CarMax Reports Slight Decline in Net Sales but Increases Gross Profit and Net Earnings for Fiscal Year 2025

CarMax, Inc. reported its financial results for the fiscal year ending February 28, 2025, revealing a slight decline in net sales and operating revenues, which totaled $26.35 billion, down 0.7% from the previous year. Despite this decrease, the company experienced a 6.8% increase in gross profit, reaching $2.90 billion, and a 4.5% rise in net earnings, amounting to $500.6 million. The diluted earnings per share increased by 6.3% to $3.21, reflecting a solid performance in profitability despite the revenue dip.

In terms of unit sales, CarMax sold 789,050 used vehicles, marking a 3.1% increase compared to the prior year. The comparable store sales for used vehicles grew by 2.2%. However, wholesale unit sales saw a slight decline of 0.4%, totaling 544,312 vehicles. The average gross profit per used vehicle sold was $2,311, a modest increase of 1.0% year-over-year. The company also noted that online retail sales accounted for 15% of total used unit sales, indicating a growing trend towards digital transactions.

Strategically, CarMax has focused on enhancing its omni-channel platform, which allows customers to purchase vehicles online, in-store, or through a combination of both. The company has also made significant investments in technology, including the rollout of new systems for order processing and customer accounts, as well as improvements to its appraisal processes. The acquisition of Edmunds in June 2021 has further integrated digital capabilities into CarMax's operations, enhancing its competitive position in the used vehicle market.

Operationally, CarMax expanded its footprint, operating 250 used car stores across 109 U.S. television markets as of February 28, 2025. The company plans to open six new stores and four stand-alone reconditioning and auction centers in fiscal 2026. Employee headcount stood at 30,048, reflecting the company's commitment to maintaining a skilled workforce to support its growth initiatives. The company also reported a significant increase in dealer participation in its MaxOffer program, which facilitates vehicle appraisals and purchases.

Looking ahead, CarMax anticipates continued growth in both retail and wholesale unit sales, with a target of achieving double-digit earnings per share growth in the coming years. The company aims to leverage its omni-channel capabilities and enhance customer experiences while managing operational efficiencies to support profitability. Despite the challenges posed by market conditions, CarMax remains optimistic about its strategic direction and the potential for long-term growth in the used vehicle market.