CarMax (KMX) Q1 2025 earnings summary

Executive summary

• Net sales and operating revenues for Q1 FY25 were $7.11B, down 7.5% year-over-year, with net earnings of $152.4M, a 33.2% decrease from the prior year.

• Retail used unit sales fell 3.1% and wholesale units declined 8.3%, reflecting affordability challenges and higher interest rates.

• Gross profit per retail used unit was $2,347, flat year-over-year; wholesale and EPP gross profit per unit reached Q1 records.

• CAF income rose 7% to $147M, driven by higher managed receivables and net interest margin.

• Over $100M in share repurchases were completed, and the first non-prime ABS transaction was launched.

Financial highlights

• Total sales: $7.11B, down 7.5% year-over-year; total gross profit: $791.9M, down 3.1%.

• Retail gross profit per used unit: $2,347 (flat year-over-year); wholesale gross profit per unit: $1,064, a Q1 record.

• Net earnings per diluted share: $0.97 vs. $1.44 last year (prior year included $0.28/share legal settlement benefit).

• SG&A expenses rose 14.1% to $638.6M; excluding last year’s legal settlement, SG&A increased 3.1%.

• Cash and cash equivalents at quarter-end were $218.9M, with total debt of $18.78B.

Outlook and guidance

• Comp sales trends improved through Q1 and into June, with June month-to-date comps slightly positive.

• Management expects the expanded securitization program to support incremental finance income and future CAF growth.

• Ongoing cost management, efficiency, and network initiatives are expected to support future growth.

• $200 per retail unit in cost savings targeted over the next 1-2 years from logistics and reconditioning.

• Capital expenditures for FY2025 are projected at $500M–$550M, supporting new stores, reconditioning, and auction facilities.