CarMax Inc (KMX)
Profitability ratios
Return on sales
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 11.00% | 10.22% | 9.43% | 10.31% | 12.55% |
| Operating profit margin | 1.75% | 3.55% | 3.60% | 5.69% | 5.55% |
| Pretax margin | 2.54% | 2.42% | 2.15% | 4.68% | 5.09% |
| Net profit margin | 1.90% | 1.81% | 1.63% | 3.61% | 3.94% |
CarMax Inc's profitability ratios have shown a declining trend over the past five years.
- Gross profit margin decreased from 12.55% in February 2021 to 11.00% in February 2025, indicating a decrease in the percentage of revenue retained after accounting for the cost of goods sold.
- Operating profit margin also declined, from 5.55% in February 2021 to 1.75% in February 2025, reflecting a decrease in the percentage of revenue left after deducting operating expenses.
- Pretax margin decreased from 5.09% in February 2021 to 2.54% in February 2025, showing a declining trend in profitability before accounting for taxes.
- Net profit margin dropped from 3.94% in February 2021 to 1.90% in February 2025, indicating a decrease in the percentage of revenue that translates to net income after all expenses.
Overall, CarMax Inc's profitability has weakened over the years, with decreasing margins in gross, operating, pretax, and net profit. This trend suggests challenges in managing costs and generating profits, which may require strategic adjustments to improve the company's profitability.
Return on investment
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 52.40% | 3.46% | 4.08% | 6.89% | 4.88% |
| Return on assets (ROA) | 56.72% | 1.76% | 1.85% | 4.37% | 3.47% |
| Return on total capital | 87.21% | 12.62% | 13.49% | 29.64% | 23.90% |
| Return on equity (ROE) | 56.16% | 7.89% | 8.64% | 21.99% | 17.11% |
CarMax Inc's profitability ratios indicate fluctuations in its performance over the years. The Operating Return on Assets (Operating ROA) improved from 4.88% in February 28, 2021, to 6.89% in February 28, 2022, but then declined to 4.08% in February 28, 2023, and further to 3.46% in February 29, 2024, before experiencing a significant surge to 52.40% in February 28, 2025.
Similarly, the Return on Assets (ROA) showed a slight increase from 3.47% in February 28, 2021, to 4.37% in February 28, 2022, but decreased to 1.85% in February 28, 2023, and further to 1.76% in February 29, 2024, before significantly rising to 56.72% in February 28, 2025.
The Return on Total Capital demonstrated an upward trend from 23.90% in February 28, 2021, to 29.64% in February 28, 2022, but then decreased to 13.49% in February 28, 2023, and further to 12.62% in February 29, 2024, before experiencing a substantial increase to 87.21% in February 28, 2025.
Lastly, the Return on Equity (ROE) started at 17.11% in February 28, 2021, and consistently increased to 21.99% in February 28, 2022. However, it then dropped to 8.64% in February 28, 2023, and further to 7.89% in February 29, 2024, before rising significantly to 56.16% in February 28, 2025.
Overall, the fluctuating profitability ratios of CarMax Inc suggest varying levels of operational efficiency and financial performance over the analyzed periods.