CarMax: Revenues Rise as Used Sales Dip

By Staff Writer September 30, 2022

CarMax reported rising revenues for the second quarter ended Aug. 31. Net revenues of $8.1 billion were up 2.0% compared with the prior year second quarter.

Total retail used units sold decreased 6.4%, while used unit sales in comparable stores were down 8.3%; gross profit per retail used unit was $2,282, an increase of $97 per unit despite steep market depreciation.

CarMax’s share of the nationwide 0- to 10-year-old vehicle market continued to increase through July, the latest period for which title data is available.

Total wholesale units decreased 15.1% with gross profit per unit of $881, a decrease of $124 per unit; both volume and margins were impacted by retail selectivity and steep market depreciation.

CarMax bought 342,731 vehicles from consumers and dealers, down 8.1% versus last year’s second quarter but up approximately 50% as compared to the pre-Instant Offer launch in the second quarter of FY21.

This includes 322,543 vehicles from consumers, down 11.5% over last year’s record results, while 20,188 of these vehicles were through MaxOffer, the firm’s digital appraisal product for dealers.

CarMax Auto Finance (CAF) reported income of $182.9 million, an 8.6% year-over-year decline as a $40.0 million swing in the provision for loan losses, primarily reflecting a significant tailwind in the prior year, outweighed the effects of growth in CAF’s net interest margin and average managed receivables. Net interest margin improved to 7.3% of average managed receivables, up from 7.2% in the prior year’s second quarter.

“While this was a challenging quarter across the used car industry, our ongoing progress in strengthening and expanding our omnichannel experience continues to positively differentiate us and enable us to grow market share,” said Bill Nash, president and chief executive officer.

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Last modified on Thursday, 06 October 2022 14:27