CarMax (KMX) 21 Jun 192020 Q1 Earnings call transcript

Company Profile

Participants

Katharine Kenny	VP, IR
Bill Nash	President and CEO
Tom Reedy	EVP and CFO
Stacy Frole	VP, IR
Scot Ciccarelli	RBC Capital Markets
Brian Nagel	Oppenheimer
Armintas Sinkevicius	Morgan Stanley
Sharon Zackfia	William Blair
Craig Kennison	Robert W. Baird
Nicholas Zangler	Stephens
John Murphy	Bank of America Merrill Lynch
Seth Basham	Wedbush Securities
Jacob Moser	Wolfe Research
David Whiston	Morningstar

Call transcript

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Operator

Good morning. My name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the CarMax Fiscal 2020 First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

you. Thank like Investor call Relations. now Kenny, to turn President, Vice to would over the Katharine I

Katharine Kenny

conference as Good all President our fiscal earnings Executive for Thank and joining I'm morning. you, and and our XXXX Tiffany. Chief Executive Vice first Tom Nash, President with Bill usual Thank Officer you call. our here Reedy, quarter CFO.

to our financial the company's future we prospects and performance Let the forward-looking the make Harbor Private me business Safe regarding pursuant remind provisions of statements today XXXX. Reform Act events statements Litigation uncertainties you results expectations. that are management's on current that statements risks Securities materially involve and of that future These about differ are cause actual our to based assumptions could and knowledge from that plans,

statements, and company obligation projections intent or forward-looking update providing any other to disclaims them. the In

XXXX, additional these on ended on XX-K affect for For the annual expectations, please XXth, with factors could year report important the company's Form filed information fiscal the SEC. that see February

and follow-up. last getting queue let the advance in in back question you for asking thank one you. for and Bill? Lastly, Thank me time,

Bill Nash

you, morning Katharine. thank and for us Thank today. everyone joining you Good

you all very who you she your us program wish for it I take is July, Before in I exceeds started, that over the sure do thank past agree IR retirement. your that and want be is her successful you retiring this Katharine, so has of best moment years deeply XX will the we I a missed. to Katharine expectations. personally to Katharine hope I'm run at the get of many know a end call. last

as very background. closely a together Frole, already in introduce to smooth ensure who to and Relations' Katharine transition over Stacy And has like working strong a of similar last the to been Katherine know, also months Investor you have Stacy IR many communications. I'd

and Katharine. Stacy congratulations, again, welcome So,

Katharine Kenny

Bill. Thanks

Bill Nash

turn on omni-channel the well. will will call questions. first financials start to detail update very to continues For open discuss our which quarter more over with in up our I'll highlights. Tom rollout, our we it an today's your for to then Then I perform call, providing before

a to As this of strong including increased the X.X% strength in quarter comps solid net retail to you is combination increase up XX.X% a tax the fiscal and and very environment; are Conversion quarter. by unit and refunds to start a of execution, delay enhancements earnings total pleased read sold. earnings a XX.X%. with a This We customer unchanged. XXXX XX% growth morning, of used robust experience; announce units used our many we traffic store increase the release up factors, in remained our relatively a was in our for lending supported EPS result which while first in into year-over-year, achieved February

Our ago. website grew traffic XX% from a year

unit Gross the per at with was quarter consistent year for profit prior $X,XXX.

drive in to to us margins inventory allowing systems, while management continue We offering prices. attractive our efficiencies maintain

quarter versus sales in with we buy the all-time This year-over-year. of store an year well up the a higher reported retail our quarter, strong base wholesale to growth X% the result units addition In as ago. volume the as in was for rate first record

well. compared the delay per an from with was tax profit of strong benefited in likely $X,XXX, increase wholesale Gross unit X.X% as year. wholesale performance last This refunds

about our XX% up less four-year-old X% in than of As XX% XX% percentage accounted year. XX% this for and Total of versus of first quarter sales, vehicles time zero sales, SUVs trucks decreased to a from to last the last year.

I'll this over turn Tom. to At it point,

Tom Reedy

everybody. Thanks Bill and good morning

strong This gross EPP profit, of combined along net used increase was performance partially the revenues, which increased of were by strong increase EPP new with saw driven related we in an reserve. which in the reflecting quarter, revenues margins, $X remember, revenue the the adoption quarter, largely last other offset XX.X%. million and volume Also effects to For growth year's the in included penetration cancellation by first recognition in an increased XX.X% standard.

with front, million. spend Factors $XXX beginning XX% the investment platforms quarter in On of growth for our quarter represents opening growth; which increased digital unit the in $XX expenses share-based higher the initiatives. XX and well costs or our compensation million XX.X% continued SG&A base; variable store expense; included the since $XX year, increase the last in to SG&A our sales stores first of technology impacting a per associated a as strong as

$XX investment and a share-based was show unit midst $X,XXX, $XX increase per to leverage pleased used compensation. in per the SG&A the decrease year-over-year. We're substantial unit of in

timing While the this. portion efficiencies did our offset were the with growth we continue from to differences, will of some a focus on and to benefit able quarter efforts spend

in quarter. stock our for the Our rate basis effective of tax to income million. impact provision translates the for settlements benefited option an XX taxes from by reduction This point $X.X

XX.X% XX.X% in and saw finance. CAF accounted the to higher XX.X% quarter, CAF X year's with turn Tier for credit penetration I'll quarter. application across first we three-day compared sales X for XX.X% versus last customer of XX% compared performance ago. Tier strong of while and accounted volume with Now, tiers. In net payoffs last XX.X% a all was year year,

space. in allocations the more pronounced increased Tier X board, the across we X was and While definitely saw Tier it

Year-over-year, the loans CAF rates. sold originated in offset X.X% the penetration by to increase somewhat as by was billion in CAF net decrease cars net grew used $X.X

fourth X.X% weighted during ago originated charged in compared contract customers X.X% quarter, the loans a year For the average X.X% to increased rate the quarter. to and with

CAF the and million impact loan receivables slightly by offset X.X% growth versus margin margin. a and The income QX. was was first compared of just year ago increase a in and X.X% was average year. X.X% This portfolio $XXX to provision the compression $X last managed a for up slight interest quarter in in million of losses

versus growth with from unfavorable some QX million $XX versus was experienced which a related in loss $XX into the overall translates million losses. allowance the our in The arises period. for The year provision in along for portfolio expectations, increase prior loan increase losses

managed $XXX in X.XX% represents receivables X.XX% of last ending QX of million at and in QX. allowance The X.XX% year versus

allowance mix. four and within it the points While given strategy well expectations portfolio increased basis our remains origination range our sequentially, has a modest of

we structure. As last committed shareholder quarter, we our are investment discussed to continued and associates, enhancing capital our in through our value business

Tennessee. McAllen, and opened center. June, During Waco the in quarter, our in in Texas; we two Atlanta Earlier markets, customer we opened second new three stores, our Memphis, store and experience

experience next the XX two Over customer months, centers. anticipating and opening XX more stores we're

the XXXX, we have million. program X more remaining in we During shareholders stock buyback current the than approximately for repurchased first starting have quarter, $XXX billion we authorizations. returned to million billion $X.X in $X.X shares Since and

over to back Now, I'll turn the Bill. call

Bill Nash

Tom. you, Thank

consumers look on competitive with online, we we as unique the advantage. the continue And provides their provide a As of it's to that our believe with capabilities do to powerful towards the online terms anytime. more anywhere, significant and ability important in-store to us future, shop continue integration and them we

outperform comps over results still company very The early in and overall we and While performance are Once to again, both saw market we double-digit comp appraisal our quarter the in we last quarter. are saw strong sales the the the the Atlanta in first continues into carried stages, buys. pleased market. Atlanta we with

high is rest the lower. sales slightly remains a although experience of to percentage the company, our overall Atlanta. Our penetration finance max continues care penetration in of while to Home delivery it conversion, small similar is

we in last inefficiencies model. quarter, could of and markets some I We some in near-term, be omnichannel will be improve mentioned operations mature unique than our utilized. As to experience our do centers fully we however, the as our anticipate know customer current able believe that become experience more we efficient omni our

omnichannel our and and omnichannel customers reactions. that going based of and We for the key experiences in experience will one drivers remain comp be the we both right continue market are to We share on feedback associates and and of enhance direction moving growth forward. sales confident our capabilities their our

the we Kansas July. experience opened CEC, some one late City rollout. customer center, our be month, Atlanta opening in progress The updates on are Here in will and or of just this specific

Over We than XXX are process each on staff which will the later in CECs open also third the large this working associates. more time, a location, year. of will three

new Having convinced solution Atlanta the improve experience. CEC, customer well for our The systems. in our with our I'm store right that continuing technology spent integrates and this is to time some state-of-the-art is

Our associates experience. progressing exceptional are to and focus the on well-positioned providing and excited customer an online

of this the omnichannel With the Florida fiscal majority including to new of quarter, remain on our those track experience we we this to end We Virginia. and omnichannel of our rollout the North rolled the Later the opening month. of customers to the experience will provide year Carolina the majority earlier XXXX. by continue stores markets, in to Atlanta our CEC,

XX we're of on that built bring digital technology along As omni CarMax This the the to the and I've an capabilities. This and to to strength we're excited about said of tailor prior experience car life, past with the years model future customer. is new future. individual calls, we've great we the is leveraging We're a to that start, buying. off each can over

And your at take this point, we'll to questions. be glad

Operator

[Operator Instructions]

Scot of Capital. RBC Your the from question comes with Ciccarelli first line

open. line Your is

Scot Ciccarelli

Hi. guys. morning Good

might've as I a to we quarters I I regarding a little just a you relatively see shed still been as happened can't inflection quarter. guess more able XQ, that this I had point lot here. to -- of people omnichannel So, underwhelming to the bit XQ. early caused them hoping we was light that be just And the might rollout, the mean couple would inflection in we're term Atlanta guess, so you obviously, of what

can think for you be group. if provide that, that'll color on Thanks. fantastic the So, any more I

Bill Nash

Scot. Sure

a a environment, tax prepared but lending my me talked in let funds give more bit about So, little you rate bit I little color. remarks,

On The website but the the store. the store on a we only conversion. highlighted not execution, phenomenal getting job did face-to-face on the into folks improved conversion,

So, conversion we had success. great

quarter. logistics, some efficiencies, price up Our generally on And there. we vehicle are had job we pick as past, in in the a up efficiencies said passing phenomenal buyers picked we've when anytime, acquisition these this them we reductions. we Shipping did along

the there our some learning markets. out some I off -- main feedback based a nationally we've don't noticed, and have everywhere the experience been that or have rolled we things customer we had omni We in digital The new know initiatives. that's you've improvements if in website

new We new experience. search a have -- some

speed on improvements experience. our focused new some have on It's navigation. search really and We

then car the -- of other We overall little a a reflected played was think in of in thing that supply also good think little bit a is the for which And new used And was up factors I gap. into bit, auction felt this. that I movement couple a supply like us.

host majority individual one lift. any whole not which a is the different really it of was -- the none of So, factors, of

Scot Ciccarelli

because refunds tax of shift? were try obviously phenomenon, So, to you -- that's refund would tax kind out impact I of the how break the the estimate if was a and temporary like what the

Bill Nash

a last quarter. like we quarter, out rolled about tax so I quarter, Yes, into missed last thought mean, week's refunds of worth that's probably this what we we expected on

Scot Ciccarelli

Got it.

Okay. Thanks guys.

Bill Nash

Thank you.

Operator

line next Your comes Oppenheimer. with question Nagel the of from Brian

Your line is open.

Brian Nagel

for on my Thank taking question. morning. you good Congratulations quarter. nice Hi, a

Bill Nash

Thank you, Brian.

Brian Nagel

off, retirement. -- all been Katharine, pleasure been you first It's congratulations. these the years, with definitely congrats So, working so on a

Katharine Kenny

Thanks Brian.

Brian Nagel

And Stacy welcome.

Stacy Frole

Thank you.

Brian Nagel

metrics. -- looking want about from in -- a But the did unit at of now one So, question used comps follow you're question. credit the to if QX car shifts prepared up in in maybe comments you the inflection I significant on the my some talk to higher bit here QX, I want Scot's question, to my

So, to the a engaged to helped of at partners car extension little what -- question or be -- unit have little and a did on extent the -- part what the car looser comps, of either unit CAF used look appears as comps? is in what more I improvement group lending maybe used in what to extent seemingly more you credit

mean, just And was -- marketplace? the what see in then to what was a that we part was CAF, the it of of along a decision Or extent -- CAF conscious was reflection I lines, those in more that on happening of management? the

Tom Reedy

Yes.

all. its the origination quality One, So, of hit far are material questions. it's as the has and very consistent. at your changed We're strategy been originating, as always Brian, CAF structure testing, portfolio but we the not I'll

for particularly more about that's When much definitely you of a of I all penetration the remarks, prepared coming CAF generally a at but byproduct see mix mentioned it's -- application is, customers in. in lower the qualities, we mix, up how And as see did my end. -- where the pronounced in credit usually volume shifts it's

rate. as general, their attach Tier And that's the so going in X favor to Tier X and far as folks

in the both last and say wouldn't X Tier X year. quarter quarter, said, from our solid any the the different that what over I the improved of seen seen third we've half maybe performance in from back -- saw Now in space. we've partners, X very Tier last and Tier definitely last but it's

So, in on X, partners. of if the allocation stronger the we're you we apps quarter, year-over-year conversion. third And basis, of a Tier seeing our across some shifted remember,

so because on everything, earlier they're that, of all And same from But and think-- this seeing higher year cylinders all I conversion kind and the sequential think that happy their with perspective, as of we're Did I year-over-year. firing performed about we're hit performance. Brian or a

Brian Nagel

that No, definitely helps. Yes.

all is So, would it -- not as Credit months. mean, nothing up, to happened clearly as sum dramatic to help I sense you're significant few in -- at what -- just again, to we of I the -- any a acceleration not that? guess there's and at comps that over shifts what we though, look in credit credit in try last side the is saying was make

Tom Reedy

customer imagine, I you only of credit much offer strength a last you thing gets a than sale because a Tier say definitely X more would customer likely Tier help is would who go as is as to convert offer, year a The Tier CAF would more the convert offer. -- a down is vis-à-vis that's to to who the customer on be likely gets X a spectrum, a gets X -- who and a than

sales. -- can't the they're would've down that there's little those Tier a -- that more and they X gone fact stronger quantify many So, you bit so turned that of you really it. year-over-year, incrementally seeing would that they're volume into expect Tier can't with there's But wouldn't is X -- probably moving some approve you that parts to have

Bill Nash

was was one I about that just you factor the no the the different Yes. all there majority and of if was Brian, think reiterating, factors, lift.

Brian Nagel

you. Got

sorry I'm changed X -- there? what that? -- we So, balance the there and as to then belabor should so okay, how fiscal piece let this. think more any But think now is about view of get on we me just then, of a And we Tier the can or XXXX, -- how about color sustainability

Tom Reedy

by so a percent think said I just define year, little saw lender we back half we applications they I see of performance of what the over a last earlier, lender performance -- our into sale. what that convert

in that So, there's well as last of we them and space, since. over year conversion remained which half increase don't stable the obviously, back that its saw And control. also, that more customer we favors volume

Brian Nagel

thank Appreciate all Congrats the details. and you.

Tom Reedy

Thanks Brian.

Operator

Your next Stanley. Morgan the Sinkevicius with from Armintas line question of comes

open. line Your is

Armintas Sinkevicius

Good morning. Thank question. the taking for you

Bill Nash

morning. Good

Armintas Sinkevicius

that Atlanta be as I initiative should the comps continue using as a you about you these think we how omnichannel to would the around I get traditional out double-digit thinking Atlanta, how roll think from words, lift model? about back-to-back In other roll the commentary that initiative. you stores, the out the template? When again about now, and should How the compares quarters -- versus

Bill Nash

confidently going the can bunch Yes, every transfers, a of market, out wasn't into time thing only that new when experience guess only be remember, free advertising, the but the alternative different. we you it so things. the tell I to go Atlanta, expanded rolled And and pricing some lift whole delivery we is new -- a some had tests, we we is we had some had we new new I methods,

new is it. and roll tell out offer step-up new the consistent future only new delivery is I we'll we'll and that experience, you alternative we'll future absolutely among methods, experience, we the the advertise into As thing the website that market, be markets would

be at time. each we'll that, what's at the best individual and beyond deciding market But looking

to market So, take it's and that extrapolate really all hard kind one markets. of over future

Armintas Sinkevicius

the cost and much we and contextualize just Okay. efficiencies level your customer the centers. we SG&A think on and timing we one customer at And store the should will be spend grand in some you're is would helpful. the there? way experience opening How the that level? Or are of one SG&A see experience Just the also of here can attrition centers openings quarter? the in natural then up the then starting other about at store any be to second opening SG&A the third of side. there first that How You're

Bill Nash

Yes.

all, first for we this So, about leverage. of Tom earlier, quarter, as talked had some

going a we're CECs we the there as up. was are ramping timing wouldn't where little and expect -- advertising say ramp of store the really appropriately way Now, We and efficiencies in far bit but the up we've and we're of to pick as them through the concerned, store the that in realized still up, the our as CECs. period spend staffing getting I between up would a staffing CECs the because our transition line we're much we

I So, the the yet from have optimization that. think we CECs, to see

Armintas Sinkevicius

it. appreciate I Okay.

Bill Nash

Sure.

Operator

with question comes Sharon the next Your of from William line Blair. Zackfia

Your open. line is

Sharon Zackfia

Hi morning. nice just to on a there. high go to see out And say, good comp nice Katharine it's want I

So, have Katharine. a good retirement,

Katharine Kenny

Thanks.

Sharon Zackfia

the the Yes, you the up, out that. February, said CECs how when country kind rest? I plan omnichannel visualize -- whole the country the is do you this is how I to know of I deliver you kind on of what but roll around mean for markets the next interesting what the timing the presumably of are in question following and across I'd majority experience? guess CECs, by necessary many across be

the kind those labor past? is startup inefficiency just four-month that's or alluded three to you've XXX at about think causing of of folks in that that it think inefficiencies, we I those when then really CECs the And the

Bill Nash

Yes.

some point, ones. this of going that the selling locations There three activity, think country. to about three think lift i.e., we being feel this so talked the if would at major good you one-off do I up activity. have be ones considered the we ones; big of to think the about location you two small opening the state is three three be the about going we big opened The I a in year. just of those selling states. to state probably we're will We're handling So, those have that to will regulations, But to -- omni. more in We would a those really be the due to we believe I Sharon, have first have bulk -- CEC the as

like expect to time, out efficiency, I take last one store CEC. we as least person for every at the in said we would far the person of As add that

Now we've to just do that normal chosen through attrition.

there So, because be handle rolling it turn progressing overstaffed will on months have day longer few to early calls the that they of out design staff way. leaves and to e-Office by our in because the stores no some inefficiencies are couple we customers omnichannel, and

most in So that work -- take that for two but time part during associates we're like the or period. three-month our I we can that a period. locations, of we think And through most sure over care making

Sharon Zackfia

Okay. Thank you.

Bill Nash

Thank Sharon. you.

Operator

the Baird. comes with question next Your line Kennison of Craig from

open. is line Your

Craig Kennison

my Hey Katharine, you Thanks be for questions. good will morning. taking missed.

Katharine Kenny

Thank you.

Craig Kennison

got So, market lots that strategically good channel. be opportunity questions, disruptive whether about reason sense and the but thinking also to wholesale in those We've are as How of there. there's makes you the the that wholesale disruption an me, in focus and there's are disruption emerging platforms unfolding to digital on dealer-to-dealer retail there? channel. omnichannel more for And

Bill Nash

of competitive a I a for And huge us. think it's it's great I huge but And times a question, people the a wholesale, Yes, advantage. overlook lot think Craig. business it's

we're want our so give to a dealers retail wholesale Just great make as like we customers, different sure our with testing things. experience and well, we

selling. we've example, For online some tested

like over move miles. to at of in make retail. a still old, to mind, changes XXX,XXX but is though, a want at great that, vehicle continue in still we're our XX There dealers position we look are come and think that in years are who'd Keep space lot average just I to and

but another we it's one that in it's of on call So, really initiatives. the here, haven't one focused this

business things to have well. that part as of We the we're that several working improve on

Craig Kennison

you. Thank

Bill Nash

Thank you.

Operator

with next question the line comes Nelson Stephens from Inc. of Your Rick

line open. Your is

Nicholas Zangler

unit going? Rick curious to Atlanta a dig Zangler best sales Hey, this is lift, market last. quarter Nick share guys. in digits was little This for quickly. Congratulations on his bit Rick. willing How's I'm the the wanted I if it to the on definitely obviously, just sends regard. versus double again. in you'd Katherine. to performance, in guess, I spread maintained The whether be or that

company Obviously, that did saw market? Was last maintained within quarter? quarter Was I that obviously, this a spread at that the you implied spread double-digit -- comps. we mean, total X.X%. X.X% The

Bill Nash

even Yes. talked again I them we would you did little Nick, this quarter. have what They the quarter; about comps a bit increase is last tell double-digit quarter. last we over

that. we So, about feel good really

Nicholas Zangler

tariff Okay, sales. demand implications on great. And thoughts just your used vehicle for general unit on

even You this tailwind perceived you. be Thank be more vehicles are potentially believe that used going as could affordable a to forward.

Bill Nash

hard at tell it's this to Yes, point, Nick.

of You close probably know to. as we'll That's we outside in on states. a the as we're Obviously, less from one anything do. that stay little much coming reliant bit

So, would that's it's know. I but the to too know theoretically, a I answer think early. don't that. thing, don't good you

Nicholas Zangler

Great. Thank very much you guys.

Bill Nash

Thank you.

Operator

America. next comes with the John line of from of Bank Your question Murphy

Your line open. is

John Murphy

We Good morning to congrats guys staying and touch. forward look Katharine. in

But what's appears your your one stores time the going and you stores kind on here, omnichannel two just with productive. maybe and question about more of Bill, more current that if parts. areas it's got slightly much it asset-light think become need to will might cover efforts -- CECs over business we less in that Just get and the might

without maybe the presence may than a that I you presence physical CECs has future, quarter significantly be the not past? with how of mean, do As future, in far think a been markets lower mean, I the you into or think you physical these about can new just but go it this sort

still returns time? better the be maybe and same or you even And about much be intensity over might think when GPUs new put asset returns this in much order, can then that world may up significantly lower you GPUs the also, lower because

Bill Nash

Yes.

I that about I like huge think with stores experience. a we of us So it, huge that in infrastructure We we've way this and XX last think will like allow first have all, benefit omnichannel a our over feel the do we feel years. are said built to -- my earlier John, remarks, we the the advantage this competitive

how how the your store think think we to about future do question, we it's of want sales and growth do I about future? in be to customers in leveraging gain Now able reaching to adding combination We a to think market we going also that to physical and and haven't the continue to grow share footprint some to reach want going continue in to and past. ways additional existing we stores, it's be but been the our

be means runway ends And really and of we it have look customers up we if couldn't customers off of before at more stores. that that. you for the -- with of plenty get servicing runway we're lopped that at we if of infrastructure, stores, physical end good if we'd get service But the at few stores if the reaching that you that because a thrilled out existing growth --

I to it's of think going a still So, two. -- the but combination do be

still and related. a decision point, think charge this would the to don't maintain those two we necessarily are our reason we don't As different -- that GPUs, there's points. and but omni progress why omni customers. at the are we distinct that separate, any experience for experience far GPU can't And rollout omni and GPU we the continue versus the decision two us, goes, as what is We think

John Murphy

early be saying, I XX%, XX%, and maybe no read you're this are that of approach. reach that seen what's I stranded Atlanta more -- we've Florida, that's XX%, rollout XX% And silly. there's able existing hey, because XX%, to certainly think But would that's suggest omnichannel this customers far in going so we of asset, on never might that stores

I very be going productive. they're still think to

you be? much I still here as mean, I opportunity that read -- you any in may material-less would go will think real But that's a it what forward, I efficient. just use be you seems might Is your to but you mean able early mean physical stores? you about there be that like opening footprint more could

Bill Nash

lift this Yes. No, get infrastructure. XXX existing our what it's in located. of have point. at keep only way kind too can But we They're mind; know we to all out strategically stores early of

beneficial have areas be we stores. have holes; where some to have We it would

to of able go a see get experience. much be lift being how we a combination, So, we'll to and again, going to I by continue improve it's back can omni to the

John Murphy

Thank Great. much. you very

Bill Nash

you. Thank

Operator

next comes Seth Basham line with the from Your Securities. question of Wedbush

Your is open. line

Seth Basham

morning Thanks a you. lot. free Good around question Katharine, we'll transfers. is My congrats miss and

you additional a of whether other Atlanta. basis, You in year-over-year driver improved not the out a that quarter in being how talked about sales you're Can for rolling and free about on free transfers talk many or transfers increased example to markets?

Bill Nash

in decision significant we necessarily not It's new market a of Yes. roll we place. we'll Free out. as a make markets, within single that And that transfers, roll forward that we'll a factor. every not we do while opened it just up, play it's each

Seth Basham

used follow-up, boosted the comps? we're think thinking then about do it's very And think to a it. how that do you sustainable? seeing now, right car Got as spread new you that much And wide

Bill Nash

-- Well, improving. said I data think shows I mean, you our it's wide, very

saw some the quarter. we think improvement fourth the I part in latter of

I think in the it's it's But that would certainly improvement has where places continued. I at isn't past. say been

-- as factors. it's I it's one think it's -- many the because trend just think don't just cited do but again, a it I of So, good, while improving, I is I thing the

Seth Basham

Thanks.

Bill Nash

Thanks Seth.

Operator

Bottiglieri line of question research. Chris with Wolfe Your the from comes next

open. line Your is

Jacob Moser

Jake Hey for guys, the actually question. Thanks it's Chris. on for taking Moser

Bill Nash

morning. Good

Jacob Moser

Good morning.

time. employees? where then where in effectively the same So, it home Florida, delivery launches using trending delivery might two is process a you're I office And know and mobile you uptake color said recent in Atlanta it's a and with you low more are get percentage curious for home to have you today, over of but for how the your that think on I'm

Bill Nash

Yes.

this far don't point. it's any we too to time. as as that, can We'll at So, home detail continue delivery, tell think monitor we go have Jake, where update that early but over really to

the delivery separate As the we the store difference a as went the team. going to in in Atlanta, leverage forward, associates. as roll versus we're one in far and delivery with we existing home In Florida, home Florida process, we're Atlanta, -- leveraging

We stores, deliveries have express responsible a new as position well in home pickups. as and be the for they'll

a as take to the about the essentially, We've of drive customer about test of store, XX to when do a thing. the online, do just than those express that but learn everything in reminder, want the kind test allows still minutes, learn options, options. a into And come done especially the but really just drive, some less customer pickup doesn't

those so And that will the handle be ones that. folks

this as at mobile point, office, far take two interested I out, the the As going is unit have go appraisal still we business -- the mobile inventory the One the that mean, will other out. has customer will office that associates in. yes,

Jacob Moser

Thanks Great. right. the taking All for question.

Bill Nash

Sure.

Operator

next Your Whiston question David the with of line comes Morningstar. from

line open. is Your

David Whiston

Thanks. be so team, Good What know now? satisfied you people with? are not you at had corporate management I say morning. pushing Or address I doing level maybe really the at store you the a guys internally actually look could as are right actually the you way people want awesome here, what better just level? and when guys quarter or we what, other to it a

Bill Nash

is team Well, store of job. Yes. all, the phenomenal first a doing

They're that organization, the that it to you associate, the change teams about They're and evolve. meet glad If really store we're an we're excited to have glad we're to every single as through does think occasion. business. continuing continuing it. impact all the They're the risen about going

feel we so good that. really And about

We we've Now, capabilities. of past, I opened still to of some we just up the some them that about design are inefficiencies have in opportunity continue think them lot are as by roll this of a and lots we've of because and out. here talked we have new

And so really push excited what get our about, consumers. experience we're our first to is this out omni

We as But it equally a is most experience associates. it's important be the for available. to our the be as have make a efficient experience We to got to profitable system customers, want great great possible. it's want to for got

that sales we're overall with share. on market of growth lots to grow things there's to focused and long-term continue So the

feel I the it. that you, are about improve with So, continue we and opportunities have great feel we to to where be I to great honest about

David Whiston

your And of inefficiencies, to said the or you the enterprise follow-up one whole lot When you omnichannel referring Thanks. on a rollout? just there were comment.

Bill Nash

specifically other Well, are talked of omnichannel. settled opportunities the organization. But we to be look I kind where -- inefficiencies think with continue the I to waste for the in are. think content never to I we to efficiencies have We're of that about parts

SG&A, for We continue push on to there. efficiencies looking

reconditioning for to continue process. look efficiencies efficiencies in We buying our We logistics. for look in

earlier whole think the inefficiencies specifically in throughout I to I organization, So, speaking there's was opportunity omni. but the

David Whiston

Katharine, Okay. Thanks. And congratulations.

Katharine Kenny

Thank you.

Operator

Instructions] [Operator

with Your comes of RBC the from next line Capital. Ciccarelli question Scot

Your is line open.

Scot Ciccarelli

Thanks guys.

debate Just one here, the following what quarter was queue. Katharine's rule last about know question the back marketplace in stack two-year some there in Atlanta. in was Will, we so the regarding

last this rollout, I on have back guess hoping in quarter? forum, that in of I basis in seen you've stack quarter specifically omnichannel then help both was So, we're can now what course, the a you you two-year Thanks. us and where if public Atlanta, understand

Bill Nash

of for Yes. getting all, queue. back Scot, in the first thanks

just You rules. but as followed we on last this earnings Katharine that two-year you quarter, Yes, last the think last quarter we I smile her it last quarter, like well. talked stacks two-year actually positive so about call stacks quarter. had made positive just don't

Scot Ciccarelli

Can XQ? this higher you saw tell than was you whether in lower us or quarter what

Bill Nash

quarter was higher. This

Scot Ciccarelli

is Thanks. Katherine to my is goal always it. And happy. make Got

you go. there So,

Bill Nash

Thank you, Scot.

Operator

next comes Basham the Seth Your Securities. question line of with from Wedbush

Your line is open.

Seth Basham

that losses noticed me. quarter. response experienced In for trends Obviously, question for loan to some securitizations. recent It's just in going more you about penetration some in lower Or how selling on follow-up terms that forward? thinking Thank your expected We've loans? rate? around you any the you for are did plan tightening One do CAF. with you you. than Thanks. the higher deterioration this of that Did quarter trend,

Tom Reedy

Yes, future a is, will the the penetration be. of result losses of And the through was as this quite spot. it a purely what mix our as I represents allowanced the coming it door. best comfortable Obviously, rate mentioned, estimate quarter is

comfortable. portfolio, continue the it adjust losses extent wouldn't any changes. to highly that the and foresee so very and future still we're future And comfortable is financeable, is. as Obviously, originating caveat we're to with But appropriate trend we'll it this very that monitor so rate. a profitable to We're highly at point, the that I

Seth Basham

you. Thank

Operator

further to I no questions this time. our in There conference are presenters. back queue at turn over the

Bill Nash

It's proud excited exceptional we're commitment can our innovate of comments We're experience, dedication that's of Listen, we're sure you our was associates. the results the what one from to reason to and we're desire to our really future. our today an tell successful. that hard Tiffany. and I'm about to and values, Thank today work, discussed on. results their customer asked, you, their unwavering product of today, we the are working The the the goes results this back of questions

work for you CarMax, we your And thank with so you those again every day. our talk you It's And you of interest. continued an for to on Thank the you to for support absolutely do will side-by-side next thank for of you. quarter. associates, honor of what call, and your all

Operator

conference today's call. concludes This

You may disconnect. now

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