Company: KMX
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001170010-25-000024
Chunk: 69

Company: CARMAX INC
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7
Chunk 69
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 to third-party Tier 3 finance providers.  Accordingly, changes in the relative mix of the components of other gross profit can affect the composition and amount of other gross profit.

Fiscal 2025 Versus Fiscal 2024.  Other gross profit increased 27.9% in fiscal 2025, primarily driven by a $70.7 million improvement in service department margins as well as an increase in EPP revenues, as discussed above.  The increase in service department profits was driven by cost coverage measures that we have implemented, increased efficiencies and the increase in used unit sales.  In fiscal 2026, we plan to test EPP product enhancements that will focus on increasing penetration and margin per unit.  We expect this will result in a slight year-over-year increase in EPP margin per unit during fiscal 2026, with the potential for more expansion in fiscal 2027.  In addition, we expect service margin to grow year-over-year in fiscal 2026, 

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predominantly in the first half of the year, and to deliver a slightly positive profit contribution for the full year, as governed by sales performance given the leverage/deleverage nature of service.  We expect service will continue to serve as a slight profit lever beyond fiscal 2026.

COMPONENTS OF SG&A EXPENSES AS A PERCENTAGE OF TOTAL SG&A EXPENSES

Fiscal Year 2025Fiscal Year 2024

COMPONENTS OF SG&A EXPENSES COMPARED WITH PRIOR PERIODS (1) Years Ended February 28 or 29(In millions except per unit data)2025Change2024Change2023Compensation and benefits:Compensation and benefits, excluding share-based compensation expense$1,289.7 5.1 %$1,226.8 (4.3)%$1,282.4 Share-based compensation expense126.9 11.3 %114.1 36.4 %83.6 Total compensation and benefits (2)$1,416.6 5.6 %$1,340.9 (1.8)%$1,366.0 Store occupancy costs285.3 5.1 %271.4 1.5 %267.3 Advertising expense260.7 (1.4)%264.4 (8.4)%288.5 Other overhead costs (3)472.8