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CARMAX INC - Fourth Quarter Result

"We're disappointed in our fourth quarter comparable store unit sales performance, which we believe was partly affected by macro pricing factors resulting in a softer sales environment," said CEO Bill Nash in a statement.


April 04, 2018

RICHMOND, Va.--(BUSINESS WIRE)-- CarMax, Inc. (NYSE:KMX) today reported results for the fourth quarter and fiscal year ended February 28, 2018. Year-over-year highlights include:

           
 

  Net sales and operating revenues increased 0.8% to $4.08 billion in the fourth quarter. For the fiscal year, net sales and operating revenues increased 7.8% to $17.12 billion.
           
 

  Used unit sales in comparable stores declined 8.0% in the fourth quarter, while they increased 2.0% for the fiscal year.
           
 

  Total used unit sales fell 3.1% in the fourth quarter, while they rose 7.5% for the fiscal year.
           
 

  Total wholesale unit sales increased 8.9% in the fourth quarter and 4.3% for the fiscal year.
           
 

  CarMax Auto Finance (CAF) income increased 21.9% to $101.1 million in the fourth quarter. For the fiscal year, CAF income increased 14.1% to $421.2 million.
           
 

  In the fourth quarter, net earnings declined 20.0% to $122.1 million and net earnings per diluted share declined 17.3% to $0.67.
           
      *   In connection with the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”), net earnings for the current year’s fourth quarter were reduced by $32.7 million, or $0.18 per diluted share, for the revaluation of our net deferred tax asset. Net earnings were also increased by $20.8 million, or $0.11 per diluted share, primarily due to the reduction in the statutory federal tax rate.
           
      *   Net earnings for the current year’s quarter were reduced by a one-time discretionary bonus of $8.0 million, or $0.03 per diluted share net of taxes, paid to eligible associates.
           
 

  For the fiscal year, net earnings increased 5.9% to $664.1 million and net earnings per diluted share increased 10.4% to $3.60. Net earnings for the full fiscal year were reduced by the fourth quarter items noted above.
           

Fourth Quarter Business Performance Review

Sales . Total used vehicle unit sales declined 3.1% and comparable store used unit sales fell 8.0% versus the prior year’s fourth quarter. The comparable store sales performance primarily reflected lower store traffic and relatively flat conversion, as well as a tough comparison as we lapped our strongest prior year performance. “We’re disappointed in our fourth quarter comparable store unit sales performance, which we believe was partly affected by macro pricing factors resulting in a softer sales environment,” said Bill Nash, president and chief executive officer.

Total wholesale vehicle unit sales increased 8.9% compared with the fourth quarter of fiscal 2017, largely driven by the growth in our store base and an increase in our appraisal buy rate.

Other sales and revenues decreased 4.5% compared with the fourth quarter of fiscal 2017. Extended protection plan (EPP) revenues declined 2.4%, primarily due to the decline in used unit sales. The $5.0 million reduction in third-party finance fees reflected shifts in our sales mix by finance channel, including a decline in our Tier 2 and an increase in our Tier 3 sales.

Gross Profit . Total gross profit decreased 4.5% versus last year’s fourth quarter, to $536.7 million. Used vehicle gross profit fell 2.5%, largely the result of the 3.1% decline in total used unit sales. Used vehicle gross profit per unit was similar at $2,147 compared with $2,134 in the prior year period. Wholesale vehicle gross profit increased 9.8% versus the prior year’s quarter, primarily driven by the 8.9% increase in wholesale unit sales. Wholesale vehicle gross profit per unit was comparable at $946 versus $938 in the prior year period. Other gross profit declined 24.2%, reflecting a decrease in service profits, together with the noted changes in EPP revenues and net third-party finance fees. Service profits were affected by the reduced leverage of service department costs resulting from the decrease in comparable store used unit sales. In addition, approximately half of the total one-time discretionary bonus was paid to service department associates.



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INVESTORS BUSINESS DAILY : CarMax Misses Q4 Forecasts Amid 'Softer Sales Environment' CarMax (KMX) reported fourth-quarter results that fell short of views as the used car dealer saw less customer traffic.

https://www.investors.com/news/used-car-dealer-carmax-reports-fourth-quarter-earnings/


BUSINESSWIRE : Total used vehicle unit sales declined 3.1% and comparable store used unit sales fell 8.0% versus the prior year’s fourth quarter. The comparable store sales performance primarily reflected lower store traffic and relatively flat conversion, as well as a tough comparison as we lapped our strongest prior year performance. “We’re disappointed in our fourth quarter comparable store unit sales performance, which we believe was partly affected by macro pricing factors resulting in a softer sales environment,” said Bill Nash, president and chief executive officer.

https://www.businesswire.com/news/home/20180404005270/en/CarMax-Reports-Fourth-Quarter-Results