CarMax 2014 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 2014 CarMax annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

28
USED VEHICLE SALES CHANGES
Years Ended February 28 or 29
2014 2013 2012
Used vehicle units 18 % 10 % 3 %
Used vehicle dollars 18 % 12 % 9 %
Comparable store used unit sales growth is one of the key drivers of our profitability. A store is included in
comparable store retail sales in the store’s fourteenth full month of operation.
COMPARABLE STORE USED VEHICLE SALES CHANGES
Years Ended February 28 or 29
2014 2013 2012
Used vehicle units 12 % 5 % 1 %
Used vehicle dollars 12 % 7 % 7 %
WHOLESALE VEHICLE SALES CHANGES
Years Ended February 28 or 29
2014 2013 2012
Wholesale vehicle units 5 % 3 % 20 %
Wholesale vehicle dollars 4% 2 % 32 %
CHANGE IN USED CAR SUPERSTORE BASE
Years Ended February 28 or 29
2014 2013 2012
Used car superstores, beginning of period 118 108 103
Superstore openings
13 10 5
Used car superstores, end of period 131 118 108
Used Vehicle Sales
Fiscal 2014 Versus Fiscal 2013. The 18% increase in used vehicle revenues in fiscal 2014 resulted from a corresponding
increase in used unit sales. The increase in unit sales included a 12% increase in comparable store used unit sales and
sales from newer stores not yet included in the comparable store base. The comparable store used unit growth was
primarily driven by improved conversion, as well as a modest increase in store traffic. We believe the strong conversion
reflected continued improvements in execution in our stores and the attractive credit environment experienced during
fiscal 2014.
Our data indicates that in our markets, we increased our share of the 0- to 10-year old used vehicle market by
approximately 16% in fiscal 2014. We believe our ability to grow market share year after year is a reflection of the
strength of our consumer offer, the skill of our associates and the preference for our brand.
Fiscal 2013 Versus Fiscal 2012. The 12% increase in used vehicle revenues in fiscal 2013 resulted from a 10% increase
in used unit sales and a 2% increase in average retail selling price. The increase in used unit sales included a 5% increase
in comparable store used unit sales and sales from newer stores not yet included in the comparable store base. The
comparable store unit growth was driven by improved conversion, which we believe benefited from a variety of factors,
including more compelling credit offers from third-party finance providers and CAF, increased inventory selection and
continued strong in-store execution.
The increase in average retail selling price primarily reflected changes in our sales mix by vehicle age, with an increased
mix of ages 0-2 vehicles and a reduced mix of ages 3-4 vehicles, which corresponds to the model years in shortest supply.
The overall supply of late-model used vehicles being remarketed has been constrained following four years of new car
industry sales at rates significantly below pre-recession levels. During much of the period from 2009 through 2011,
wholesale vehicle industry values rose, which increased our vehicle acquisition costs and average selling prices compared
with pre-recession periods. We believe the constrained supply of late-model used vehicles and the resulting increase in