CarMax’s fourth quarter ended February 28 with total unit sales edging up 0.7% to 303,969, but the mix and profitability shifted sharply.
Retail used unit sales fell 0.8% to 181,188, while comparable store used unit sales dropped 1.9%. Retail used vehicle revenue declined 1.2% to $4.78 billion, as the average retail selling price slipped 0.4% to $26,019. Gross profit on retail used vehicles fell 9.6% to $383.2 million, and gross profit per retail used unit dropped $207 to $2,115.
Wholesale volume moved the other way. Wholesale unit sales rose 3.0% to 122,781, but wholesale revenue was essentially flat, down 0.1% to $1.01 billion, because the average wholesale selling price fell 3.3% to $7,776. Wholesale gross profit decreased 7.3% to $115.4 million, and gross profit per wholesale unit fell $105 to $940.
Total gross profit declined 9.4% to $605.3 million from $667.9 million a year earlier. Other gross profit fell 10.6% to $106.7 million.
On the cost side, SG&A expenses were $611.3 million, essentially unchanged from $610.5 million. Compensation and benefits dropped 8.6% to $323.4 million, but occupancy costs jumped 41.1% to $93.8 million and advertising rose 8.0% to $77.9 million. SG&A as a percentage of gross profit widened to 101.0% from 91.4%. SG&A per total unit improved slightly to $2,011 from $2,023.
CarMax Auto Finance income fell 9.8% to $143.7 million from $159.3 million. The provision for loan losses rose to $73.9 million from $68.3 million. CAF financed 42.8% of units sold, up from 42.3%, and its weighted average contract rate was 11.1%, unchanged.
Net sales and operating revenues slipped 1.0% to $5.95 billion from $6.00 billion. For the full year, revenues declined 1.8% to $25.88 billion, while total unit sales fell 1.1% to 780,684 used vehicles and 1.1% to 538,203 wholesale vehicles.
The company posted a quarterly loss of $120.7 million, compared with earnings of $89.9 million a year earlier. Diluted earnings per share swung to a loss of $0.85 from profit of $0.58. For the full year, net earnings dropped to $247.3 million from $500.6 million, and diluted EPS fell to $1.54 from $3.02.
CarMax repurchased 1.3 million shares for $50.4 million in the quarter and 11.8 million shares for $631.8 million for the year, then paused buybacks late in the quarter. Today the company's shares have moved 1.91% to a price of $42.68. Check out the company's full 8-K submission here.
