Mission Statement, Vision, & Core Values (2024) of CarMax, Inc. (KMX).

An Overview of CarMax, Inc. (KMX)

General Summary of CarMax, Inc. (KMX)

CarMax, Inc., founded in 1993 and headquartered in Richmond, Virginia, is a leading retailer of used cars in the United States. The company operates 247 used car stores across the nation as of August 31, 2024. CarMax offers a wide range of vehicles, including sedans, SUVs, and trucks, with a focus on providing a no-haggle pricing experience. The company is also known for its customer-friendly policies, such as a 7-day return policy and a 90-day limited warranty on vehicles sold.

As of 2024, CarMax reported total sales of $14.13 billion for the first six months of fiscal 2025, reflecting a diverse revenue stream from used vehicle sales, wholesale vehicle sales, and other services. The breakdown of sales includes:

Company's Financial Performance in the Latest Financial Reports

In the second quarter of fiscal 2025, CarMax achieved a gross profit of $760.5 million, an increase of 9.1% compared to the previous year. For the first six months, gross profit reached $1.55 billion, reflecting a 2.5% increase year-over-year. Notably, used vehicle gross profit per unit was $2,269, while wholesale gross profit per unit was $975.

The financial highlights for the second quarter of fiscal 2025 include:

• Net earnings of $132.8 million, representing a 11.9% increase from the previous year.
• Net earnings per diluted share of $0.85, up 13.3% year-over-year.
• Used vehicle revenues increased by 1.5%, driven by a 5.1% increase in used unit sales.
• Wholesale vehicle revenues decreased by 12.7%, primarily due to a 12.9% decline in average selling price.

CarMax Auto Finance (CAF) generated income of $115.6 million in the second quarter, slightly down from $135.0 million the previous year. The total managed receivables for CAF stood at $17.77 billion, with an allowance for loan losses of $500.8 million, equating to 2.82% of ending managed receivables.

Introduction to Company as a Leader in the Industry

CarMax is recognized as a leader in the used car retail industry due to its innovative business model and customer-centric approach. The company's commitment to transparency and customer satisfaction has helped it maintain a strong market position. As of 2024, CarMax continues to expand its presence, with plans to open new stores in existing markets and enhance its online sales capabilities.

With a focus on leveraging technology to improve the customer experience, CarMax has seen a rise in online retail sales, accounting for 15% of used unit sales in the first six months of fiscal 2025. The company remains well-positioned for future growth, supported by its robust operational framework and strong financial performance.

Mission Statement of CarMax, Inc. (KMX)

Mission Statement Overview

The mission statement of CarMax, Inc. (KMX) is centered around providing customers with an exceptional car-buying experience through transparency, integrity, and high-quality products. This mission is crucial in guiding the company’s strategic direction and long-term goals, ensuring that all operations align with its core principles.

Core Component 1: Customer Commitment

CarMax emphasizes its commitment to customer satisfaction, which is reflected in its operational practices. In fiscal 2025, used vehicle sales reached $5.68 billion, representing an increase from $5.59 billion in the same quarter of the previous year. This growth is attributed to a 5.1% increase in used unit sales, driven by enhanced customer service and a streamlined buying process.

Core Component 2: Integrity and Transparency

Integrity and transparency are foundational to CarMax’s business model. The company maintains a no-haggle pricing policy, which simplifies the purchase process for customers. In the second quarter of fiscal 2025, CarMax reported total net sales and operating revenues of $7.01 billion, slightly down from $7.07 billion a year prior. This approach fosters trust and loyalty among customers, contributing to a 15% share of online retail sales.

Core Component 3: Quality of Products and Services

CarMax is dedicated to delivering high-quality vehicles and services. The average selling price of used vehicles decreased to $26,245 in the second quarter of fiscal 2025, down from $27,500 in the same quarter of the previous year, reflecting a strategic focus on affordability without compromising quality. Additionally, the gross profit for used vehicles per unit sold increased to $2,269, indicating effective cost management and value delivery to customers.

By focusing on these core components, CarMax continues to enhance its mission statement, ensuring that it meets the evolving needs of its customers while maintaining strong financial performance in a competitive market.

Vision Statement of CarMax, Inc. (KMX)

Vision Statement Overview

The vision statement of CarMax, Inc. emphasizes the company's commitment to transforming the way customers buy and sell used vehicles. It reflects a forward-thinking approach, focusing on customer convenience, transparency, and innovation in the automotive retail sector.

Customer-Centric Approach

CarMax's vision prioritizes a customer-centric model. As of 2024, CarMax reported that online retail sales accounted for 15% of used unit sales during the first six months of fiscal 2025, demonstrating the company's commitment to enhancing the customer experience through digital platforms.

Innovation and Technology Integration

CarMax is focused on integrating technology to improve operational efficiency and customer engagement. The company's use of proprietary pricing algorithms allows for real-time adjustments to vehicle pricing based on market trends, enhancing profitability while maintaining competitive pricing.

Commitment to Transparency

Transparency in pricing and vehicle history is a core component of CarMax's vision. The company's policy of offering no-haggle pricing and comprehensive vehicle history reports fosters trust and simplifies the purchasing process for customers. In fiscal 2025, CarMax aims to maintain this standard while adapting to changing market conditions.

Expansion and Growth Strategy

CarMax's vision includes strategic expansion in both physical and digital realms. The company opened two new stores and a stand-alone reconditioning center in the first half of fiscal 2025, with plans for three additional store openings by year-end. This growth strategy is supported by a capital expenditure forecast of $500 million to $550 million for the fiscal year.

Financial Performance and Future Outlook

As of August 31, 2024, CarMax reported total revenues of $14.13 billion for the first six months of fiscal 2025, a decrease from $14.76 billion in the same period the previous year. This reflects a strategic focus on enhancing profitability through improved operational efficiencies rather than solely on revenue growth.

Social Responsibility and Community Engagement

CarMax's vision also encompasses social responsibility initiatives. The company actively engages in community support and environmental sustainability efforts, reflecting its commitment to positively impact the communities in which it operates.

Core Values of CarMax, Inc. (KMX)

Integrity

Integrity is a fundamental core value at CarMax, Inc. It emphasizes honesty, transparency, and accountability in all interactions with customers, employees, and stakeholders.

In its operations, CarMax has demonstrated integrity through its commitment to providing a no-haggle pricing policy, which ensures that customers receive fair prices without the stress of negotiation. This approach has contributed to CarMax's reputation for trustworthiness in the used car market.

For example, in fiscal 2025, CarMax reported used vehicle sales of $5.68 billion, reflecting a 1.5% increase compared to the previous year, largely attributed to customer trust built through its integrity-focused practices.

Customer First

The core value of "Customer First" drives CarMax to prioritize customer satisfaction and enhance the buying experience. This value is critical in an industry where customer loyalty is paramount.

CarMax has reinforced this commitment through initiatives like the 7-Day Money-Back Guarantee and a 90-Day Limited Warranty, allowing customers to shop with confidence. In the second quarter of fiscal 2025, CarMax achieved a customer satisfaction score of 92%, up from 90% in the prior year.

Moreover, online retail sales accounted for 15% of used unit sales during the same period, showcasing the company's adaptability to customer preferences for digital transactions.

Respect

Respect is integral to CarMax's culture, fostering an inclusive environment for employees and customers alike. This value underpins the company's efforts to create a diverse workplace and promote equity among its workforce.

As of August 31, 2024, CarMax employed over 28,000 associates, with a focus on diversity in hiring practices. The company reported that 49% of its workforce identified as people of color, reflecting its dedication to respect and inclusion.

Additionally, CarMax's community outreach programs, which included over $1.2 million in donations to local charities in fiscal 2025, further exemplify its commitment to respect both within and outside the organization.

Excellence

Excellence is a core value that drives CarMax to continuously improve its operations, products, and services. This commitment to excellence is evident in the company's operational metrics and customer service standards.

In fiscal 2025, CarMax's gross profit increased by 9.1%, reaching $760.5 million in the second quarter, demonstrating its effective management and operational efficiency. The average used vehicle gross profit per unit sold was $2,269, reflecting a strategic focus on quality and customer satisfaction.

The company has also invested significantly in technology to enhance the customer experience, with capital expenditures totaling approximately $213.1 million in fiscal 2025 aimed at improving store facilities and digital platforms.

Teamwork

Teamwork is a core value that emphasizes collaboration among employees to achieve common goals. CarMax believes that a strong team leads to better service and operational success.

In 2024, CarMax implemented team-building initiatives that resulted in a 15% increase in employee engagement scores. The company also reported that 85% of employees felt their contributions were valued, which is crucial for fostering a collaborative environment.

Furthermore, CarMax's performance metrics indicate that stores with higher teamwork scores also saw a 10% increase in customer satisfaction ratings.