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CarMax Swoons on Quarterly Figures

CarMax, Inc. (NYSE:KMX) today reported results for the fourth quarter ended February 29, 2024.

Fourth-Quarter net revenues were $5.6 billion, down 1.7% compared with the prior-year fourth quarter.

The company also delivered solid margins in retail and wholesale; gross profit per retail used unit of $2,251 and gross profit per wholesale unit of $1,120, both down slightly from last year’s historically strong fourth quarter.

KMX bought 234,000 vehicles from consumers and dealers, down 10.8% versus last year’s fourth quarter, which benefited from strong appreciation, 213,000 of these vehicles were purchased from consumers, down 14.1% over last year’s fourth quarter, 21,000 of these vehicles were purchased through dealers, up 44.8% from last year’s fourth quarter.

CarMax Auto Finance income amounted to $147.3 million, grew 18.9% from the prior year fourth quarter due to a lower provision for loan losses, reflecting tightened lending standards, and an increase in average managed receivables, partially offset by compression in the net interest margin percentage (NIM). NIM of 5.9% was consistent with this year’s third quarter.

Net earnings per diluted share of $0.32 versus $0.44 a year ago; last year’s quarter benefited by $0.08 or $16.0 million due to the receipt of extended protection plan profit sharing revenues as well as $0.04 from a 16.5% tax rate compared to a more normalized 23.3% tax rate this year.

KMX shares dumped $9.26, or 11.7%, to $70.04.

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