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Nov 30, 2022
CarMax Q3 2023 Earnings Report
CarMax experienced a decline in revenue and earnings per share due to challenges in the used car industry.
Key Takeaways
CarMax reported a decrease in net revenues of 23.7% to $6.5 billion and a significant drop in net earnings per diluted share to $0.24, compared to $1.63 in the prior year. The company faced headwinds including vehicle affordability challenges, inflationary pressures, climbing interest rates, and low consumer confidence. CarMax responded by reducing SG&A expenses and managing its capital structure.
Net revenues decreased by 23.7% year-over-year to $6.5 billion.
Total retail used units sold declined by 20.8%, with comparable store sales down 22.4%.
Wholesale units sold decreased by 36.7%, impacted by market depreciation and retail selectivity.
CarMax Auto Finance (CAF) income decreased by 8.3% due to net interest margin compression and higher provision for loan losses.
Revenue by Segment
Forward Guidance
CarMax did not provide specific financial guidance for future periods, but the company outlined several strategic actions to navigate the current market conditions.
Positive Outlook
- Managing the business prudently.
- Prioritizing initiatives that reduce costs.
- Unlocking operating efficiencies.
- Focusing on profitable market share growth.
- Creating better experiences for associates and customers.
Challenges Ahead
- Ongoing pressures across the used car industry.
- Vehicle affordability challenges.
- Widespread inflationary pressures.
- Climbing interest rates.
- Low consumer confidence.
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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