CarMax Inc

Thank you for standing by. Welcome to the third quarter fiscal year 2022 CarMax 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 will need to press par 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press bar zero. I would now like to hand the conference over to your speaker today, David Lowenstein, AVP Investor Relations. Please go ahead.

David Lowenstein Thank you, Jerome. Good morning. Thank you for joining our fiscal 2022 third quarter earnings conference call. I'm here today with Bill Nash, our President and CEO Enrique Mayer-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 1985. 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 8-K issued this morning and its annual report on Form 10-K 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 804-747-9000. 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. Good morning, everyone, and thanks for joining us. We're very pleased with this quarter. We delivered record levels of used and wholesale sales as well as EPS for the third quarter. We also delivered all-time high margins in both used and wholesale. For the third quarter of FY22, our diversified business model delivered total sales of $8.5 billion, up 64% compared to the third quarter of FY21, driven by both higher average selling prices and volume gains. Net earnings per diluted share was $1.63, up 15% from a year ago. Across our retail and wholesale channels, we sold approximately 415,000 cars in total, up 29% versus third quarter last year. For the first nine months of FY22, we sold approximately 1.3 million retail and wholesale cars combined, set new records in each month. We continue to be the largest buyer of vehicles from consumers. We bought approximately 383,000 cars from consumers in the third quarter, which is up 91% versus last year. And again, we achieved self-sufficiency above 70%. Our customer-centric omnichannel strategy, solid execution, and macro factors are driving performance across our company. In our retail business, total unit sales in the third quarter were up 16.9% and used unit comps were up 15.8% versus the third quarter last year. We experienced robust demand as we ramped staffing levels and built inventory. Cath and our credit partners also supported our sales by continuing to deliver strong credit offers even as our average sales price grew by over 30% year-over-year. We achieved sequential growth in saleable inventory each month within the quarter. While inventory and staffing remain below our targets, we are pleased with our momentum and are confident that we have access to the resources we need to build inventory ahead of tax season, though retail demand will determine the pace. In addition to strong unit sales, we reported record retail gross profit per used unit of $2,235, up $84 per unit versus the third quarter last year. With used car prices at all-time highs, we chose to pass along the majority of our self-sufficiency-driven acquisition cost savings to consumers via lower prices. We believe we struck the right balance between increasing our margins and supporting our customers in a time of elevated industry prices. Wholesale units were up 48.5% from the third quarter last year, and gross profit per unit achieved an all-time record of $1,131 compared with $906 a year ago. The strength in wholesale units was primarily driven by the ongoing success of our instant online appraisal offering. We also benefited from still elevated valuations of used autos in the broader market. CarMax Auto Finance, or CAF, delivered income of $166 million, down from $176 million during the same period last year. CAF margins remained strong. Year-over-year financial results were impacted by a $68 million headwind in reserve adjustments. As a reminder, last year's quarter benefited from a reduced provision coming out of the pandemic, and this year's quarter reflects a more normalized provision. CAF and our partner lenders delivered strong offers in all credit tiers. In a few moments, John will provide more detail on customer financing and cap contributions, as well as on the impact of the auto loan receivable systems conversion. Right now, I'd like to turn it over to Enrique, who will provide more information on our third quarter financial performance. Enrique?