CarMax Inc (KMX)

Gross profit margin

		Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020
Gross profit (ttm)	US$ in thousands	2,831,832	2,684,761	2,619,978	2,556,276	2,647,840	2,737,997	2,701,822	2,742,202	2,800,203	2,900,213	3,160,085	3,238,424	3,287,542	3,217,922	3,012,792	2,949,451	2,379,125	2,410,613	2,392,830	2,334,140
Revenue (ttm)	US$ in thousands	26,353,420	25,976,900	25,902,070	25,962,380	26,536,040	26,631,930	26,989,350	28,060,310	29,684,870	31,649,080	33,670,880	33,514,440	31,900,420	29,377,980	26,035,160	23,418,970	18,950,150	18,748,380	18,353,470	18,182,450
Gross profit margin		10.75%	10.34%	10.11%	9.85%	9.98%	10.28%	10.01%	9.77%	9.43%	9.16%	9.39%	9.66%	10.31%	10.95%	11.57%	12.59%	12.55%	12.86%	13.04%	12.84%

February 28, 2025 calculation

Gross profit margin = Gross profit (ttm) ÷ Revenue (ttm)
= $2,831,832K ÷ $26,353,420K
= 10.75%

The gross profit margin of CarMax Inc has exhibited fluctuations over the period analyzed. It started at 12.84% in May 2020, increasing slightly to 13.04% by August 2020. However, the margin began to decline gradually thereafter, reaching 9.66% by May 2022. This downward trend continued until August 2023 when it hit a low point of 9.39%. From there, the margin started to show signs of improvement, climbing to 10.75% by February 2025.

The sustained decrease in the gross profit margin from May 2020 to August 2023 may indicate challenges in managing the cost of goods sold or pricing strategies. The subsequent recovery in the margin from August 2023 to February 2025 suggests potential efforts to enhance operational efficiency or pricing adjustments by the company.

Overall, a gross profit margin of 10.75% in February 2025 indicates that CarMax Inc was able to generate a profit of 10.75 cents on every dollar of sales after deducting the cost of goods sold. Monitoring this key financial metric is crucial for assessing the company's ability to maintain profitability and manage its operational costs effectively.