On this page of StockholderLetter.com we present the latest annual shareholder letter from CARMAX INC — ticker symbol KMX. Reading current and past KMX letters to shareholders can bring important insights into the investment thesis.
THE WAY CAR BUYING SHOULD BE. ANNUAL REPORT FISCAL YEAR 2025
The Nation s Largest Used Car Retailer 790 K 540 K CARS RETAILED IN FY25 $8.3 B ON THE FORTUNE 100 BEST COMPANIES TO WORK FOR LIST CONSUMER & DEALER BUYS IN FY25 35M CAF ORIGINATIONS IN FY25 21YEARS 1.2M CARS WHOLESALED IN FY25 AVERAGE MONTHLY WEB VISITS $420 M+ 2M IN SHARE REPURCHASES VEHICLES MOVED 250 STORE LOCATIONS NATIONWIDE CARMAX MARKETS xisting Television Markets E as of April 11, 2025 (Size of markers is based on number of CarMax stores in each market)
2025 Le er to Shareholders Dear Fellow Shareholders: I am pleased with the momentum we have built across our diversi ed business in FY25. Our associates, stores, technology and digital capabili es, all seamlessly ed together, enable us to provide the most customer-centric car buying and selling experience. We have achieved three straight quarters of retail unit growth and robust EPS growth. In addi on, we expanded our footprint by opening ve stores and a standalone recondi oning center, and celebrated the opening of our 250 th store. FY25 was also a pivotal year for CarMax as we con nued to enhance our omni-channel experience for associates and customers, drive opera ng e ciencies, foster an excep onal workplace culture, and make a posi ve impact on our communi es. I share more on several of these important accomplishments below. Experience and E ciencies I am proud of the steps we took during the year to further di eren ate our omni-channel o ering and drive incremental opera onal e ciencies. We rolled out a number of new systems that enhance consumers shopping experiences, support conversion and enable our associates to be more e cient. These include order processing in our stores, customer accounts online, AI-driven knowledge management in our Customer Experience Centers, and EV research and shopping tools on the Edmunds and CarMax websites. I am proud of the steps we took during the year to further di eren ate our omni-channel o ering and drive incremental opera onal e ciencies. Our digital tools and enhancements have made it easier for consumers to self-progress in their shopping journey. Skye, our AI-powered virtual assistant, is now able to independently answer over half of the ques ons our customers ask it, re ec ng more than a 20% year over year improvement. Going forward, we plan to con nue to expand Skye s func onality with addi onal data and new architecture. Addi onally, next year we will focus on improving our online vehicle transfer experience. We ended the year with more than 80% of our sales supported by our digital capabili es, and the rate of fully self-progressed online sales grew by 25% across FY25. For supply, we enhanced both our consumer and dealer-facing appraisal experiences. We are now able to give digital o ers to approximately 99% of the customers who come to carmax.com for an appraisal, and we made our dealer tool, MaxO er, even easier to use. This has a racted more dealers to the o ering and has driven record sourcing volume each quarter. In FY26, we will further enhance MaxO er
to a ract new dealers, expanding our access to directly sourced vehicles. We will also streamline the online appraisal checkout process and expand appraisal pick-up availability to new markets. For nance, we began tes ng new credit scoring models and corresponding strategies across the full credit spectrum, which posi ons us to further grow CarMax Auto Finance (CAF) income modestly in the near-term and more materially over me. We are excited about the tremendous growth poten al unlocked by the broadening of our securi za on program. This year, we expanded our ABS model, successfully execu ng our rst non-prime and higher-prime transac ons. Going forward, we plan to con nue extending CAF s par cipa on across the credit spectrum to grow penetra on and capture addi onal nance pro t. We will also modernize the ownership experience on CAF s digital pla orm, which will enhance the customer experience and drive opera ng e ciencies. I believe, and our research a rms, that no compe tor can match our experience. This is a key di eren ator that gives us the right to win and access to the largest total addressable market in the used car space. And nally, we con nued to focus on driving down cost of goods sold by pursuing incremental e ciency opportuni es across our logis cs network and recondi oning opera ons. We achieved savings of approximately $125 per unit this year and an cipate that we will achieve at least another $125 per unit in scal 2026. This exceeds the ini al $200 target that we set at the beginning of scal 2025. These e ciencies support a ordability as we pass savings on to our customers and also support our margins. Commi ed to Our Associates and Communi es None of these achievements would be possible without our more than 30,000 talented and dedicated associates na onwide. CarMax associates foster our incredible company culture, and they are the reason we have been recognized by Fortune Magazine for 21 consecu ve years as one of the 100 Best Companies to Work For . This is a major accomplishment that we all celebrate. As part of our core value of pu ng people rst, we also remain commi ed to championing a culture of inclusion, connec on, and belonging that values diversity of perspec ve, experience, and thought. Since 2003, CarMax and The CarMax Founda on have invested more than $110 million in the communi es where we live and work. This year, we con nued our steadfast support of nonpro ts in our communi es and 100% of our loca ons par cipated in volunteer events. We con nue to amplify our social impact in collabora on with KABOOM! and Points of Light. Together, we mobilized thousands of associates for days of service crea ng las ng impact on neighborhoods near our loca ons by building playgrounds and transforming community centers, gardens, and schools. Under the leadership of The CarMax Founda on, we developed new and innova ve ways for our associates to give back in their communi es. Finally, we con nue to make meaningful progress in reducing our environmental impact and remain on track to achieve our calendar year 2025 GHG emissions reduc on target. I welcome you to review our upcoming 2025 Responsibility Report for more informa on on these ini a ves and more.
Looking Ahead I am excited for the future of our company. As we look ahead to FY26, we will leverage and enhance our capabili es to drive growth through be er execu on, innova ve e orts and upleveled experiences. I believe, and our research a rms, that no compe tor can match our experience. This is a key di eren ator that gives us the right to win and access to largest total addressable market in the used car space. I d also like to call out the the I d also like to call out the power of the earnings model we power of the earnings have built, which is designed to deliver an earnings per share growth CAGR in the high teens when retail unit model we have built, growth is in the mid-single digits. which is designed to deliver an earnings per share growth CAGR in the high teens when retail unit growth is in the midsingle digits. To our associates, thank you for living our values every day and for taking care of each other, our customers and our communi es. You are cri cal to our long-term success. I would also like to thank our shareholders for your con nued support and interest in CarMax. Looking ahead, I am excited for all the work we will be doing to con nue the posi ve momentum we drove in FY25 and to con nue to create las ng value for our associates, customers, communi es, and shareholders. Bill Nash President and Chief Executive Officer April 11, 2025
 • shareholder letter icon 5/8/2025 Letter Continued (Full PDF)
 • stockholder letter icon 5/11/2023 KMX Stockholder Letter
 • stockholder letter icon 5/9/2024 KMX Stockholder Letter
 • stockholder letter icon More "Auto Dealerships" Category Stockholder Letters
 • Benford's Law Stocks icon KMX Benford's Law Stock Score = 86


KMX Shareholder/Stockholder Letter Transcript:

THE WAY
CAR BUYING
SHOULD BE.

ANNUAL REPORT FISCAL YEAR 2025

The Nation   s Largest Used Car Retailer
790 K
540 K
CARS RETAILED
IN FY25
$8.3 B
ON THE
FORTUNE 100
BEST COMPANIES
TO WORK FOR   
LIST
CONSUMER &
DEALER BUYS
IN FY25
35M
CAF ORIGINATIONS
IN FY25
21YEARS
1.2M
CARS WHOLESALED
IN FY25
AVERAGE MONTHLY
WEB VISITS
$420 M+
2M
IN SHARE
REPURCHASES
VEHICLES
MOVED
250
STORE LOCATIONS
NATIONWIDE
CARMAX MARKETS

  xisting Television Markets
E
as of April 11, 2025
(Size of markers is based on
number of CarMax stores in
each market)

2025 Le er to Shareholders
Dear Fellow Shareholders:
I am pleased with the momentum we have built across our diversi   ed business in FY25. Our associates,
stores, technology and digital capabili es, all seamlessly ed together, enable us to provide the most
customer-centric car buying and selling experience. We have achieved three straight quarters of retail
unit growth and robust EPS growth. In addi on, we expanded our footprint by opening    ve stores and a
standalone recondi oning center, and celebrated the opening of our 250 th store.
FY25 was also a pivotal year for CarMax as we con nued to enhance our omni-channel experience for
associates and customers, drive opera ng e   ciencies, foster an excep onal workplace culture, and
make a posi ve impact on our communi es.
I share more on several of these important accomplishments below.
Experience and E   ciencies
I am proud of the steps we took during the year to further di   eren ate our omni-channel o   ering and
drive incremental opera onal e   ciencies.
We rolled out a number of new systems that enhance consumers    shopping experiences, support
conversion and enable our associates to be more e   cient. These include order processing in our stores,
customer accounts online, AI-driven knowledge management in our Customer Experience Centers, and
EV research and shopping tools on the Edmunds and CarMax websites.
   I am proud of the steps
we took during the year to
further di   eren ate our
omni-channel o   ering and
drive incremental
opera onal e   ciencies.   
Our digital tools and enhancements have made it easier for
consumers to self-progress in their shopping journey. Skye,
our AI-powered virtual assistant, is now able to
independently answer over half of the ques ons our
customers ask it, re   ec ng more than a 20% year over year
improvement. Going forward, we plan to con nue to
expand Skye   s func onality with addi onal data and new
architecture. Addi onally, next year we will focus on
improving our online vehicle transfer experience.
We ended the year with more than 80% of our sales supported by our digital capabili es, and the rate of
fully self-progressed online sales grew by 25% across FY25.
For supply, we enhanced both our consumer and dealer-facing appraisal experiences. We are now able
to give digital o   ers to approximately 99% of the customers who come to carmax.com for an appraisal,
and we made our dealer tool, MaxO   er, even easier to use. This has a racted more dealers to the
o   ering and has driven record sourcing volume each quarter. In FY26, we will further enhance MaxO   er

to a ract new dealers, expanding our access to directly sourced vehicles. We will also streamline the
online appraisal checkout process and expand appraisal pick-up availability to new markets.
For    nance, we began tes ng new credit scoring models and corresponding strategies across the full
credit spectrum, which posi ons us to further grow CarMax Auto Finance (CAF) income modestly in the
near-term and more materially over me. We are excited about the tremendous growth poten al
unlocked by the broadening of our securi za on program. This year, we expanded our ABS model,
successfully execu ng our    rst non-prime and higher-prime transac ons. Going forward, we plan to
con nue extending CAF   s par cipa on across the credit spectrum to grow penetra on and capture
addi onal    nance pro   t. We will also modernize the ownership experience on CAF   s digital pla orm,
which will enhance the customer experience and drive opera ng e   ciencies.
   I believe, and our
research a   rms, that no
compe tor can match our
experience. This is a key
di   eren ator that gives us
the right to win and access
to the largest total
addressable market in the
used car space.   
And    nally, we con nued to focus on driving down cost of
goods sold by pursuing incremental e   ciency
opportuni es across our logis cs network and
recondi oning opera ons. We achieved savings of
approximately $125 per unit this year and an cipate that
we will achieve at least another $125 per unit in    scal
2026. This exceeds the ini al $200 target that we set at
the beginning of    scal 2025. These e   ciencies support
a   ordability as we pass savings on to our customers and
also support our margins.
Commi ed to Our Associates and Communi es
None of these achievements would be possible without
our more than 30,000 talented and dedicated associates
na onwide. CarMax associates foster our incredible
company culture, and they are the reason we have been
recognized by Fortune Magazine for 21 consecu ve years
as one of the 100 Best Companies to Work For   . This is a major accomplishment that we all celebrate.
As part of our core value of pu ng people    rst, we also remain commi ed to championing a culture of
inclusion, connec on, and belonging that values diversity of perspec ve, experience, and thought.
Since 2003, CarMax and The CarMax Founda on have invested more than $110 million in the
communi es where we live and work. This year, we con nued our steadfast support of nonpro   ts in our
communi es and 100% of our loca ons par cipated in volunteer events. We con nue to amplify our
social impact in collabora on with KABOOM! and Points of Light. Together, we mobilized thousands of
associates for days of service crea ng las ng impact on neighborhoods near our loca ons by building
playgrounds and transforming community centers, gardens, and schools. Under the leadership of The
CarMax Founda on, we developed new and innova ve ways for our associates to give back in their
communi es.
Finally, we con nue to make meaningful progress in reducing our environmental impact and remain on
track to achieve our calendar year 2025 GHG emissions reduc on target.
I welcome you to review our upcoming 2025 Responsibility Report for more informa on on these
ini a ves and more.

Looking Ahead
I am excited for the future of our company. As we look ahead to FY26, we will leverage and enhance our
capabili es to drive growth through be er execu on, innova ve e   orts and upleveled experiences. I
believe, and our research a   rms, that no compe tor can match our experience. This is a key
di   eren ator that gives us the right to win and access to
largest total addressable market in the used car space.
   I   d also like to call out the the
I   d also like to call out the power of the earnings model we
power of the earnings
have built, which is designed to deliver an earnings per
share growth CAGR in the high teens when retail unit
model we have built,
growth is in the mid-single digits.
which is designed to
deliver an earnings per
share growth CAGR in the
high teens when retail
unit growth is in the midsingle digits.   
To our associates, thank you for living our values every day
and for taking care of each other, our customers and our
communi es. You are cri cal to our long-term success.
I would also like to thank our shareholders for your
con nued support and interest in CarMax.
Looking ahead, I am excited for all the work we will be
doing to con nue the posi ve momentum we drove in FY25 and to con nue to create las ng value for
our associates, customers, communi es, and shareholders.
Bill Nash
President and Chief Executive Officer
April 11, 2025



shareholder letter icon 5/8/2025 Letter Continued (Full PDF)
 

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