CarMax, Inc. (NYSE:KMX) has reported its second quarter fiscal year 2025 results, showing positive retail used unit growth and double-digit earnings increase. In the second quarter ended August 31, 2024, CarMax saw a 5.1% increase in retail used unit sales and a 4.3% increase in comparable store used unit sales compared to the prior year. Gross profit per retail used unit was $2,269, in line with last year, and gross profit per wholesale unit was $975, also consistent with the previous year.
The company bought 300,000 vehicles from consumers and dealers, representing a 2.9% increase from the prior year’s second quarter. Of these, 269,000 vehicles were purchased from consumers, down 1.2% from last year, while 31,000 vehicles were purchased through dealers, indicating a significant 61.4% increase from the prior year’s second quarter.
CarMax Auto Finance (CAF) saw a decline of 14.4% in income from the second quarter of the previous year, primarily due to an increase in the provision for loan losses. This quarter’s provision for loan losses increased to $112.6 million compared to $89.8 million in the prior year’s second quarter.
The company's net earnings per diluted share stood at $0.85, representing a 13.3% increase from the previous year. CarMax also repurchased $106.1 million in shares of common stock in the second quarter of fiscal year 2025.
In terms of sales, combined retail and wholesale used vehicle unit sales increased by 2.9% from the prior year’s second quarter. Total retail used vehicle revenues increased by 1.5% compared with the prior year’s second quarter, driven by the increase in retail used units sold, partially offset by a decrease in average retail selling price, which declined approximately $1,250 per unit or 4.6%.
Total gross profit was $760.5 million, indicating a 9.1% increase from last year’s second quarter. Retail used vehicle gross profit increased by 5.9% and gross profit per unit was $2,269, consistent with last year’s second quarter. Wholesale vehicle gross profit increased by 0.9% versus the prior year’s second quarter.
On the other hand, the company’s selling, general, and administrative (SG&A) expenses increased by 4.2% from the second quarter of fiscal 2024, amounting to $610.6 million. However, SG&A as a percent of gross profit decreased to 80.3% in the second quarter compared to 84.1% in the prior year’s second quarter, supported by continued strong cost management efforts in the stores and customer experience centers.
The market has reacted to these announcements by moving the company's shares -2.6% to a price of $74.49. If you want to know more, read the company's complete 8-K report here.
