CarMax Inc

Ladies and gentlemen, thank you for standing by and walk through the Q2 FY22 CARM-X earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to your host, David Lowenstein. You may begin.

Thank you, Kevin. Good morning. Thank you for joining our fiscal 2022 second round Quarter Earnings Conference Call. I'm here today with Bill Nash, our President and CEO, Enrique Mayor Moore, 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 28, 2021, filed with the SEC. Should you have any follow-up questions after the call, please feel free to contact our Investor Relations Department at 804-747-7000. 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? Great. Thank you, David, and congratulations on your new role. Welcome to the call. To everyone else, good morning and thank you for joining us. As you read in our earnings release this morning, we delivered a record level of used sales for the second quarter and an all-time record for wholesale vehicle sales as well as robust CarMax Auto Finance income growth. For the second quarter of FY22, our diversified business model delivered total sales of $8 billion, up 49% compared with the second quarter of FY21, driven by higher average selling prices and volume gains. Net earnings per diluted share was $1.72, down 7 cents from a year ago, as we rolled over last year's pandemic-driven expense reductions and also continued to invest in our growth. Across our retail and wholesale channels, we sold approximately 420,000 cars in total, up 20% versus the second quarter last year. For the six months of FY22, we've sold approximately 872,000 retail and wholesale cars combined. We also bought 59% more cars from consumers in the second quarter this year versus last year and achieved record self-sufficiency of approximately 70%. Our omnichannel platform, unique customer offerings, solid execution, and macro factors are driving performance across our company. In our retail business, total unit sales in the second quarter were up 6.7%, and used unit comps were up 6.2% versus the second quarter last year, despite headwinds from inventory levels, staffing, and overall used car valuations. Our teams made steady progress in building our saleable inventory during the quarter and we achieved sequential growth each month despite the strong retail demand that carried into the second quarter. While it remains below our targeted levels, we are on pace to grow our saleable inventory during the balance of the year. In addition to strong unit sales, we reported $2,185 of retail gross profit per used unit in line with our historical second quarter performance. For wholesale, units sold were up 41.4% from a record second quarter last year. Wholesale gross profit per unit was $1,005 compared with $1,086 for the same period last year. The strength in wholesale units was primarily driven by the ongoing success of our instant online appraisal offering that rolled out nationwide on CarMax.com in February after launching on Edmunds.com last year. We also benefited from still elevated valuations of used autos in the broader market. CarMax Auto Finance, or CAF, continued to deliver solid results with income of $200 million. In addition, CAF and our partner lenders delivered strong offers in all credit tiers, though we did see a sequential decline in Tier 3 volume relative to the first quarter. John will provide more details on customer financing and CAF contributions shortly. Now I'd like to turn the call over to Enrique, who will provide more information on our second quarter financial performance, followed by John. After that, I'll update you on the progress against our strategic priorities and then open up the call to Q&A. Enrique?