CarMax reported results for the second quarter ended August 31, 2021.
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Combined retail and wholesale used vehicle unit sales were 419,895, an increase of 19.9% from the prior year’s second quarter.
Online retail sales accounted for 9% of retail unit sales, compared to 3% in the second quarter last year. Revenue from online transactions(2), including retail and wholesale unit sales, was $2.2 billion, or approximately 28% of net revenues, compared to 18% of net revenues in last year’s second quarter.
Total retail used vehicle unit sales increased 6.7% to 231,797 and comparable store used unit sales increased 6.2% from the prior year’s second quarter.
Total retail used vehicle revenues increased 39.1% compared with the prior year’s second quarter due to the increase in both average retail selling prices, which rose more than $6,000, or 30.8%, and used units sold. The price increase largely reflected higher vehicle acquisition costs resulting from strong wholesale industry valuations.
Total wholesale vehicle unit sales were 188,098, an increase of 41.4% compared with the prior year’s second quarter.
Wholesale sales benefited from the large increase in appraisal volume from online offerings and strong offers aided by higher market prices. Total wholesale revenues increased 107.7% compared with the prior year’s second quarter due to average wholesale selling prices rising almost $3,000, or 47.7%, and the increase in units sold.
Other sales and revenues increased 11.3% compared with the second quarter of fiscal 2021, reflecting an increase of $18.6 million.
Gross Profit. Total gross profit increased to $815.5 million, an increase of 8.4% versus last year’s second quarter. Retail used vehicle gross profit rose 5.3%, reflecting the increase in total used unit sales.
Retail used vehicle gross profit per unit of $2,185 was in line with historical performance and down slightly from $2,214 in the prior year’s quarter. Wholesale vehicle gross profit increased 30.9% versus the prior year’s quarter, largely reflecting an increase in volume.
Wholesale vehicle gross profit per unit of $1,005 was down from $1,086 in the prior year quarter.
Other gross profit decreased 5.3% reflecting a decrease in service margin due to the impact of COVID-related savings reflected in last year’s second quarter, an increase in warranty service costs, shifting retail service capacity to support production, as well as a decrease in EPP profit sharing revenues when compared to last year’s quarter. The decrease in other gross profit was partially offset by the inclusion of Edmunds gross profit in our consolidated financial results and favorability from third party finance fees compared with the second quarter of fiscal 2021. ■