outcomes for the third quarter ended November 30, 2022.
Highlights:
- Internet revenues of $6.5 billion, down 23.7% in contrast with the prior yr third quarter.
- Whole retail used items offered decreased 20.8%, whereas used unit gross sales in comparable shops had been down 22.4%; power in margin administration delivered strong gross revenue per retail used unit of $2,237, in keeping with the prior yr third quarter.
- Whole wholesale items offered decreased 36.7%; regardless of a lower of $165 per unit from the report prior yr third quarter, wholesale gross revenue per unit remained sturdy at $966. Each quantity and margins had been impacted by steep market depreciation in addition to retail selectivity.
- Purchased 238,000 autos from customers and sellers, down 39.8% versus final yr’s report third quarter, attributable to steep market depreciation and our response to intentionally sluggish buys.
- CarMax Auto Finance (CAF) revenue of $152.2 million, down 8.3% from the prior yr third quarter attributable to compression within the internet curiosity margin proportion and a better provision for mortgage losses, primarily pushed by the enlargement of Tier 2 and Tier 3 originations inside CAF’s portfolio, partially offset by a rise in common managed receivables.
- Accomplished the nationwide rollout of our industry-leading, multi-lender pre-qualification finance expertise.
- SG&A of $591.7 million elevated 2.7% or $15.8 million from final yr’s third quarter. Within the prior yr’s third quarter, we obtained a $22.6 million settlement from a category motion lawsuit. Adjusting for that settlement, SG&A bills would have declined 1.1% year-over-year.
- Took deliberate actions in response to the present market situations by decreasing SG&A, growing the combination of older retail autos offered, growing CAF charges, decreasing deliberate capital expenditures, and prudently managing our capital construction, together with pausing share buybacks.
- Internet earnings per diluted share of $0.24, down from $1.63 a yr in the past.
CEO Commentary:
“In response to the continuing pressures throughout the used automotive {industry}, we have now taken deliberate steps to assist our enterprise for each the near-term and the long-term. We’re managing our enterprise prudently, and prioritizing initiatives that cut back prices, unlock working efficiencies, profitably develop market share and create higher experiences for our associates and prospects,” mentioned Invoice Nash, president and chief govt officer. “Because the market chief, we have now spent virtually thirty years constructing a diversified enterprise that may profitably navigate the ups and downs of the used automotive {industry}. We imagine we’re effectively positioned to successfully handle by way of this cycle.”
Third Quarter Enterprise Efficiency Overview:
Gross sales
. Mixed retail and wholesale used automobile unit gross sales had been 298,807, a lower of 28% from the prior yr’s third quarter. On-line retail gross sales(1) accounted for 12% of retail unit gross sales, in contrast with 9% within the third quarter of final yr. Income from on-line transactions(2), together with retail and wholesale unit gross sales, was $1.8 billion, or roughly 28% of internet revenues, a decline from 30% of internet revenues in final yr’s third quarter.
Whole retail used automobile unit gross sales declined 20.8% to 180,050 and comparable retailer used unit gross sales declined 22.4% from the prior yr’s third quarter. We imagine automobile affordability challenges continued to affect our third quarter unit gross sales efficiency, as headwinds stay attributable to widespread inflationary pressures, climbing rates of interest, and low shopper confidence. Exterior title information signifies that we gained market share on a year-to-date foundation by way of October, although we’ve seen some current lack of share. We’re centered on worthwhile market share good points that may be sustained for the long-term. Whole retail used automobile revenues decreased 19.1% in contrast with the prior yr’s third quarter, pushed by the lower in retail used items offered as the typical retail promoting worth was up $535 per unit or 1.9% in comparison with the prior yr.
Whole wholesale automobile unit gross sales decreased 36.7% to 118,757 versus the prior yr’s third quarter. Wholesale quantity was negatively impacted by the quickly altering market situations and retail selectivity, our resolution to shift some items from wholesale to retail to fulfill shopper demand for decrease priced autos. Whole wholesale revenues decreased 40.1% in contrast with the prior yr’s third quarter because of the lower in wholesale items offered and a lower within the common wholesale promoting worth by virtually $600 per unit, or 6.0%.
We purchased 238,000 autos from customers and sellers, down 39.8% versus final yr’s report third quarter attributable to steep market depreciation and our response to intentionally sluggish buys. 224,000 of those autos had been purchased from customers, down 41.6% over final yr’s report outcomes. The remaining 14,000 of those autos had been purchased by way of MaxOffer, our digital appraisal product for sellers, up 15.8% over final yr’s third quarter.
Different gross sales and revenues declined by 12.2% in contrast with the third quarter of fiscal 2022, representing a lower of $20.7 million. The lower was primarily pushed by a $14.8 million decline in prolonged safety plan (EPP) revenues reflecting the mixed results of the decline in retail unit gross sales, stronger margins, favorable year-over-year return reserve adjustment and steady penetration.
Gross Revenue
. Whole gross revenue was $576.7 million, down 31.1% versus final yr’s third quarter. Retail used automobile gross revenue declined 20.8%, reflecting the decline in retail unit gross sales. Retail gross revenue per used unit was $2,237, in keeping with the prior yr.
Wholesale automobile gross revenue decreased 46.0% versus the prior yr’s quarter, reflecting decrease wholesale unit quantity and gross revenue per unit, which declined $165 to $966. Gross revenue per unit was impacted by steep market depreciation in addition to retail selectivity.
Different gross revenue declined 49.0% largely reflecting a discount in service division margins and EPP revenues. Service margins declined primarily attributable to continued deleverage ensuing from the discount in retail unit gross sales and by our resolution to take care of technician staffing by way of the present cycle.
SG&A
. In contrast with the third quarter of fiscal 2022, SG&A bills elevated 2.7% to $591.7 million. Within the prior yr’s third quarter, we obtained a $22.6 million settlement from a category motion lawsuit. Adjusting for that settlement, SG&A bills would have declined 1.1% year-over-year. This discount displays deliberate steps to additional cut back prices by managing workers ranges by way of attrition in our shops and CECs, limiting hiring and contractor utilization in our company places of work, and aligning advertising and marketing spend to gross sales. Compensation and advantages additionally included a lower in share-based compensation, which largely mirrored modifications within the firm’s share worth. Whole SG&A bills included will increase in investments to advance our know-how platforms and strategic initiatives in addition to progress associated prices. SG&A as a % of gross revenue was 102.6%, versus 68.8% within the prior yr’s third quarter, which was primarily pushed by the 31.1% lower in gross margin {dollars}, and doesn’t replicate the run-rate of the actions we took to cut back prices throughout the quarter.
CarMax Auto Finance
.(3) CAF revenue decreased 8.3% to $152.2 million, pushed by the decline in CAF’s internet curiosity margin proportion and a $9.5 million year-over-year enhance within the provision for mortgage losses, which outweighed the expansion in CAF’s common managed receivables. This quarter’s provision was $85.7 million in comparison with $76.2 million final yr.
As of November 30, 2022, the allowance for mortgage losses was 2.95% of ending managed receivables, up from 2.92% as of August 30, 2022. The rise within the allowance proportion primarily mirrored the impact of the beforehand disclosed enlargement of Tier 2 and Tier 3 originations inside CAF’s portfolio.
CAF’s complete curiosity margin proportion, which represents the unfold between curiosity and charges charged to customers and our funding prices, was 6.7% of common managed receivables, down from 7.2% within the prior yr’s third quarter as will increase in our buyer charges had been offset by the rising value of funds. After the impact of 3-day payoffs, CAF financed 44.4% of items offered within the present quarter up from 41.2% within the second quarter and from 42.2% within the prior yr’s third quarter. CAF’s weighted common contract charge elevated to 9.8% within the quarter up from 8.3% within the third quarter final yr.
Share Repurchase Exercise
. Given third quarter efficiency and continued market uncertainties, we’re taking a conservative strategy to our capital construction. Accordingly, we have now paused our share repurchases. Throughout the third quarter of fiscal 2023, we repurchased 30,000 shares of frequent inventory for $2.6 million pursuant to our share repurchase program earlier than pausing further purchases. As of November 30, 2022, we had $2.45 billion remaining out there for repurchase beneath the excellent authorization. We stay dedicated to returning capital again to shareholders over time and should resume share repurchases sooner or later at any time relying upon market situations and our capital wants, amongst different components.
Retailer Openings
. Throughout the third quarter of fiscal 2023, we opened one new retail location in Oceanside, California. In fiscal 2023, we plan to open a complete of ten new areas throughout the nation. For fiscal 2024, we’re planning new retailer progress of 5 areas; nonetheless, we are able to increase our plans if market situations change.
Fiscal 2023 Capital Spending Outlook.
We anticipate capital expenditures will finish the fiscal yr at roughly $450 million versus our earlier estimate of $500 million.
| (1) |
A web-based retail unit sale is outlined as a sale the place the shopper completes all 4 of those main transactional actions remotely: reserving the automobile; financing the automobile, if wanted; trading-in or opting out of a commerce in; and making a distant gross sales order. |
| (2) |
Income from on-line transactions is outlined as income from retail gross sales that qualify for an internet retail sale, in addition to any EPP and third-party finance contribution, wholesale gross sales the place the successful bid was an internet bid, and all income earned by Edmunds. |
| (3) |
Though CAF advantages from sure oblique overhead expenditures, we have now not allotted oblique prices to CAF to keep away from making subjective allocation selections. |
Supplemental Monetary Data
Quantities and proportion calculations could not complete attributable to rounding.
|
|
||||||||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
|||||||||||||||
|
(In hundreds of thousands) |
|
2022 |
|
|
2021 |
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
||
|
Used automobile gross sales |
$ |
5,204.6 |
|
$ |
6,435.6 |
|
(19.1 |
) % |
|
$ |
18,503.2 |
|
$ |
18,697.3 |
|
|
(1.0 |
) % |
|
Wholesale automobile gross sales |
|
1,152.2 |
|
|
1,922.3 |
|
(40.1 |
) % |
|
|
4,959.1 |
|
|
4,998.2 |
|
|
(0.8 |
) % |
|
Different gross sales and revenues: |
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Prolonged safety plan revenues |
|
91.8 |
|
|
106.6 |
|
(13.9 |
) % |
|
|
318.1 |
|
|
353.8 |
|
|
(10.1 |
) % |
|
Third-party finance revenue/(charges), internet |
|
1.0 |
|
|
1.6 |
|
(38.2 |
) % |
|
|
7.1 |
|
|
(0.3 |
) |
|
2,825.4 |
% |
|
Promoting & subscription revenues (1) |
|
33.3 |
|
|
33.3 |
|
(0.2 |
) % |
|
|
101.9 |
|
|
67.9 |
|
|
50.2 |
% |
|
Different |
|
23.1 |
|
|
28.4 |
|
(18.6 |
) % |
|
|
73.1 |
|
|
96.8 |
|
|
(24.4 |
) % |
|
Whole different gross sales and revenues |
|
149.2 |
|
|
169.9 |
|
(12.2 |
) % |
|
|
500.2 |
|
|
518.2 |
|
|
(3.5 |
) % |
|
Whole internet gross sales and working revenues |
$ |
6,506.0 |
|
$ |
8,527.8 |
|
(23.7 |
) % |
|
$ |
23,962.4 |
|
$ |
24,213.7 |
|
|
(1.0 |
) % |
|
|
|
|
|||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||||||
|
|
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
||
|
Used autos |
180,050 |
|
227,424 |
|
(20.8 |
) % |
|
637,939 |
|
730,020 |
|
(12.6 |
) % |
|
Wholesale autos |
118,757 |
|
187,630 |
|
(36.7 |
) % |
|
464,741 |
|
557,117 |
|
(16.6 |
) % |
|
|
|||||||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||||||||||
|
|
|
2022 |
|
|
2021 |
|
Change |
|
|
2022 |
|
|
2021 |
|
Change |
||
|
Used autos |
$ |
28,530 |
|
$ |
27,995 |
|
1.9 |
% |
|
$ |
28,692 |
|
$ |
25,380 |
|
13.0 |
% |
|
Wholesale autos |
$ |
9,294 |
|
$ |
9,890 |
|
(6.0 |
) % |
|
$ |
10,280 |
|
$ |
8,634 |
|
19.1 |
% |
|
|
|||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||
|
|
2022 |
2021 |
|
2022 |
2021 |
||||
|
Used automobile items |
(20.8 |
) % |
16.9 |
% |
|
(12.6 |
) % |
33.5 |
% |
|
Used automobile revenues |
(19.1 |
) % |
52.9 |
% |
|
(1.0 |
) % |
64.2 |
% |
|
|
|
|
|
|
|
||||
|
Wholesale automobile items |
(36.7 |
) % |
48.5 |
% |
|
(16.6 |
) % |
72.7 |
% |
|
Wholesale automobile revenues |
(40.1 |
) % |
132.1 |
% |
|
(0.8 |
) % |
151.1 |
% |
|
|
|||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||
|
|
2022 |
2021 |
|
2022 |
2021 |
||||
|
Used automobile items |
(22.4 |
) % |
15.8 |
% |
|
(14.3 |
) % |
32.5 |
% |
|
Used automobile revenues |
(21.0 |
) % |
51.4 |
% |
|
(3.2 |
) % |
63.4 |
% |
|
|
Shops are added to the comparable retailer base starting of their fourteenth full month of operation. Comparable retailer calculations embrace outcomes for a set of shops that had been included in our comparable retailer base in each the present and corresponding prior yr durations. |
|
|
|||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
CAF (2) |
47.3 |
% |
|
46.1 |
% |
|
44.9 |
% |
|
46.6 |
% |
|
Tier 2 (3) |
20.5 |
% |
|
22.2 |
% |
|
22.6 |
% |
|
22.2 |
% |
|
Tier 3 (4) |
6.1 |
% |
|
6.5 |
% |
|
6.4 |
% |
|
8.0 |
% |
|
Different (5) |
26.1 |
% |
|
25.2 |
% |
|
26.1 |
% |
|
23.2 |
% |
|
Whole |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
|
Calculated as used automobile items financed for respective channel as a proportion of complete used items offered. |
|
|
Contains CAF’s Tier 2 and Tier 3 mortgage originations, which signify roughly 1% of complete used items offered. |
|
|
Third-party finance suppliers who typically pay us a price or to whom no price is paid. |
|
|
Third-party finance suppliers to whom we pay a price. |
|
|
Represents prospects arranging their very own financing and prospects that don’t require financing. |
|
|
|||||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||||||||
|
(In hundreds of thousands) |
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
Internet gross sales and working revenues |
$ |
6,506.0 |
100.0 |
|
$ |
8,527.8 |
100.0 |
|
$ |
23,962.4 |
100.0 |
|
$ |
24,213.7 |
100.0 |
|
Gross revenue |
$ |
576.7 |
8.9 |
|
$ |
836.6 |
9.8 |
|
$ |
2,189.2 |
9.1 |
|
$ |
2,576.6 |
10.6 |
|
CarMax Auto Finance revenue |
$ |
152.2 |
2.3 |
|
$ |
166.0 |
1.9 |
|
$ |
539.5 |
2.3 |
|
$ |
607.7 |
2.5 |
|
Promoting, basic, and administrative bills |
$ |
591.7 |
9.1 |
|
$ |
575.9 |
6.8 |
|
$ |
1,914.5 |
8.0 |
|
$ |
1,704.3 |
7.0 |
|
Curiosity expense |
$ |
30.2 |
0.5 |
|
$ |
24.3 |
0.3 |
|
$ |
91.7 |
0.4 |
|
$ |
67.2 |
0.3 |
|
Earnings earlier than revenue taxes |
$ |
50.0 |
0.8 |
|
$ |
356.0 |
4.2 |
|
$ |
554.2 |
2.3 |
|
$ |
1,291.1 |
5.3 |
|
Internet earnings |
$ |
37.6 |
0.6 |
|
$ |
269.4 |
3.2 |
|
$ |
415.8 |
1.7 |
|
$ |
991.5 |
4.1 |
|
|
|
|
||||||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
|||||||||||||
|
(In hundreds of thousands) |
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
|||||
|
Used automobile gross revenue |
$ |
402.8 |
|
$ |
508.4 |
|
(20.8 |
) % |
|
$ |
1,461.3 |
|
$1,611.9 |
|
(9.3 |
) % |
|
Wholesale automobile gross revenue |
|
114.7 |
|
|
212.2 |
|
(46.0 |
) % |
|
|
447.0 |
|
587.0 |
|
(23.9 |
) % |
|
Different gross revenue |
|
59.2 |
|
|
116.0 |
|
(49.0 |
) % |
|
|
280.9 |
|
377.7 |
|
(25.6 |
) % |
|
Whole |
$ |
576.7 |
|
$ |
836.6 |
|
(31.1 |
) % |
|
$ |
2,189.2 |
|
$2,576.6 |
|
(15.0 |
) % |
|
|
|
|
|||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||||||
|
|
2022 |
2021 |
|
2022 |
2021 |
||||||||
|
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
|
$ per unit(2) |
%(3) |
$ per unit(2) |
%(3) |
||||
|
Used automobile gross revenue |
$ |
2,237 |
7.7 |
$ |
2,235 |
7.9 |
|
$ |
2,291 |
7.9 |
$ |
2,208 |
8.6 |
|
Wholesale automobile gross revenue |
$ |
966 |
10.0 |
$ |
1,131 |
11.0 |
|
$ |
962 |
9.0 |
$ |
1,054 |
11.7 |
|
Different gross revenue |
$ |
329 |
39.7 |
$ |
510 |
68.3 |
|
$ |
440 |
56.2 |
$ |
517 |
72.9 |
|
(1) |
Quantities are internet of intercompany eliminations. These eliminations had the impact of accelerating used automobile gross revenue per unit and wholesale automobile gross revenue per unit and reducing different gross revenue per unit by immaterial quantities. |
|
(2) |
Calculated as class gross revenue divided by its respective items offered, besides the opposite class, which is split by complete used items offered. |
|
(3) |
Calculated as a proportion of its respective gross sales or income. |
|
|
|||||||||||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||||||||||||||
|
(In hundreds of thousands) |
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
||||||||||
|
Compensation and advantages: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Compensation and advantages, excluding share-based compensation expense |
$ |
306.2 |
|
|
$ |
308.3 |
|
|
(0.7 |
) % |
|
$ |
985.2 |
|
|
$ |
891.8 |
|
|
10.5 |
% |
|
Share-based compensation expense |
|
17.2 |
|
|
|
33.3 |
|
|
(48.4 |
) % |
|
|
64.0 |
|
|
|
100.5 |
|
|
(36.3 |
) % |
|
Whole compensation and advantages (2) |
$ |
323.4 |
|
|
$ |
341.6 |
|
|
(5.3 |
) % |
|
$ |
1,049.2 |
|
|
$ |
992.3 |
|
|
5.7 |
% |
|
Occupancy prices |
|
70.1 |
|
|
|
59.3 |
|
|
18.2 |
% |
|
|
204.8 |
|
|
|
165.0 |
|
|
24.2 |
% |
|
Promoting expense |
|
58.7 |
|
|
|
76.1 |
|
|
(22.9 |
) % |
|
|
230.5 |
|
|
|
233.6 |
|
|
(1.3 |
) % |
|
Different overhead prices (3) |
|
139.5 |
|
|
|
98.9 |
|
|
41.0 |
% |
|
|
430.0 |
|
|
|
313.4 |
|
|
37.2 |
% |
|
Whole SG&A bills |
$ |
591.7 |
|
|
$ |
575.9 |
|
|
2.7 |
% |
|
$ |
1,914.5 |
|
|
$ |
1,704.3 |
|
|
12.3 |
% |
|
SG&A as % of gross revenue |
|
102.6 |
% |
|
|
68.8 |
% |
|
33.8 |
% |
|
|
87.5 |
% |
|
|
66.1 |
% |
|
21.4 |
% |
|
|
Quantities are internet of intercompany eliminations. |
|
|
Excludes compensation and advantages associated to reconditioning and automobile restore service, that are included in value of gross sales. |
|
|
Contains IT bills, non-CAF dangerous debt, insurance coverage, preopening and relocation prices, charitable contributions, journey and different administrative bills. |
|
|
|||||||||||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||||||||||||||
|
(In hundreds of thousands) |
2022 |
% |
2021 |
% |
|
2022 |
% |
2021 |
% |
||||||||||||
|
Curiosity margin: |
|
|
|
|
|
|
|
|
|
||||||||||||
|
Curiosity and price revenue |
$ |
365.4 |
|
8.8 |
|
$ |
330.0 |
|
8.6 |
|
|
$ |
1,069.3 |
|
8.8 |
|
$ |
964.4 |
|
8.7 |
|
|
Curiosity expense |
|
(88.8 |
) |
(2.1 |
) |
|
(53.6 |
) |
(1.4 |
) |
|
|
(200.1 |
) |
(1.6 |
) |
|
(180.0 |
) |
(1.6 |
) |
|
Whole curiosity margin |
|
276.6 |
|
6.7 |
|
|
276.4 |
|
7.2 |
|
|
|
869.2 |
|
7.2 |
|
|
784.4 |
|
7.1 |
|
|
Provision for mortgage losses |
|
(85.7 |
) |
(2.1 |
) |
|
(76.2 |
) |
(2.0 |
) |
|
|
(219.0 |
) |
(1.8 |
) |
|
(87.3 |
) |
(0.8 |
) |
|
Whole curiosity margin after provision for mortgage losses |
|
190.9 |
|
4.6 |
|
|
200.2 |
|
5.2 |
|
|
|
650.2 |
|
5.4 |
|
|
697.1 |
|
6.3 |
|
|
Whole direct bills |
|
(38.8 |
) |
(0.9 |
) |
|
(34.3 |
) |
(0.9 |
) |
|
|
(110.7 |
) |
(0.9 |
) |
|
(89.4 |
) |
(0.8 |
) |
|
CarMax Auto Finance revenue |
$ |
152.2 |
|
3.7 |
|
$ |
166.0 |
|
4.3 |
|
|
$ |
539.5 |
|
4.4 |
|
$ |
607.7 |
|
5.5 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Whole common managed receivables |
$ |
16,540.2 |
|
|
$ |
15,288.8 |
|
|
|
$ |
16,177.8 |
|
|
$ |
14,706.9 |
|
|
||||
|
Internet loans originated |
$ |
2,147.2 |
|
|
$ |
2,420.3 |
|
|
|
$ |
6,928.0 |
|
|
$ |
7,276.1 |
|
|
||||
|
Internet penetration charge |
|
44.4 |
% |
|
|
42.2 |
% |
|
|
|
41.4 |
% |
|
|
43.0 |
% |
|
||||
|
Weighted common contract charge |
|
9.8 |
% |
|
|
8.3 |
% |
|
|
|
9.4 |
% |
|
|
8.6 |
% |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Ending allowance for mortgage losses |
$ |
491.0 |
|
|
$ |
426.5 |
|
|
|
$ |
491.0 |
|
|
$ |
426.5 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Warehouse facility data: |
|
|
|
|
|
|
|
|
|
||||||||||||
|
Ending funded receivables |
$ |
3,420.9 |
|
|
$ |
3,155.9 |
|
|
|
$ |
3,420.9 |
|
|
$ |
3,155.9 |
|
|
||||
|
Ending unused capability |
$ |
1,979.1 |
|
|
$ |
1,669.1 |
|
|
|
$ |
1,979.1 |
|
|
$ |
1,669.1 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(1) Annualized proportion of complete common managed receivables. |
|
|
|||||||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
||||||||||||||
|
(In hundreds of thousands besides per share information) |
2022 |
|
2021 |
|
Change |
|
2022 |
|
2021 |
|
Change |
||||||
|
Internet earnings |
$ |
37.6 |
|
$ |
269.4 |
|
(86.1 |
) % |
|
$ |
415.8 |
|
$ |
991.5 |
|
(58.1 |
) % |
|
Diluted weighted common shares excellent |
|
158.5 |
|
|
164.9 |
|
(3.8 |
) % |
|
|
160.2 |
|
|
165.6 |
|
(3.3 |
) % |
|
Internet earnings per diluted share |
$ |
0.24 |
|
$ |
1.63 |
|
(85.3 |
) % |
|
$ |
2.60 |
|
$ |
5.99 |
|
(56.6 |
) % |
Convention Name Data
We’ll host a convention name for buyers at 9:00 a.m. ET right now, December 22, 2022. Home buyers could entry the decision at 1-800-274-8461 (worldwide callers dial 1-203-518-9814). The convention I.D. for each home and worldwide callers is 3170513. A dwell webcast of the decision might be out there on our investor data house web page at buyers.carmax.com.
A replay of the webcast might be out there on the corporate’s web site at buyers.carmax.com by way of April 10, 2023, or by way of phone (for about one week) by dialing 1-800-723-0532 (or 1-402-220-2655 for worldwide entry) and coming into the convention ID 3170513.
Fourth Quarter Fiscal 2023 Earnings Launch Date
We at the moment plan to launch outcomes for the fourth quarter ending February 28, 2023, on Tuesday, April 11, 2023, earlier than the opening of buying and selling on the New York Inventory Change. We plan to host a convention name for buyers at 9:00 a.m. ET on that date. Data on this convention name might be out there on our investor data house web page at buyers.carmax.com in March 2023.
About CarMax
CarMax, the nation’s largest retailer of used autos, revolutionized the automotive retail {industry} by driving integrity, honesty and transparency in each interplay. The corporate presents a very customized expertise with the choice for purchasers to do as a lot, or as little, on-line and in-store as they need. CarMax additionally supplies a wide range of automobile supply strategies, together with house supply, categorical pickup and appointments in its shops. Throughout the fiscal yr ended February 28, 2022, CarMax offered roughly 924,000 used autos and 706,000 wholesale autos at its auctions. As well as, CarMax Auto Finance originated greater than $9 billion in receivables throughout fiscal 2022, including to its practically $16 billion portfolio. CarMax has greater than 230 shops, greater than 30,000 associates, and is proud to have been acknowledged for 18 consecutive years as one of many Fortune 100 Finest Corporations to Work For®. CarMax is dedicated to creating a constructive affect on individuals, communities and the atmosphere. Study extra within the 2022 Accountability Report. For extra data, go to www.carmax.com.
Ahead-Wanting Statements
We warning readers that the statements contained on this launch that aren’t statements of historic truth, together with statements about our future enterprise plans, operations, challenges, alternatives or prospects, together with with out limitation any statements or components relating to anticipated working capability, gross sales, stock, market share, monetary targets, income, margins, bills, liquidity, mortgage originations, capital expenditures, debt obligations or earnings, are forward-looking statements made pursuant to the secure harbor provisions of the Personal Securities Litigation Reform Act of 1995. You possibly can establish these forward-looking statements by means of phrases equivalent to “anticipate,” “imagine,” “may,” “estimate,” “anticipate,” “intend,” “could,” “outlook,” “plan,” “positioned,” “predict,” “ought to,” “goal,” “will” and different related expressions, whether or not within the unfavourable or affirmative. Such forward-looking statements are based mostly upon administration’s present information, expectations and assumptions and contain dangers and uncertainties that would trigger precise outcomes to vary materially from anticipated outcomes. Among the many components that would trigger precise outcomes and outcomes to vary materially from these contained within the forward-looking statements are the next:
- The impact and penalties of the Coronavirus public well being disaster on issues together with U.S. and native economies; our enterprise operations and continuity; the supply of company and shopper financing; the well being and productiveness of our associates; the power of third-party suppliers to proceed uninterrupted service; and the regulatory atmosphere by which we function.
- Adjustments on the whole or regional U.S. financial situations, together with inflationary pressures, climbing rates of interest and the potential affect of Russia’s invasion of Ukraine.
- Adjustments within the availability or value of capital and dealing capital financing, together with modifications associated to the asset-backed securitization market.
- Adjustments within the aggressive panorama and/or our failure to efficiently regulate to such modifications.
- Occasions that injury our status or hurt the notion of the standard of our model.
- Our incapability to understand the advantages related to our omni-channel initiatives and strategic investments.
- Our incapability to recruit, develop and retain associates and keep constructive affiliate relations.
- The lack of key associates from our retailer, regional or company administration groups or a major enhance in labor prices.
- Safety breaches or different occasions that end result within the misappropriation, loss or different unauthorized disclosure of confidential buyer, affiliate or company data.
- Vital modifications in costs of latest and used autos.
- Adjustments in financial situations or different components that end in better credit score losses for CAF’s portfolio of auto loans receivable than anticipated.
- A discount within the availability of or entry to sources of stock or a failure to expeditiously liquidate stock.
- Adjustments in shopper credit score availability offered by our third-party finance suppliers.
- Adjustments within the availability of prolonged safety plan merchandise from third-party suppliers.
- Elements associated to the regulatory and legislative atmosphere by which we function.
- Elements associated to geographic and gross sales progress, together with the lack to successfully handle our progress.
- The failure of or incapability to sufficiently improve key data programs.
- The efficiency of the third-party distributors we depend on for key elements of our enterprise.
- The impact of assorted litigation issues.
- Hostile situations affecting a number of automotive producers, and producer remembers.
- The failure or incapability to understand the advantages related to our strategic transactions.
- The inaccuracy of estimates and assumptions used within the preparation of our monetary statements, or the impact of latest accounting necessities or modifications to U.S. typically accepted accounting rules.
- The volatility available in the market worth for our frequent inventory.
- The failure or incapability to adequately shield our mental property.
- The prevalence of extreme climate occasions.
- Elements associated to the geographic focus of our shops.
For extra particulars on components that would have an effect on expectations, see our Annual Report on Kind 10-Ok for the fiscal yr ended February 28, 2022, and our quarterly or present studies as filed with or furnished to the U.S. Securities and Change Fee. Our filings are publicly out there on our investor data house web page at buyers.carmax.com. Requests for data can also be made to the Investor Relations Division by e-mail to [email protected] or by calling (804) 747-0422 x7865. We undertake no obligation to replace or revise any forward-looking statements after the date they’re made, whether or not on account of new data, future occasions or in any other case.
|
|
||||||||||||||||||||||
|
|
Three Months Ended November 30 |
|
9 Months Ended November 30 |
|||||||||||||||||||
|
(In hundreds besides per share information) |
2022 |
%(1) |
2021 |
%(1) |
|
2022 |
|
%(1) |
|
2021 |
|
%(1) |
||||||||||
|
SALES AND OPERATING REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Used automobile gross sales |
$ |
5,204,584 |
|
80.0 |
$ |
6,435,590 |
|
75.5 |
|
|
$ |
18,503,159 |
|
|
77.2 |
|
$ |
18,697,300 |
|
|
77.2 |
|
|
Wholesale automobile gross sales |
|
1,152,207 |
|
17.7 |
|
1,922,283 |
|
22.5 |
|
|
|
4,959,050 |
|
|
20.7 |
|
|
4,998,212 |
|
|
20.6 |
|
|
Different gross sales and revenues |
|
149,165 |
|
2.3 |
|
169,886 |
|
2.0 |
|
|
|
500,171 |
|
|
2.1 |
|
|
518,205 |
|
|
2.1 |
|
|
NET SALES AND OPERATING REVENUES |
|
6,505,956 |
|
100.0 |
|
8,527,759 |
|
100.0 |
|
|
|
23,962,380 |
|
|
100.0 |
|
|
24,213,717 |
|
|
100.0 |
|
|
COST OF SALES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Used automobile value of gross sales |
|
4,801,790 |
|
73.8 |
|
5,927,237 |
|
69.5 |
|
|
|
17,041,898 |
|
|
71.1 |
|
|
17,085,416 |
|
|
70.6 |
|
|
Wholesale automobile value of gross sales |
|
1,037,534 |
|
15.9 |
|
1,710,103 |
|
20.1 |
|
|
|
4,512,053 |
|
|
18.8 |
|
|
4,411,175 |
|
|
18.2 |
|
|
Different value of gross sales |
|
89,944 |
|
1.4 |
|
53,859 |
|
0.6 |
|
|
|
219,205 |
|
|
0.9 |
|
|
140,573 |
|
|
0.6 |
|
|
TOTAL COST OF SALES |
|
5,929,268 |
|
91.1 |
|
7,691,199 |
|
90.2 |
|
|
|
21,773,156 |
|
|
90.9 |
|
|
21,637,164 |
|
|
89.4 |
|
|
GROSS PROFIT |
|
576,688 |
|
8.9 |
|
836,560 |
|
9.8 |
|
|
|
2,189,224 |
|
|
9.1 |
|
|
2,576,553 |
|
|
10.6 |
|
|
CARMAX AUTO FINANCE INCOME |
|
152,196 |
|
2.3 |
|
165,968 |
|
1.9 |
|
|
|
539,538 |
|
|
2.3 |
|
|
607,732 |
|
|
2.5 |
|
|
Promoting, basic, and administrative bills |
|
591,727 |
|
9.1 |
|
575,930 |
|
6.8 |
|
|
|
1,914,508 |
|
|
8.0 |
|
|
1,704,285 |
|
|
7.0 |
|
|
Depreciation and amortization |
|
57,377 |
|
0.9 |
|
54,428 |
|
0.6 |
|
|
|
170,717 |
|
|
0.7 |
|
|
157,107 |
|
|
0.6 |
|
|
Curiosity expense |
|
30,150 |
|
0.5 |
|
24,303 |
|
0.3 |
|
|
|
91,670 |
|
|
0.4 |
|
|
67,247 |
|
|
0.3 |
|
|
Different revenue |
|
(363 |
) |
— |
|
(8,094 |
) |
(0.1 |
) |
|
|
(2,303 |
) |
|
— |
|
|
(35,453 |
) |
|
(0.1 |
) |
|
Earnings earlier than revenue taxes |
|
49,993 |
|
0.8 |
|
355,961 |
|
4.2 |
|
|
|
554,170 |
|
|
2.3 |
|
|
1,291,099 |
|
|
5.3 |
|
|
Revenue tax provision |
|
12,413 |
|
0.2 |
|
86,523 |
|
1.0 |
|
|
|
138,420 |
|
|
0.6 |
|
|
299,638 |
|
|
1.2 |
|
|
NET EARNINGS |
$ |
37,580 |
|
0.6 |
$ |
269,438 |
|
3.2 |
|
|
$ |
415,750 |
|
|
1.7 |
|
$ |
991,461 |
|
|
4.1 |
|
|
WEIGHTED AVERAGE COMMON SHARES: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Primary |
|
158,003 |
|
|
|
162,006 |
|
|
|
|
159,044 |
|
|
|
|
|
162,710 |
|
|
|
||
|
Diluted |
|
158,536 |
|
|
|
164,873 |
|
|
|
|
160,195 |
|
|
|
|
|
165,606 |
|
|
|
||
|
NET EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Primary |
$ |
0.24 |
|
|
$ |
1.66 |
|
|
|
$ |
2.61 |
|
|
|
|
$ |
6.09 |
|
|
|
||
|
Diluted |
$ |
0.24 |
|
|
$ |
1.63 |
|
|
|
$ |
2.60 |
|
|
|
|
$ |
5.99 |
|
|
|
||
|
|
|
|
|||||||||||
|
|
|
As of |
|||||||||
|
|
November 30 |
|
February 28 |
|
November 30 |
||||||
|
(In hundreds besides share information) |
2022 |
|
2022 |
|
|
2021 |
|
||||
|
ASSETS |
|
|
|
||||||||
|
|
CURRENT ASSETS: |
|
|
|
|
||||||
|
|
Money and money equivalents |
$ |
688,618 |
|
$ |
102,716 |
|
|
$ |
62,598 |
|
|
|
Restricted money from collections on auto loans receivable |
|
466,525 |
|
|
548,099 |
|
|
|
552,487 |
|
|
|
Accounts receivable, internet |
|
246,794 |
|
|
560,984 |
|
|
|
563,135 |
|
|
|
Stock |
|
3,414,937 |
|
|
5,124,569 |
|
|
|
4,659,460 |
|
|
|
Different present property |
|
167,143 |
|
|
212,922 |
|
|
|
117,390 |
|
|
|
TOTAL CURRENT ASSETS |
|
4,984,017 |
|
|
6,549,290 |
|
|
|
5,955,070 |
|
|
|
Auto loans receivable, internet |
|
16,240,832 |
|
|
15,289,701 |
|
|
|
15,167,170 |
|
|
|
Property and gear, internet |
|
3,375,001 |
|
|
3,209,068 |
|
|
|
3,175,577 |
|
|
|
Deferred revenue taxes |
|
87,262 |
|
|
120,931 |
|
|
|
134,382 |
|
|
|
Working lease property |
|
529,781 |
|
|
537,357 |
|
|
|
543,645 |
|
|
|
Goodwill |
|
141,258 |
|
|
141,258 |
|
|
|
141,258 |
|
|
|
Different property |
|
580,790 |
|
490,659 |
|
|
|
458,117 |
|
|
|
|
TOTAL ASSETS |
$ |
25,938,941 |
|
$ |
26,338,264 |
|
$ |
25,575,219 |
|
|
|
|
|
|
|
|
|
|
|||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
||||||
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|||||
|
|
Accounts payable |
$ |
802,780 |
|
$ |
937,717 |
|
|
$ |
936,556 |
|
|
|
Accrued bills and different present liabilities |
|
496,202 |
|
|
533,271 |
|
|
|
530,592 |
|
|
|
Accrued revenue taxes |
|
— |
|
|
— |
|
|
|
518 |
|
|
|
Present portion of working lease liabilities |
|
51,215 |
|
|
44,197 |
|
|
|
43,151 |
|
|
|
Present portion of long-term debt |
|
112,708 |
|
|
11,203 |
|
|
|
10,889 |
|
|
|
Present portion of non-recourse notes payable |
|
474,147 |
|
|
521,069 |
|
|
|
535,146 |
|
|
|
TOTAL CURRENT LIABILITIES |
|
1,937,052 |
|
|
2,047,457 |
|
|
|
2,056,852 |
|
|
|
Lengthy-term debt, excluding present portion |
|
1,903,223 |
|
|
3,255,304 |
|
|
|
2,602,598 |
|
|
|
Non-recourse notes payable, excluding present portion |
|
15,737,459 |
|
|
14,919,715 |
|
|
|
14,856,266 |
|
|
|
Working lease liabilities, excluding present portion |
|
509,106 |
|
|
523,269 |
|
|
|
529,821 |
|
|
|
Different liabilities |
|
364,528 |
|
|
357,080 |
|
|
|
419,886 |
|
|
|
TOTAL LIABILITIES |
|
20,451,368 |
|
|
21,102,825 |
|
|
|
20,465,423 |
|
|
|
|
|
|
|
|
||||||
|
|
Commitments and contingent liabilities |
|
|
|
|
||||||
|
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
||||||
|
|
Widespread inventory, $0.50 par worth; 350,000,000 shares approved; 158,019,398 and 161,053,983 shares issued and excellent as of November 30, 2022 and February 28, 2022, respectively |
|
79,010 |
|
|
80,527 |
|
|
|
80,936 |
|
|
|
Capital in extra of par worth |
|
1,697,062 |
|
|
1,677,268 |
|
|
|
1,672,728 |
|
|
|
Collected different complete revenue (loss) |
|
57,420 |
|
|
(46,422 |
) |
|
|
(100,301 |
) |
|
|
Retained earnings |
|
3,654,081 |
|
|
3,524,066 |
|
|
|
3,456,433 |
|
|
|
TOTAL SHAREHOLDERS’ EQUITY |
|
5,487,573 |
|
|
5,235,439 |
|
|
|
5,109,796 |
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
25,938,941 |
|
$ |
26,338,264 |
|
|
$ |
25,575,219 |
|
|
|
|||||||
|
|
9 Months Ended November 30 |
||||||
|
(In hundreds) |
2022 |
|
2021 |
||||
|
OPERATING ACTIVITIES: |
|
|
|
||||
|
Internet earnings |
$ |
415,750 |
|
|
$ |
991,461 |
|
|
Changes to reconcile internet earnings to internet money offered by (utilized in) working actions: |
|
|
|
||||
|
Depreciation and amortization |
|
202,655 |
|
|
|
200,819 |
|
|
Share-based compensation expense |
|
64,974 |
|
|
|
108,962 |
|
|
Provision for mortgage losses |
|
218,967 |
|
|
|
87,342 |
|
|
Provision for cancellation reserves |
|
79,924 |
|
|
|
91,607 |
|
|
Deferred revenue tax (profit) provision |
|
(2,178 |
) |
|
|
19,564 |
|
|
Different |
|
8,879 |
|
|
|
(26,808 |
) |
|
Internet lower (enhance) in: |
|
|
|
||||
|
Accounts receivable, internet |
|
314,190 |
|
|
|
(290,346 |
) |
|
Stock |
|
1,709,632 |
|
|
|
(1,502,323 |
) |
|
Different present property |
|
149,777 |
|
|
|
(13,615 |
) |
|
Auto loans receivable, internet |
|
(1,170,098 |
) |
|
|
(1,764,693 |
) |
|
Different property |
|
(43,502 |
) |
|
|
(18,309 |
) |
|
Internet (lower) enhance in: |
|
|
|
||||
|
Accounts payable, accrued bills and different |
|
|
|
||||
|
present liabilities and accrued revenue taxes |
|
(195,154 |
) |
|
|
170,474 |
|
|
Different liabilities |
|
(91,739 |
) |
|
|
(136,780 |
) |
|
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES |
|
1,662,077 |
|
|
|
(2,082,645 |
) |
|
INVESTING ACTIVITIES: |
|
|
|
||||
|
Capital expenditures |
|
(319,486 |
) |
|
|
(226,903 |
) |
|
Proceeds from disposal of property and gear |
|
3,806 |
|
|
|
260 |
|
|
Proceeds from sale of enterprise |
|
— |
|
|
|
12,284 |
|
|
Purchases of investments |
|
(6,460 |
) |
|
|
(13,676 |
) |
|
Gross sales and returns of investments |
|
3,486 |
|
|
|
36,915 |
|
|
Enterprise acquisition, internet of money acquired |
|
— |
|
|
|
(241,563 |
) |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(318,654 |
) |
|
|
(432,683 |
) |
|
FINANCING ACTIVITIES: |
|
|
|
||||
|
Proceeds from issuances of long-term debt |
|
2,863,500 |
|
|
|
5,804,200 |
|
|
Funds on long-term debt |
|
(4,116,775 |
) |
|
|
(4,524,973 |
) |
|
Money paid for debt issuance prices |
|
(13,987 |
) |
|
|
(14,473 |
) |
|
Funds on finance lease obligations |
|
(10,056 |
) |
|
|
(8,822 |
) |
|
Issuances of non-recourse notes payable |
|
11,351,696 |
|
|
|
11,217,298 |
|
|
Funds on non-recourse notes payable |
|
(10,581,076 |
) |
|
|
(9,565,649 |
) |
|
Repurchase and retirement of frequent inventory |
|
(333,814 |
) |
|
|
(475,950 |
) |
|
Fairness issuances |
|
13,504 |
|
|
|
76,310 |
|
|
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES |
|
(827,008 |
) |
|
|
2,507,941 |
|
|
Improve (lower) in money, money equivalents, and restricted money |
|
516,415 |
|
|
|
(7,387 |
) |
|
Money, money equivalents, and restricted money at starting of yr |
|
803,618 |
|
|
|
771,947 |
|
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD |
$ |
1,320,033 |
|
|
$ |
764,560 |
|
Supply: CarMax, Inc.
