Short answer
Carmax Inc (KMX) filed its fiscal 2016 10-K annual report with the SEC on Apr 22, 2016.
- Top risk flagged: CFPB supervision under Dodd-Frank Act: Authority over CAF became effective August 2015
Carmax Inc FY2016 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- No-haggle used-car retailer integrating retail sales, consumer sourcing, wholesale auctions, financing and related services
- Fiscal 2016 retail sales reached 619,936 vehicles, with nationwide online inventory exceeding 55,000 vehicles
- Digital shopping emphasized: 88% of vehicle buyers first visited CarMax online
- CAF financed 42.8% of retail used-unit sales and serviced 709,000 accounts in a $9.59 billion portfolio
- Workforce totaled 22,429 associates, including 5,872 commission-based sales associates
Management Discussion & Analysis
- Revenue $15.15B, up 6.2% YoY, with net earnings up 4.4% and EPS up 11.0%
- Used vehicles best segment: $12.44B revenue, 619,936 units, gross profit $1.34B, up 5.5%
- CAF income $392.0M, up 6.7%; interest margin 6.1% vs 6.5%, loan-loss provision $101.2M
- Adjusted operating cash flow $908.2M; capex $315.6M; share repurchases $983.9M
- Outlook: $450M fiscal 2017 capex plan; risks from competition, funding costs, credit losses and warehouse renewals
Risk Factors
- CFPB supervision under Dodd-Frank Act: Authority over CAF became effective August 2015
- U.S. recession, unemployment, or credit deterioration: Lower demand, CAF profits, and late-model vehicle supply
- Inventory sourcing vulnerability: Online appraisal tools divert trade-ins to competing dealers, increasing reliance on less-profitable auctions
- Online disruption from search engines and classified platforms: Reduced carmax.com traffic and retail margins
- CAF securitization dependence: Market disruption could force temporary curtailment of loan originations
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