CarMax Inc

Ladies and gentlemen, thank you for standing by. Welcome to the second quarter fiscal year 2024 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, AVP Investor Relations. Please go ahead.

Thank you, Chelsea. Good morning, everyone. Thank you for joining our fiscal 2024 second 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 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 facts that could affect these expectations, please see our Form 8-K filed with the SEC this morning and 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 the queue for more follow-ups. Bill?

Great. Thank you, David. Good morning, everyone, and thanks for joining us. Although our second quarter results largely reflect the same widespread pressures that we cited over the past year, we continue to see sequential quarterly improvement across our business. We believe the deliberate steps we are taking to control what we can are supporting our business now while also positioning us well for the future. This quarter, we delivered strong retail GPU. We further reduced SG&A year-over-year. We maintained use-sellable inventory units at a similar level to the first quarter, while total inventory dollars decreased by 18% year-over-year, split approximately evenly between lower units and reduced acquisition costs. We drove strong wholesale GPU despite experiencing steep depreciation, and we stabilized CAF's net interest margin while we maintained penetration. For the second quarter of FY24, our diversified business model delivered total sales of $7.1 billion, down 13% compared to last year, driven by lower retail and wholesale volume and prices. In our retail business, while total unit sales declined 7.4% and used unit comps were down 9%, we continued to achieve sequential quarterly improvement. Further, comp sales improved sequentially by month across the second quarter. Average selling price declined approximately $1,200 per unit or 4% year over year. Retail gross profit per used unit was $2,251, similar to last year's second quarter record high of $2,282. We continue to expect this year's full year per unit margin will be similar to last year. As always, we will continue to test price elasticity and monitor the competitive landscape. Wholesale unit sales were down 11.2% versus the second quarter last year. Like used unit sales, this reflects continued sequential improvement year over year from the second half of last year and this year's first quarter. Average selling price declined approximately $1,300 per unit, or 12% year over year. Wholesale gross profit per unit was $963, up from $881 a year ago. We achieved this despite experiencing steep depreciation that was concentrated primarily in June and July. We bought approximately 292,000 vehicles from consumers and dealers during the quarter, down 15% from last year as we adjusted offers to reflect the steep depreciation that we're seeing in the marketplace. Of these vehicles, we purchased approximately 273,000 from consumers in the quarter. with a little more than half of those buyouts coming through our online instant appraisal experience. As a result, our self-sufficiency remained above 70% during the quarter. Supported by our Edmund sales team, we sourced the remaining approximately 19,000 vehicles through dealers, down 5% from last year. In regard to our second quarter online metrics, approximately 14% of retail unit sales were online, up from 11% last year. Approximately 55% of retail unit sales were omni sales this quarter, up from 53% in the prior year. Nearly all of our second quarter wholesale auctions in sales, which represents 19% of total revenue, remain virtual and are considered online transactions. Total revenue resulting from online transactions was approximately 31%, up slightly from 30% last year. Carmack Auto Finance, or CAF, delivered income of $135 million, down from $183 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 minutes. At this point, I'd like to turn the call over to Enrique, who will provide more information on our second quarter financial performance. Enrique?