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Feb 29, 2024
CarMax Q4 2024 Earnings Report
CarMax's Q4 2024 earnings decreased slightly due to a decline in wholesale unit sales and gross profit, but was partially offset by growth in retail used unit sales and CAF income.
Key Takeaways
CarMax reported a slight decrease in net revenues for Q4 2024, with a decline of 1.7% compared to the prior year. Despite a decrease in wholesale unit sales, retail used unit sales increased by 1.3%. The company actively managed SG&A expenses and saw significant growth in CarMax Auto Finance (CAF) income.
Net revenues decreased by 1.7% year-over-year to $5.6 billion.
Retail used unit sales increased by 1.3%, while comparable store used unit sales increased by 0.1%.
Wholesale unit sales decreased by 4.0% compared to the prior year.
CAF income grew by 18.9% due to a lower provision for loan losses and an increase in average managed receivables.
CarMax
CarMax
CarMax Revenue by Segment
Revenue by Segment
Used Vehicles Revenue
CapyFin.comWholesale Vehicles Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
CarMax anticipates investing between $500 million and $550 million in capital expenditures for fiscal year 2025, with a focus on long-term growth in offsite-reconditioning and auction facilities, as well as new store locations.
Positive Outlook
- Focus on profitable market share growth.
- Maintaining goal to sell more than 2 million combined retail and wholesale units annually.
- Expecting to achieve the $33 billion annual revenue target sooner than units due to higher average selling prices.
- Planning new store growth of five locations, as well as our second stand-alone reconditioning center and one stand-alone auction facility.
- Intending to modestly accelerate the pace of share repurchases.
Challenges Ahead
- Uncertainty in the timing of market recovery.
- Vehicle affordability challenges due to widespread inflationary pressures.
- Higher interest rates.
- Tightened lending standards.
- Low consumer confidence.
Revenue & Expenses
Visualization of income flow from segment revenue to net income