10-K annual report · filed Apr 21, 2017

Carmax Inc (KMX) FY2017 10-K Annual Report

Short answer

Carmax Inc (KMX) filed its fiscal 2017 10-K annual report with the SEC on Apr 21, 2017. It reported revenue of $15.9B and net income of $627M.

  • Top risk flagged: Consumer-finance compliance exposure: federal and state laws governing vehicle financing, advertising, and sales, plus potential license suspension

FY2017 key financial metrics · XBRL

Revenue
$15.9B
Net income
$627M
Gross margin
13.8%
EPS (diluted)
$3.26
ROE
20.2%
Operating cash flow
−$468M

Source: XBRL data from the Carmax Inc (KMX) FY2017 10-K on SEC EDGAR. USD.

Carmax Inc FY2017 10-K analysis

AI summary of each section, grounded in the filing text

Business Overview

  • Integrated used-car retailer, wholesale auction operator and captive auto financier, centered on no-haggle pricing and omnichannel shopping
  • Nationwide inventory exceeded 65,000 vehicles, with mobile apps and online transfers supporting customer choice
  • Retail scale: 671,294 used vehicles sold, plus 391,686 wholesale vehicles at approximately 95% auction sales rate
  • CAF financed 44.2% of retail used-vehicle units and serviced approximately 808,000 accounts in a $10.68 billion portfolio
  • CFPB supervisory authority over CAF became effective in August 2015, heightening regulatory oversight of auto finance operations

Management Discussion & Analysis

  • Revenue $15.88B, up 4.8% YoY, driven by used vehicle revenue of $13.27B, up 6.7%
  • Gross profit $2.18B, up 8.2%, with margin 13.8% vs 13.3%; other gross profit best, $369.0M, up 26.3%
  • Wholesale gross profit worst, $362.6M, down 6.6%; wholesale margin 17.4% vs 17.7%
  • Adjusted operating cash flow $746.6M, capex $418.1M, and share repurchases $564.3M
  • Outlook: fiscal 2018 capex approximately $325M; risks include CAF margin compression and higher loan losses

Risk Factors

  • Consumer-finance compliance exposure: federal and state laws governing vehicle financing, advertising, and sales, plus potential license suspension
  • Economic downturn risk: concentrated sales exposure in the Southeastern U.S., California, Texas, and Washington, D.C./Baltimore
  • Inventory sourcing vulnerability: online appraisal tools and dealer competition could shift profitable trade-ins toward third-party auctions
  • Digital disruption from online and mobile vehicle platforms, search engines, and classified sites weakening carmax.com traffic and margins
  • CAF funding dependence: securitization-market disruption could force temporary curtailment of auto-loan originations

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