Carmax FY 4Q13 Earnings Call Notes

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This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

$KMX Carmax Earnings Call Notes

“we increased our share of the 0- to 6-year old used vehicle market by approximately 3% in the markets that we serve to a total of nearly 6%.”

[analyst comment] “It seems appetite for subprime loans has improved quite a bit recently.”

“If you look at the APR or the contract rates that we’ve given, the origination metrics, you see that it’s trended down to 7.1% this quarter. It was 7.7% last quarter, and I think it was 8.7% last year.”

“The bottom line is, Sharon, it’s a great time to buy a car. Rates are cheap, and we have lots of inventory.”

” there’s been a lot of movement in leasing as a percentage of total sales. And I think you’ve seen some numbers recently up over 30%, I know Honda and Toyota are both over 30%, of vehicles sold were leased. We won’t see the impact of that for 2 or 3 years when they come back off of lease. And I can’t really predict what’s going to happen in the short term, but what has historically happened as leases as a percent of sales have moved quite a bit over time. And we’ve seen it over our 20 years in the business. Sometimes that’s 30% of sales, sometimes it’s 15% of sales. It just means there’s a different avenue for us to go and get those cars. So if it’s — if there’s more — if a higher percentage of cars are leased, they’re a little bit more organized when they come back to the auction, because usually it’s the lease provider that will run the cars. And if they’re not off lease, then customers are still going to trade in and out of cars. They’ll just be a little bit more fragmented in terms of the way that supply comes back to market.”