CarMax Inc

Ladies and gentlemen, thank you for standing by. Welcome to the FY24 Q1 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Lowenstein, ADP Investor Relations. Please go ahead.

Thank you, Chelsea. Good morning. Thank you, everyone, for joining our fiscal 2024 first quarter earnings conference call. I'm here today with Bill Nash, our president and CEO, Enrique Mayor Moore, our executive vice president and CFO, and John Daniels, our senior vice president, CarMax Auto Finance Operations. Let me remind you, our statements today that are not statements of historical fact including statements regarding the company's future business plans, prospects, and financial performance are forward-looking statements that we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our current knowledge, expectations, and assumptions and are subject to substantial risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, we disclaim any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see our Form 8-K filed with the SEC this morning in our annual report on Form 10-K for the fiscal year ended February 28, 2023, previously 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 queue for more follow-ups.

Bill? Great. Thank you, David. Good morning, everyone, and thanks for joining us. Although the first quarter remained challenging due to the same factors we cited in fiscal 23, We're seeing sequential quarterly improvements across our business. We are focused on controlling what we can as we take deliberate steps to support our business for both the near term and the long run. This quarter, we reduced SG&A independent of the legal settlement. We delivered strong retail GPU. We increased used saleable inventory units while driving down total inventory dollars 13% year over year. We drove strong wholesale GPU as our unit volume continued to recover And finally, we grew CAF's penetration, even as we raised CAF's consumer rates to help offset higher cost of funds and tighten lending standards in reaction to the current environment. For the first quarter of FY24, our diversified business model delivered total sales of $7.7 billion, down 17% compared to last year, driven by lower retail and wholesale volume and prices. In our retail business, total unit sales declined 9.6% and used unit comps were down 11.4%, which reflects an improvement from down 22.4% and 14.1% year-over-year during last year's third and fourth quarters. Average selling price declined approximately $1,600 per unit or 5% year-over-year. First quarter retail gross profit per used unit was $2,361, consistent with the $2,339 last year. Historically, margin tends to run higher during the first quarter compared to the rest of the year. In the current environment, we expect this year's second quarter and full year margins will be similar to last year, slightly ahead of the full year $2,100 to $2,200 range that we spoke to last quarter. As always, we'll continue to test price elasticity and monitor the competitive landscape. Wholesale unit sales were down 13.6% versus the first quarter last year, which reflects continued improvement from the 36.7% and the 19.3% year-over-year declines during last year's third and fourth quarter. Average selling price declined approximately $2,000 per unit or 18% year-over-year. Wholesale gross profit per unit was $1,042, in line with $1,029 during last year's first quarter. We bought approximately 343,000 vehicles from consumers and dealers during the quarter, down 5% from last year, and an improvement from the 40% and 22% year-over-year declines during last year's third and fourth quarters. Of these vehicles, we purchased approximately 323,000 from consumers in the quarter, with a little more than half of those buys coming through our online instant appraisal experience. As a result, our self-sufficiency remained above 70% during the quarter. We sourced the remaining approximately 20,000 vehicles through dealers, up 20%, from last year supported by our Edmond sales team. In regard to our first quarter online metrics, approximately 14% of retail unit sales were online, up from 11% last year. Approximately 54% of retail unit sales were omni sales this quarter, which is consistent with the prior year. Nearly all of our first quarter wholesale auctions and sales, which represents 20% of total revenue, remain virtual and are considered online transactions. Total revenue resulting from online transactions was approximately 31%, which is in line with last year. CarMax Auto Finance, or CAF, delivered income of $137 million, down from $204 million during the same period last year. John will provide more detail on customer financing, the loan loss provision, and CAF contributions in a few moments. At this point, I'd like to turn the call over to Enrique, who will provide more information on our first quarter financial performance. Enrique?