Q3 2025 Carmax Inc Earnings Call Transcript
Key Points
- CarMax Inc (KMX) reported a 5.4% increase in total retail unit sales and a 6.3% increase in wholesale unit sales year-over-year.
- The company achieved double-digit EPS growth, with net earnings per diluted share up 56% compared to the previous year.
- CarMax Inc (KMX) successfully leveraged SG&A expenses, achieving a 640 basis point improvement driven by gross profit growth and expense efficiency actions.
- The omnichannel retail experience saw increased adoption, with 15% of retail unit sales conducted online, up from 14% the previous year.
- CarMax Auto Finance (CAF) income increased by 8% year-over-year, with a net interest margin improvement of 35 basis points to 6.2%.
- Average selling prices for both retail and wholesale units declined, with retail prices down approximately $1,100 per unit and wholesale prices down $500 per unit year-over-year.
- The provision for loan losses increased to $73 million from $68 million in the previous year, reflecting ongoing credit risk management challenges.
- SG&A expenses rose by 3% or $16 million from the prior year, primarily due to increased compensation and benefits.
- Despite improvements, the company continues to face challenges in the broader used car market, with ongoing consumer inflationary pressures impacting sales.
- The company incurred a one-time charge of $5 million related to logistics operations, although this was offset by efficiencies gained.
Ladies and gentlemen, thank you for standing by. Welcome to the Third Quarter Fiscal Year 2025 Carmax Earnings Release Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Lowenstein, VP, Investor Relations. Please go ahead.
Thank you, Todd. Good morning, everyone. Thank you for joining our fiscal 2025 third quarter earnings conference call. I'm here today with Bill Nash, our President and CEO; Enrique Mayor-Mora, our Executive Vice President and CFO; and Jon Daniels, our Senior Vice President, Carmax Auto Finance operations. Let me remind you our statements today that are not statements of historical fact including statements regarding the company's future business plans, prospects and financial performance are forward-looking statements we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These statements are based on our
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