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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.
Revenue by Segment
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.
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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