Company: KMX
Filing Date: 2025-04-11
Form Type: 10-K
Source: 0001170010-25-000024
Chunk: 63

Company: CARMAX INC
Filing Date: 2025-04-11
Form: 10-K
Item: Item 7
Chunk 63
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 of the impacts of recent economic trends on customer behavior.  The change in the allowance for loan losses is recognized through an adjustment to the provision for loan losses.

Determining the appropriateness of the allowance for loan losses requires management to exercise judgment about matters that are inherently uncertain, including the timing and distribution of net losses that could materially affect the allowance for loan losses and, therefore, net earnings.  To the extent that actual performance differs from our estimates, additional provision for credit losses may be required that would reduce net earnings.  To demonstrate the sensitivity of credit loss assumptions and macroeconomic scenarios used in our estimated allowance for loan losses, we compared our February 28, 2025, modeled allowance base case scenario to a downside scenario.  Relative to the base case, the downside scenario assumed 10% worsening in loss performance, U.S. unemployment rates and the NADA used vehicle price index.  This sensitivity analysis resulted in a hypothetical increase in the allowance for loan losses of approximately $42.7 million.

While this analysis may be useful in considering how changes in certain macroeconomic assumptions could impact our estimated credit losses, it should not be relied upon as a forecast of how our allowance for loan losses is expected to change in a different macroeconomic scenario.  The analysis does not reflect changes in other adjustments to the quantitative calculation, which would be influenced by the qualitative judgment management applies to reflect the uncertainty and imprecision of estimated lifetime credit losses based on then-current circumstances and conditions.

See Notes 1(H) and 4 for additional information on the allowance for loan losses.

RESULTS OF OPERATIONS – CARMAX SALES OPERATIONS

NET SALES AND OPERATING REVENUES

 Years Ended February 28 or 29(In millions)2025Change2024Change2023Used vehicle sales$21,079.7 0.8 %$20,922.3 (9.2)%$23,034.3 Wholesale vehicle sales4,587.5 (7.8)%4,975.8 (16.9)%5,989.8 Other sales and revenues:Extended protection plan revenues451.7 12.4 %401.8 (4.9)%422.3 Third-party finance (fees)/income, net(1.5)74.4 %(5.8)(183.6)%7.0 Advertising & subscription revenues (1)139.3 2.6 %135.8 1.9