CarMax (KMX) investor relations material

Executive summary

• Leadership introduced a four-pillar growth strategy focused on great offering, easy experience, adding value on each transaction, and running lean, aiming to improve operational efficiency and customer experience.

• The company leveraged its national footprint, digital capabilities, and people-first culture to drive market share growth in a fragmented industry, with 84% of retail sales supported by digital capabilities.

• Achieved 6.2% year-over-year revenue growth to $8.0 billion, driven by higher average selling prices and increased wholesale unit sales.

• SG&A expenses decreased 3.7%, progressing toward a $200 million savings target by fiscal year-end.

• Net earnings per diluted share were $1.31, down from $1.38 a year ago, with gross profit declining 4.4%.

Financial highlights

• Net sales and operating revenues rose 6.2% year-over-year to $8.01 billion.

• Combined retail and wholesale vehicle sales were 392,357 units, up 3.3% year-over-year; retail used unit sales were flat, while wholesale units grew 8.4%.

• Average retail selling price increased by $1,168 to $27,288; wholesale ASP rose by $405 to $8,364.

• Total gross profit was $854.4 million, down 4.4% year-over-year; used retail margin decreased 10% to $501 million, with profit per used unit down $230 to $2,177.

• SG&A expense was $635.2 million, down 3.7% year-over-year; SG&A per total unit improved by $118 or 6.8% to $1,619.

Outlook and guidance

• Management expects continued momentum in sales and earnings growth, with ongoing improvements in pricing, marketing, and conversion.

• SG&A savings target of $200 million by fiscal year-end remains on track.

• Guidance for a $200 per unit reduction in GPU for the year is maintained, with flexibility to adjust based on market conditions.

• Strategic update planned for late Fall to provide further detail on growth initiatives and performance expectations.