CarMax Inc

Good morning. My name is Carol, and I will be your conference operator today. At this time, I would like to welcome everyone to the CarMax fiscal 2021 fourth quarter and year-end earning conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. I would now like to turn the call over to Stacey Froehle, Vice President, Investor Relations.

Good morning. Thank you for joining our fiscal 2021 fourth quarter and year-end earnings conference call. I'm here today with Bill Nash, our President and CEO, Enrique Mayamora, our Senior Vice President and CFO, and John Daniels, our Senior Vice President, CAF Operations. Let me remind you, our statements today regarding the company's future business plans, prospects, and financial performance are forward-looking statements we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current knowledge and assumptions about future events that involve risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, the company disclaims any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see the company's Form 8K issued this morning and its annual report on Form 10K for the fiscal year ended February 29, 2020, filed with the SEC. Should you have any follow-up questions after the call, please feel free to contact our Investor Relations Department at 804-747-0422, extension 7865. Lastly, let me thank you in advance for asking only one question and getting back in the queue for more follow-ups. Bill?

Thank you, Stacey. Good morning, everyone, and thanks for joining us. We have a lot of exciting news to cover today. Our comments will focus on material fourth quarter and fiscal 2021 performance insights, updates on our digital enhancements, and, of course, the Edmunds acquisition, which we announced this morning. Then we will open it up for your questions. For the quarter, total retail used unit sales were down less than 1% from last year's record sales, and used unit comps were down 2.3% when compared with the same period a year ago. It's worth spending a moment on the events driving our results for the fourth quarter. As we discussed on our last call, entering the quarter, retail sales were pressured due to a surge in COVID-19 cases, which tightened occupancy restrictions and shelter-in-place orders. Sales began to accelerate towards the end of December and into January. By the beginning of February, we were trending towards mid-single-digit comp growth for the quarter, excluding the impact of leap day in the prior year. However, starting in the middle of February, retail sales were affected by the severe winter weather across a large portion of the U.S., closing more than 65 stores in one day. Sales were also impacted by delays in tax refunds relative to last year's timing and a lower inventory position due to COVID and weather-related production constraints. On a two-year stack, total retail used unit sales for the fourth quarter of FY21 were up 13.8% and used unit comps were up 8.7%. March sales were robust when compared with both COVID-impacted March last year and a record March in 2019. During the month, the initial distribution of tax refunds and stimulus checks began, weather improved, and customers continued to respond favorably to our ongoing digital enhancements and other strategic initiatives. In addition, the underlying metrics we track, including website visits, online progression, and activity at our customer experience centers, or CECs, indicate continued healthy demand for used vehicles as we head into April. Full year market share data indicates that our share of zero to 10-year-old vehicles in our current comp markets fell from approximately 4.7% in 2019 to 4.3% in calendar 2020. We had strong momentum entering the year and were gaining significant market share up until the start of the pandemic, when 95% of the country was under shelter-in-place orders and approximately half of our locations were closed or under limited operations. As markets reopened and our omnichannel experience was launched nationwide, we began gaining market share again. During the last five months of 2020, we saw market share gains, and we expect those gains to accelerate in 2021. Atlanta, where we have been in operation since 1995 and our most mature omni-channel market, continues to outperform the company, maintaining its market share in 2020 despite pressure from COVID. During the last five months of the calendar year, our market share in Atlanta increased 13.8%. Over the past two years, since we first introduced our omni-channel experience, our market share in Atlanta has increased 10.9%. Retail gross profit per used unit for the fourth quarter was $2,086 compared with $2,195 last year. This GPU is consistent with our expectations and commentary on the last quarter's call. It reflects the impact of the expanded pricing and marketing tests we rolled out in select markets in combination with our national multimedia marketing campaign and the improvements to our omnichannel experience. Early results for these tests were positive, so we expanded to more markets in the quarter. We're going to continue with testing while also monitoring macro factors. We expect to maintain attractive margins above $2,000 in the first quarter. Enrique will provide additional details around the profitability flow through on different aspects of our business that are contributing to the success of these tests in just a moment. Our wholesale business delivered another good quarter when you consider the impact of one less auction day compared with the same period last year. For the fourth quarter, wholesale volume was down 1.2%. Wholesale gross profit per unit was comparable to the prior year at $990 per unit. We estimate the one less auction day in this quarter impacted the number of wholesale units sold by several percentage points. Now, I'd like to turn the call over to Enrique to provide more information on our fourth quarter financial performance, and then to John, who will provide additional detail around customer financing. Enrique?