Curious about CarMax net worth and its financial performance in 2024? Let’s take a deep dive into how CarMax generates revenue, especially through its retail and financing sectors.
At Ando Money, we’re dedicated to providing readers with insightful, detailed analysis on the finances of well-known companies. Learn how CarMax stacks up against the competition today.
Quick Facts
| FACT | DETAIL |
|---|---|
| Name | CarMax |
| Full Name | CarMax, Inc. |
| Industry | Automotive Retail |
| Traded as | NYSE: KMX |
| ISIN | N/A |
| Founded | September 1993 |
| Founders | N/A |
| Country/Territory | United States |
| Headquarters | Richmond, Virginia |
| Chief Executive Officer | Bill Nash |
| Number of Employees | Nearly 30,000 |
| Market Cap | $12.11 billion (2024) |
| Total Assets | $27.3 billion |
| Total Equity | $6.18 billion |
| Revenue | $7.01 billion (Q2 2024) |
| Net Income | $132.8 million (Q2 2024) |
What is the Net Worth/Market Cap of CarMax in 2024?
CarMax’s market capitalization, often referred to as net worth in casual conversations, is valued at $12.11 billion as of October 2024. This makes CarMax a significant player in the automotive retail space, even if it’s not at the very top.
When compared to other industry giants, CarMax may not have the clout of tech titans or manufacturing giants, but it’s solidly positioned among respected automotive peers.
For those interested in discovering which companies are leading as the ‘richest companies’ globally, take a closer look at our curated list for deeper insights: check out our list.
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CarMax Financial Performance Overview
Analyzing Revenue Growth Trends of the Company
CarMax has shown resilient revenue growth through a combination of strategic retail operations and a solid presence in the automotive wholesale market.
The company’s retail vehicle sales rose by 1.5% during the second quarter of 2024, bringing in $5.68 billion, while wholesale sales saw a slight decrease of 12.7%, down to $1.15 billion.
Despite these fluctuations, the combined revenue performance underscores a dynamic approach that balances both consumer-facing retail and B2B wholesale channels.
Contributions of Car Financing to Revenue
CarMax Auto Finance (CAF) has been an instrumental component of CarMax’s business model. CAF provided $115.6 million in income during the second quarter, despite a 14.4% decline compared to the prior year.
This was largely driven by an increase in the provision for loan losses, amounting to $112.6 million. Nevertheless, CAF’s financing options have helped CarMax make used vehicle purchases more accessible, thus stimulating sales and revenue.
Gross Profit Analysis by Business Segment
The company’s total gross profit for Q2 2024 was $760.5 million, marking a 9.1% increase from the previous year.
Specifically, the retail used vehicle gross profit per unit was $2,269, which remained consistent with the prior year.
Gross profit from wholesale units amounted to $975 per unit, demonstrating that CarMax’s margins have held steady even amidst market changes.
This balance in gross profit across segments illustrates the company’s capability to effectively maintain revenue streams.
Understanding Operating Expenses and Their Impact
CarMax’s Selling, General, and Administrative (SG&A) expenses reached $610.6 million in Q2, reflecting an increase of 4.2% from the prior year.
Notably, SG&A as a percentage of gross profit decreased to 80.3% from 84.1% in the previous year, thanks to strong cost management initiatives.
This demonstrates CarMax’s commitment to keeping operating costs under control while ensuring effective customer service and maintaining store operations.
Online Sales Contributions to Revenue
CarMax has embraced digital transformation to broaden its market reach. Online sales accounted for 15% of total retail units sold in the second quarter of 2024, slightly up from 14% in the prior year.
Revenue from these digital transactions was valued at $2.0 billion, or approximately 29% of net revenues.
This illustrates the growing importance of e-commerce for CarMax, as it aligns its omni-channel strategy with modern customer preferences.
Extended Protection Plan and Service Margins
CarMax’s Extended Protection Plan (EPP) has significantly contributed to revenue growth, bringing in $121.4 million during the second quarter—a 19.3% increase compared to the previous year.
Additionally, service margin growth contributed $84 per retail unit, enhancing overall revenue.
This focus on value-added services has helped CarMax diversify its revenue streams and reduce reliance solely on vehicle sales.
Asset and Liability Management Insights
CarMax holds $27.3 billion in total assets, with a balanced liability profile that includes $21.12 billion in total liabilities as of Q2 2024.
Effective asset management, particularly in inventory valued at $3.4 billion, plays a crucial role in maintaining financial stability.
CarMax’s approach to handling auto loans receivable, which total $17.4 billion, further demonstrates its emphasis on leveraging financial products to boost overall returns.
Shareholder Returns and Stock Repurchase Activities
During Q2 2024, CarMax repurchased 1.4 million shares of common stock, spending $106.1 million in the process.
This activity highlights CarMax’s commitment to enhancing shareholder value.
By decreasing the number of outstanding shares, they potentially improves earnings per share, creating more value for investors and showing confidence in its long-term strategy.
Future Growth Drivers and Financial Strategies
CarMax’s plans for future growth involve expanding its store network, with two new store openings during the second quarter in El Paso, Texas, and Gainesville, Georgia.
The company plans to open five additional locations, alongside new reconditioning and auction facilities.
These initiatives, aligned with strong operational strategies, aim to further strengthen CarMax’s profitability and market presence as the leading retailer in used vehicle sales.
FAQs About CarMax
What is CarMax’s primary source of revenue?
They primarily earns revenue from retail used vehicle sales, which accounted for $5.68 billion in Q2 2024. Other significant sources include wholesale vehicle sales and income from CarMax Auto Finance (CAF).
How does the company manage operating expenses?
They actively manages its SG&A expenses, which totaled $610.6 million for Q2 2024. Through efficient cost management, the company reduced its SG&A percentage relative to gross profit, indicating effective expense control measures.
How significant are online sales to CarMax?
Online transactions have been increasingly important for CarMax, contributing 29% of net revenues in Q2 2024. The company’s shift towards digital sales channels is a strategic move to cater to modern consumers.
What role does CarMax Auto Finance (CAF) play in the business?
CAF is pivotal for CarMax, providing financing solutions for customers. In Q2 2024, CAF’s income was $115.6 million, though impacted by an increase in loan loss provisions, it remains a major contributor to company revenue.
How has the company contributed to shareholder value recently?
They conducted a $106.1 million share repurchase during Q2 2024, buying back 1.4 million shares. This reflects their focus on delivering value to shareholders through reducing outstanding shares.
Conclusion
We’ve explored the different financial components contributing to CarMax’s performance.
I’d love for you to share your thoughts or questions in the comments below. Feel free to check out more detailed analysis on famous companies’ finances at Ando Money.
