Carmax, Inc. (NYSE:KMX) has reported its third-quarter fiscal year 2025 results, showcasing impressive growth and performance across various business segments.
In terms of sales, combined retail and wholesale used vehicle unit sales saw a 5.8% increase from the prior year's third quarter, reaching 320,256 units. Retail used vehicle unit sales increased by 5.4% to 184,243 units, with comparable store used unit sales up by 4.3%. The total retail used vehicle revenues increased by 1.2%, driven by the rise in units sold, partially offset by a decrease in the average retail selling price.
Gross profit saw a significant increase, reaching $677.6 million, a 10.6% rise from the prior year's third quarter. The retail used vehicle gross profit increased by 6.8%, reaching $424.8 million. Wholesale vehicle gross profit also saw a notable increase of 12.3%, totaling $138.1 million. Other gross profit increased by 24.6%, primarily due to growth in extended protection plan revenues resulting from stronger margins and service gross profit driven by cost coverage measures and increased efficiencies.
The company's SG&A expenses increased by 2.8% to $575.8 million, primarily driven by an increase in compensation and benefits. However, as a percentage of gross profit, SG&A decreased by 640 basis points to 85.0% in the third quarter compared to 91.4% in the prior year's third quarter, reflecting the growth in gross profit and ongoing cost management efforts.
Carmax Auto Finance (CAF) income increased by 7.6% to $159.9 million, driven by growth in CAF’s net interest margin percentage and average managed receivables. The provision for loan losses was $72.6 million, reflecting performance largely in line with expectations set at the end of the previous quarter.
Net earnings per diluted share increased by 55.8% from $0.52 a year ago to $0.81, showcasing robust growth in earnings.
Moreover, during the third quarter of fiscal year 2025, the company repurchased 1.5 million shares of common stock for $114.8 million.
As a result of these announcements, the company's shares have moved 3.6% on the market, and are now trading at a price of $84.33. For the full picture, make sure to review CarMax's 8-K report.
