The following is a summary of the CarMax, Inc. (KMX) Q3 2025 Earnings Call Transcript:

Financial Performance:

• Total sales reached $6.2 billion, up 1% compared to last year, driven by higher volume offset by lower prices.

• Retail gross profit per used unit stood at $2,306, maintaining last year's level of $2,277 despite the price drops.

• Wholesale gross profit per unit reached $1,015, marked an increase from last year's $961, reflecting improved margins both in volume and unit.

• Net earnings per diluted share grew significantly by 56%, reaching $0.81.

Business Progress:

• CarMax expanded its digital footprint with approximately 15% of retail unit sales being conducted online, up from last year's 14%.

• The company enhanced its omni-channel capabilities, notably through the nationwide rollout of customer shopping accounts and integration of tools like Sky, an AI-powered virtual assistant.

• CarMax Auto Finance (CAF) income increased by 8%, demonstrating robust performance and growth in income.

Opportunities:

• Continued focus on enhancing the omni-channel shopping experience positions CarMax to leverage the largest addressable market in the used car space.

• The company's investment in AI and digital tools is set to improve operational efficiencies and customer engagement.

Risks:

• The observed fluctuation in used car prices and economic pressures may impact consumer spending and financing capabilities, posing potential risks to revenue and profit margins.

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