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May 31, 2025
CarMax Q1 2025 Earnings Report
CarMax's first quarter of fiscal year 2025 saw a decrease in retail and wholesale unit sales, but strong margins in retail, wholesale, and EPP.
Key Takeaways
CarMax reported a decrease in combined retail and wholesale used vehicle unit sales by 5.3%. However, the company delivered strong margins in retail, wholesale, and Extended Protection Plans (EPP). They also accelerated share repurchases, buying back over $100 million in shares.
Retail used unit sales decreased 3.1% and comparable store used unit sales decreased 3.8%.
Wholesale units declined 8.3%, impacted by lower year-over-year seasonal appreciation.
Gross profit per retail used unit was $2,347, in line with last year; gross profit per wholesale unit was $1,064.
Bought 314,000 vehicles from consumers and dealers, down 8.6% versus last year.
Revenue by Segment
Forward Guidance
CarMax plans to expand its asset-backed securitization program to enable incremental growth in finance income.
Positive Outlook
- Expansion of the asset-backed securitization program will create additional funding capacity.
- The expansion will drive additional finance income for the business over time.
- The unique finance platform with a full-spectrum in-house lending operation will strengthen their competitive advantage.
- CAF launched its first non-prime securitization deal.
- Continued cost management efforts in stores and CECs drove an SG&A decrease year-over-year.
Challenges Ahead
- Vehicle affordability challenges continued to impact unit sales performance.
- Ongoing headwinds due to widespread inflationary pressures.
- Higher interest rates are creating headwinds.
- Tightened lending standards are creating headwinds.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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