10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended August 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:  1-31420

CARMAX, INC.

(Exact name of registrant as specified in its charter)

Virginia		54-1821055
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)
12800 Tuckahoe Creek Parkway		23238
Richmond,	Virginia
(Address of Principal Executive Offices)		(Zip Code)

(804) 747-0422

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	KMX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒    No  ☐ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐     No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding as of September 25, 2024
Common Stock, par value $0.50	154,924,341

Page 1

CARMAX, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

			Page No.
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements:
		Consolidated Statements of Earnings (Unaudited) –
		Three and Six Months Ended August 31, 2024 and 2023	3
		Consolidated Statements of Comprehensive Income (Unaudited) –
		Three and Six Months Ended August 31, 2024 and 2023	4
		Consolidated Balance Sheets (Unaudited) –
		August 31, 2024 and February 29, 2024	5
		Consolidated Statements of Cash Flows (Unaudited) –
		Six Months Ended August 31, 2024 and 2023	6
		Consolidated Statements of Shareholders’ Equity (Unaudited) –
		Three and Six Months Ended August 31, 2024 and 2023	7
		Notes to Consolidated Financial Statements (Unaudited)	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and
		Results of Operations	27
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
	Item 4.	Controls and Procedures	43
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	44
	Item 1A.	Risk Factors	44
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
	Item 6.	Exhibits	45
SIGNATURES			46

Page 2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings

(Unaudited)

	Three Months Ended August 31						Six Months Ended August 31
(In thousands except per share data)	2024		%(1)	2023		%(1)	2024		%(1)	2023		%(1)
SALES AND OPERATING REVENUES:
Used vehicle sales	$	5,677,081	80.9	$	5,591,143	79.0	$	11,354,557	80.4	$	11,592,614	78.5
Wholesale vehicle sales	1,154,465		16.5	1,321,975		18.7	2,410,904		17.1	2,836,338		19.2
Other sales and revenues	181,983		2.6	160,718		2.3	361,465		2.6	331,947		2.2
NET SALES AND OPERATING REVENUES	7,013,529		100.0	7,073,836		100.0	14,126,926		100.0	14,760,899		100.0
COST OF SALES:
Used vehicle cost of sales	5,198,315		74.1	5,139,034		72.6	10,380,294		73.5	10,625,880		72.0
Wholesale vehicle cost of sales	1,016,590		14.5	1,185,359		16.8	2,115,901		15.0	2,531,897		17.2
Other cost of sales	38,157		0.5	52,678		0.7	78,369		0.6	88,967		0.6
TOTAL COST OF SALES	6,253,062		89.2	6,377,071		90.2	12,574,564		89.0	13,246,744		89.7
GROSS PROFIT	760,467		10.8	696,765		9.8	1,552,362		11.0	1,514,155		10.3
CARMAX AUTO FINANCE INCOME	115,580		1.6	134,987		1.9	262,550		1.9	272,345		1.8
Selling, general and administrative expenses	610,562		8.7	585,694		8.3	1,249,140		8.8	1,145,531		7.8
Depreciation and amortization	63,901		0.9	58,817		0.8	125,770		0.9	117,236		0.8
Interest expense	27,021		0.4	31,585		0.4	58,383		0.4	62,051		0.4
Other income	(3,281)		—	(2,630)		—	(2,865)		—	(3,844)		—
Earnings before income taxes	177,844		2.5	158,286		2.2	384,484		2.7	465,526		3.2
Income tax provision	45,035		0.6	39,651		0.6	99,235		0.7	118,593		0.8
NET EARNINGS	$	132,809	1.9	$	118,635	1.7	$	285,249	2.0	$	346,933	2.4
WEIGHTED AVERAGE COMMON SHARES:
Basic	155,866			158,479			156,513			158,298
Diluted	156,526			159,238			157,116			158,900
NET EARNINGS PER SHARE:
Basic	$	0.85		$	0.75		$	1.82		$	2.19
Diluted	$	0.85		$	0.75		$	1.82		$	2.18

(1)    Percents are calculated as a percentage of net sales and operating revenues and may not total due to rounding.

See accompanying notes to consolidated financial statements.

Page 3

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2024		2023		2024		2023
NET EARNINGS	$	132,809	$	118,635	$	285,249	$	346,933
Other comprehensive (loss) income, net of taxes:
Net change in retirement benefit plan unrecognized actuarial losses	85		98		169		196
Net change in cash flow hedge unrecognized gains	(52,706)		17,169		(50,391)		(19,468)
Other comprehensive (loss) income, net of taxes	(52,621)		17,267		(50,222)		(19,272)
TOTAL COMPREHENSIVE INCOME	$	80,188	$	135,902	$	235,027	$	327,661

See accompanying notes to consolidated financial statements.

Page 4

CARMAX, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

	As of August 31		As of February 29
(In thousands except share data)	2024		2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	524,667	$	574,142
Restricted cash from collections on auto loans receivable	572,630		506,648
Accounts receivable, net	228,112		221,153
Inventory	3,397,746		3,678,070
Other current assets	135,901		246,581
TOTAL CURRENT ASSETS	4,859,056		5,226,594
Auto loans receivable, net of allowance for loan losses of $500,834 and $482,790 as of August 31, 2024 and February 29, 2024, respectively	17,413,589		17,011,844
Property and equipment, net of accumulated depreciation of $1,940,005 and $1,813,783 as of August 31, 2024 and February 29, 2024, respectively	3,763,089		3,665,530
Deferred income taxes	126,883		98,790
Operating lease assets	495,783		520,717
Goodwill	141,258		141,258
Other assets	496,160		532,064
TOTAL ASSETS	$	27,295,818	$	27,196,797
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	1,008,044	$	933,708
Accrued expenses and other current liabilities	483,922		523,971
Accrued income taxes	34,063		—
Current portion of operating lease liabilities	57,959		57,161
Current portion of long-term debt	21,771		313,282
Current portion of non-recourse notes payable	550,045		484,167
TOTAL CURRENT LIABILITIES	2,155,804		2,312,289
Long-term debt, excluding current portion	1,588,260		1,602,355
Non-recourse notes payable, excluding current portion	16,516,943		16,357,301
Operating lease liabilities, excluding current portion	473,158		496,210
Other liabilities	382,044		354,902
TOTAL LIABILITIES	21,116,209		21,123,057
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY:
Common stock, $0.50 par value; 350,000,000 shares authorized; 155,332,046 and 157,611,939 shares issued and outstanding as of August 31, 2024 and February 29, 2024, respectively	77,666		78,806
Capital in excess of par value	1,856,385		1,808,746
Accumulated other comprehensive income	9,057		59,279
Retained earnings	4,236,501		4,126,909
TOTAL SHAREHOLDERS’ EQUITY	6,179,609		6,073,740
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	27,295,818	$	27,196,797

See accompanying notes to consolidated financial statements.

Page 5

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended August 31
(In thousands)	2024		2023
OPERATING ACTIVITIES:
Net earnings	$	285,249	$	346,933
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	141,964		126,971
Share-based compensation expense	82,703		69,445
Provision for loan losses	193,798		170,672
Provision for cancellation reserves	49,302		45,199
Deferred income tax benefit	(11,789)		(24,845)
Other	2,039		3,868
Net (increase) decrease in:
Accounts receivable, net	(6,959)		26,909
Inventory	280,324		(113,144)
Other current assets	111,438		33,431
Auto loans receivable, net	(595,543)		(828,631)
Other assets	(9,486)		(6,668)
Net increase (decrease) in:
Accounts payable, accrued expenses and other
current liabilities and accrued income taxes	23,474		132,566
Other liabilities	(45,100)		(43,826)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	501,414		(61,120)
INVESTING ACTIVITIES:
Capital expenditures	(213,123)		(210,167)
Proceeds from disposal of property and equipment	130		1,247
Purchases of investments	(3,091)		(3,236)
Sales and returns of investments	621		405
NET CASH USED IN INVESTING ACTIVITIES	(215,463)		(211,751)
FINANCING ACTIVITIES:
Proceeds from issuances of long-term debt	—		134,600
Payments on long-term debt	(306,274)		(240,093)
Cash paid for debt issuance costs	(12,985)		(10,650)
Payments on finance lease obligations	(9,056)		(7,810)
Issuances of non-recourse notes payable	6,971,000		6,179,929
Payments on non-recourse notes payable	(6,742,743)		(5,532,403)
Repurchase and retirement of common stock	(213,305)		(4,143)
Equity issuances	30,296		27,534
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(283,067)		546,964
Increase in cash, cash equivalents, and restricted cash	2,884		274,093
Cash, cash equivalents, and restricted cash at beginning of year	1,250,410		951,004
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	1,253,294	$	1,225,097
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	$	524,667	$	521,098
Restricted cash from collections on auto loans receivable	572,630		534,792
Restricted cash included in other assets	155,997		169,207
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	1,253,294	$	1,225,097

See accompanying notes to consolidated financial statements.

Page 6

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Six Months Ended August 31, 2024
								Accumulated
	Common			Capital in				Other
	Shares	Common		Excess of		Retained		Comprehensive
(In thousands)	Outstanding	Stock		Par Value		Earnings		Income		Total
Balance as of February 29, 2024	157,612	$	78,806	$	1,808,746	$	4,126,909	$	59,279	$	6,073,740
Net earnings	—	—		—		152,440		—		152,440
Other comprehensive income	—	—		—		—		2,399		2,399
Share-based compensation expense	—	—		36,708		—		—		36,708
Repurchases of common stock	(1,446)	(723)		(17,615)		(86,551)		—		(104,889)
Exercise of common stock options	138	69		8,140		—		—		8,209
Stock incentive plans, net shares issued	49	24		(1,761)		—		—		(1,737)
Balance as of May 31, 2024	156,353	$	78,176	$	1,834,218	$	4,192,798	$	61,678	$	6,166,870
Net earnings	—	—		—		132,809		—		132,809
Other comprehensive loss	—	—		—		—		(52,621)		(52,621)
Share-based compensation expense	—	—		17,328		—		—		17,328
Repurchases of common stock	(1,376)	(688)		(17,059)		(89,106)		—		(106,853)
Exercise of common stock options	347	173		21,914		—		—		22,087
Stock incentive plans, net shares issued	8	5		(16)		—		—		(11)
Balance as of August 31, 2024	155,332	$	77,666	$	1,856,385	$	4,236,501	$	9,057	$	6,179,609

See accompanying notes to consolidated financial statements.

Page 7

CARMAX, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Six Months Ended August 31, 2023
								Accumulated
	Common			Capital in				Other
	Shares	Common		Excess of		Retained		Comprehensive
(In thousands)	Outstanding	Stock		Par Value		Earnings		Income		Total
Balance as of February 28, 2023	158,079	$	79,040	$	1,713,074	$	3,723,094	$	97,869	$	5,613,077
Net earnings	—	—		—		228,298		—		228,298
Other comprehensive loss	—	—		—		—		(36,539)		(36,539)
Share-based compensation expense	—	—		21,274		—		—		21,274
Exercise of common stock options	18	9		979		—		—		988
Stock incentive plans, net shares issued	112	56		(3,986)		—		—		(3,930)
Balance as of May 31, 2023	158,209	$	79,105	$	1,731,341	$	3,951,392	$	61,330	$	5,823,168
Net earnings	—	—		—		118,635		—		118,635
Other comprehensive income	—	—		—		—		17,267		17,267
Share-based compensation expense	—	—		20,256		—		—		20,256
Exercise of common stock options	446	223		26,323		—		—		26,546
Stock incentive plans, net shares issued	1	—		(213)		—		—		(213)
Balance as of August 31, 2023	158,656	$	79,328	$	1,777,707	$	4,070,027	$	78,597	$	6,005,659

See accompanying notes to consolidated financial statements.

Page 8

CARMAX, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

1.Background

Business. CarMax, Inc. (“we,” “our,” “us,” “CarMax” and “the company”), including its wholly owned subsidiaries, is the nation’s largest retailer of used vehicles.  We operate in two reportable segments:  CarMax Sales Operations and CarMax Auto Finance (“CAF”).  Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.  Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.

On June 1, 2021, we completed the acquisition of Edmunds Holding Company (“Edmunds”). At that time, Edmunds was identified as a non-reportable operating segment and has been presented as “Other” in the Segment Information footnote in our prior period financial statements. Since the acquisition, Edmunds’ business strategy has become increasingly integrated with that of CarMax Sales Operations. Beginning in the first quarter of fiscal 2025, the chief operating decision maker (“CODM”) assessed the financial performance related to Edmunds’ operations together with the rest of the CarMax Sales Operations segment. As a result, as of May 31, 2024, the company realigned its operating segments to be consistent with the manner in which the CODM assesses performance and makes resource allocations. The company now operates in two operating segments, CarMax Sales Operations and CAF, both of which continue to be reportable segments.

The operating segment change did not impact the company’s consolidated financial statements but did impact our previous segment footnote disclosure. The Segment Information footnote is no longer presented, as the previous disclosures were for the purpose of presenting the Edmunds operating segment separate from CarMax Sales Operations. The current and prior period required disclosures related to our reportable segments are included elsewhere within the consolidated financial statements and related footnotes. The performance of our CarMax Sales Operations segment is reviewed by our CODM at the gross profit level, the components of which are presented within the consolidated statement of earnings. The required segment information related to our CAF segment is presented in Note 3. Additionally, asset information by segment is not utilized for purposes of assessing performance or allocating resources and, as a result, such information has not been presented.

We deliver an unrivaled customer experience by offering a broad selection of quality used vehicles and related products and services at competitive, no-haggle prices using a customer-friendly sales process.  Our omni-channel platform, which gives us the largest addressable market in the used car industry, empowers our retail customers to buy a car on their terms – online, in-store or an integrated combination of both. We offer customers a range of related products and services, including the appraisal and purchase of vehicles directly from consumers and dealers; the financing of retail vehicle purchases through CAF and third-party finance providers; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); advertising and subscription services; and vehicle repair service.  Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through on-site or virtual wholesale auctions.

Basis of Presentation and Use of Estimates. The accompanying interim unaudited consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.  These interim unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, such interim consolidated financial statements reflect all normal recurring adjustments considered necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.  

The accounting policies followed in the presentation of our interim financial results are consistent with those included in the company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2024 (the “2024 Annual Report”), with the exception of those related to recent accounting pronouncements adopted in the current fiscal year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our 2024 Annual Report.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.  Certain prior year amounts have been reclassified to conform to the current year’s presentation.  Amounts and percentages may not total due to rounding.

Page 9

2. Revenue

We recognize revenue when control of the good or service has been transferred to the customer, generally either at the time of sale or upon delivery to a customer.  Our contracts have a fixed contract price and revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We collect sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale.  These taxes are accounted for on a net basis and are not included in net sales and operating revenues or cost of sales. We generally expense sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded within selling, general and administrative expenses. We do not have any significant payment terms as payment is received at or shortly after the point of sale.

Disaggregation of Revenue

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2024		2023		2024		2023
Used vehicle sales	$	5,677.1	$	5,591.1	$	11,354.6	$	11,592.6
Wholesale vehicle sales	1,154.5		1,322.0		2,410.9		2,836.3
Other sales and revenues:
Extended protection plan revenues	121.4		101.7		240.2		212.9
Third-party finance income/(fees), net	1.4		(1.5)		(0.2)		(1.2)
Advertising & subscription revenues (1)	34.3		33.5		69.0		64.9
Service revenues	21.7		21.4		44.4		43.5
Other	3.2		5.6		8.1		11.8
Total other sales and revenues	182.0		160.7		361.5		331.9
Total net sales and operating revenues	$	7,013.5	$	7,073.8	$	14,126.9	$	14,760.9

(1)    Excludes intercompany sales and operating revenues that have been eliminated in consolidation.

Used Vehicle Sales. Revenue from the sale of used vehicles is recognized upon transfer of control of the vehicle to the customer. As part of our customer service strategy, we guarantee the retail vehicles we sell with a 10-day money-back guarantee.  We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities. We also guarantee the used vehicles we sell with a 90-day/4,000-mile limited warranty. These warranties are deemed assurance-type warranties and are accounted for as warranty obligations. See Note 15 for additional information on this warranty and its related obligation.

Wholesale Vehicle Sales. Wholesale vehicles are sold at our auctions, and revenue from the sale of these vehicles is recognized upon transfer of control of the vehicle to the customer. Dealers also pay a fee to us based on the sale price of the vehicles they purchase. This fee is recognized as revenue at the time of sale. While we provide condition disclosures on each wholesale vehicle sold, the vehicles are subject to a limited right of return. We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities.

EPP Revenues. We also sell ESP and GAP products on behalf of unrelated third parties, who are primarily responsible for fulfilling the contract, to customers who purchase a retail vehicle.  The ESPs we currently offer on all used vehicles provide coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract. We recognize revenue, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations. The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base.  Our risk related to contract cancellations is limited to the revenue that we receive.  Cancellations fluctuate depending on the volume of EPP sales, customer financing default or prepayment rates, and shifts in customer behavior, including those related to changes in the coverage or term of the product.  The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities.  See Note 7 for additional information on cancellation reserves.

We are contractually entitled to receive profit-sharing revenues based on the performance of the ESPs administered by third parties. These revenues are a form of variable consideration included in EPP revenues to the extent that it is probable that it

Page 10

will not result in a significant revenue reversal. An estimate of the amount to which we expect to be entitled is determined upon satisfying the performance obligation of selling the ESP. This estimate is subject to various constraints; primarily, factors that are outside of the company’s influence or control. We have determined that these constraints generally preclude any profit-sharing revenues from being recognized before they are paid. As of August 31, 2024 and February 29, 2024, no current or long-term contract asset was recognized related to cumulative profit-sharing payments to which we expect to be entitled. The estimate of the amount to which we expect to be entitled is reassessed each reporting period and any changes are reflected in other sales and revenues on our consolidated statements of earnings and other assets on our consolidated balance sheets.

Third-Party Finance Income/(Fees). Customers applying for financing who are not approved or are conditionally approved by CAF are generally evaluated by other third-party finance providers.  These providers generally either pay us or are paid a fixed, pre-negotiated fee per contract.  We recognize these fees at the time of sale.

Advertising and Subscription Revenues. Advertising and subscription revenues consist of revenues earned by our Edmunds business. Advertising revenues are derived from advertising contracts with automotive manufacturers based on fixed fees per impression and fees for certain activities completed by customers on the manufacturers’ websites. These fees are recognized in the period the impressions are delivered or certain activities occurred. Subscription revenues are derived from packages sold to automotive dealers that include car leads, inventory listings and enhanced placement in Edmunds’ dealer locator and are recognized over the period that the services are made available to the dealers. Subscription revenues also include a digital marketing subscription service, which allows dealers to gain exposure on third party partner websites. Revenues for this service are recognized on a net basis.

Service Revenues. Service revenue consists of labor and parts income related to vehicle repair service, including repairs of vehicles covered under an ESP we sell or warranty program. Service revenue is recognized at the time the work is completed.

Other Revenues. Other revenues include miscellaneous goods and services, which are immaterial to our consolidated financial statements.

3. CarMax Auto Finance

CAF provides financing to qualified retail customers purchasing vehicles from CarMax.  CAF provides us the opportunity to capture additional profits, cash flows and sales while managing our reliance on third-party finance sources.  Management regularly analyzes CAF’s operating results by assessing profitability, the performance of the auto loans receivable, including trends in credit losses and delinquencies, and CAF direct expenses.  This information is used to assess CAF’s performance and make operating decisions, including resource allocation.

We typically use securitizations or other funding arrangements to fund loans originated by CAF.  CAF income primarily reflects the interest and fee income generated by the auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct CAF expenses.

CAF income does not include any allocation of indirect costs.  Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions.  Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses.  In addition, except for auto loans receivable, which are disclosed in Note 4, CAF assets are not separately reported nor do we allocate assets to CAF because such allocation would not be useful to management in making operating decisions.

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Components of CAF Income

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2024		% (1)	2023		% (1)	2024		% (1)	2023		% (1)
Interest margin:
Interest and fee income	$	464.5	10.5	$	416.9	9.6	$	917.0	10.4	$	817.4	9.5
Interest expense	(193.7)		(4.4)	(152.0)		(3.5)	(376.0)		(4.3)	(294.6)		(3.4)
Total interest margin	270.8		6.1	264.9		6.1	541.0		6.1	522.8		6.1
Provision for loan losses	(112.6)		(2.5)	(89.8)		(2.1)	(193.8)		(2.2)	(170.7)		(2.0)
Total interest margin after provision for loan losses	158.2		3.6	175.1		4.0	347.2		3.9	352.1		4.1
Direct expenses:
Payroll and fringe benefit expense	(19.0)		(0.4)	(16.8)		(0.4)	(37.6)		(0.4)	(33.4)		(0.4)
Depreciation and amortization	(4.3)		(0.1)	(4.1)		(0.1)	(8.5)		(0.1)	(8.2)		(0.1)
Other direct expenses	(19.3)		(0.4)	(19.3)		(0.4)	(38.5)		(0.4)	(38.2)		(0.4)
Total direct expenses	(42.6)		(1.0)	(40.2)		(0.9)	(84.6)		(1.0)	(79.8)		(0.9)
CarMax Auto Finance income	$	115.6	2.6	$	135.0	3.1	$	262.6	3.0	$	272.3	3.2
Total average managed receivables	$	17,728.8		$	17,315.6		$	17,640.0		$	17,159.5

(1)    Annualized percentage of total average managed receivables.     

4. Auto Loans Receivable

Auto loans receivable include amounts due from customers related to retail vehicle sales financed through CAF and are presented net of an allowance for estimated loan losses.  These auto loans represent a large group of smaller-balance homogeneous loans, which we consider to be part of one class of financing receivable and one portfolio segment for purposes of determining our allowance for loan losses. We generally use warehouse facilities to fund auto loans receivable originated by CAF until we elect to fund them through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement.  We recognize transfers of auto loans receivable into the warehouse facilities and asset-backed term funding transactions (together, “non-recourse funding vehicles”) as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. The majority of the auto loans receivable serve as collateral for the related non-recourse notes payable of $17.10 billion as of August 31, 2024, and $16.87 billion as of February 29, 2024. See Note 9 for additional information on securitizations and non-recourse notes payable.

Interest income and expenses related to auto loans are included in CAF income.  Interest income on auto loans receivable is recognized when earned based on contractual loan terms.  All loans continue to accrue interest until repayment or charge-off.  When a charge-off occurs, accrued interest is written off by reversing interest income. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred.  See Note 3 for additional information on CAF income.

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Auto Loans Receivable, Net

	As of August 31		As of February 29
(In millions)	2024		2024
Asset-backed term funding	$	12,801.5	$	12,638.2
Warehouse facilities	3,743.6		3,744.6
Overcollateralization (1)	775.9		790.9
Other managed receivables (2)	448.4		218.1
Total ending managed receivables	17,769.4		17,391.8
Accrued interest and fees	103.6		90.9
Other	41.4		11.9
Less: allowance for loan losses	(500.8)		(482.8)
Auto loans receivable, net	$	17,413.6	$	17,011.8

(1)    Represents receivables restricted as excess collateral for the non-recourse funding vehicles.

(2)    Other managed receivables includes receivables not funded through the non-recourse funding vehicles.

Credit Quality.  When customers apply for financing, CAF’s proprietary scoring models utilize the customers’ credit history and certain application information to evaluate and rank their risk.  We obtain credit histories and other credit data that includes information such as number, age, type of and payment history for prior or existing credit accounts.  The application information that is used includes income, collateral value and down payment.  The scoring models yield credit grades that represent the relative likelihood of repayment.  Customers with the highest probability of repayment are A-grade customers. Customers assigned a lower grade are determined to have a lower probability of repayment.  For loans that are approved, the credit grade influences the terms of the agreement, such as the required loan-to-value ratio and interest rate. After origination, credit grades are generally not updated.

CAF uses a combination of the initial credit grades and historical performance to monitor the credit quality of the auto loans receivable on an ongoing basis.  We validate the accuracy of the scoring models periodically.  Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment.

Ending Managed Receivables by Major Credit Grade

	As of August 31, 2024
	Fiscal Year of Origination (1)
(In millions)	2025		2024		2023		2022		2021		Prior to 2021		Total		% (2)
Core managed receivables (3):
A	$	2,432.5	$	3,204.6	$	2,137.6	$	1,237.3	$	410.1	$	139.3	$	9,561.4	53.8
B	1,194.6		1,987.3		1,432.4		968.0		358.6		155.7		6,096.6		34.3
C and other	252.0		330.0		404.1		314.3		141.6		66.8		1,508.8		8.5
Total core managed receivables	3,879.1		5,521.9		3,974.1		2,519.6		910.3		361.8		17,166.8		96.6
Other managed receivables (4):
C and other	167.8		214.0		144.2		58.3		7.1		11.2		602.6		3.4
Total ending managed receivables	$	4,046.9	$	5,735.9	$	4,118.3	$	2,577.9	$	917.4	$	373.0	$	17,769.4	100.0
Gross charge-offs	$	3.9	$	97.7	$	106.5	$	59.6	$	16.9	$	12.3	$	296.9

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	As of February 29, 2024
	Fiscal Year of Origination (1)
(In millions)	2024		2023		2022		2021		2020		Prior to 2020		Total		% (2)
Core managed receivables (3):
A	$	3,922.7	$	2,660.6	$	1,635.1	$	614.0	$	268.7	$	40.0	$	9,141.1	52.6
B	2,370.8		1,738.8		1,225.9		493.3		233.4		61.3		6,123.5		35.2
C and other	344.1		498.6		400.3		192.2		86.6		26.9		1,548.7		8.9
Total core managed receivables	6,637.6		4,898.0		3,261.3		1,299.5		588.7		128.2		16,813.3		96.7
Other managed receivables (4):
C and other	299.0		176.3		72.6		9.3		12.1		9.2		578.5		3.3
Total ending managed receivables	$	6,936.6	$	5,074.3	$	3,333.9	$	1,308.8	$	600.8	$	137.4	$	17,391.8	100.0
Gross charge-offs	$	111.0	$	248.6	$	129.8	$	41.0	$	19.7	$	11.4	$	561.5

(1)    Classified based on credit grade assigned when customers were initially approved for financing.

(2)    Percent of total ending managed receivables.

(3)    Represents CAF’s Tier 1 originations.

(4)    Represents CAF’s Tier 2 and Tier 3 originations.

Allowance for Loan Losses.  The allowance for loan losses at August 31, 2024 represents the net credit losses expected over the remaining contractual life of our managed receivables. The allowance for loan losses is determined using a net loss timing curve method (“method”), primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Due to the fact that losses for receivables with less than 18 months of performance history can be volatile, our net loss estimate weights both historical losses by credit grade at origination and actual loss data on the receivables to-date, along with forward loss curves, in estimating future performance. Once the receivables have 18 months of performance history, the net loss estimate reflects actual loss experience of those receivables to-date, along with forward loss curves, to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a receivable’s life. The net loss estimate is calculated by applying the loss rates developed using the methods described above to the amortized cost basis of the managed receivables at inception of the loan.

The output of the method is adjusted to take into account reasonable and supportable forecasts about the future. Specifically, the change in U.S. unemployment rates and the National Automobile Dealers Association used vehicle price index are used to predict changes in gross loss and recovery rates, respectively. An economic adjustment factor, based upon a single macroeconomic scenario, is developed to capture the relationship between changes in these forecasts and changes in gross loss and recovery rates. This factor is applied to the output of the method for the reasonable and supportable forecast period of two years. After the end of this two-year period, we revert to historical experience on a straight-line basis over a period of 12 months. We periodically consider whether the use of alternative metrics would result in improved model performance and revise the models when appropriate. We also consider whether qualitative adjustments are necessary for factors that are not reflected in the quantitative methods but impact the measurement of estimated credit losses. Such adjustments include the uncertainty 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.

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Allowance for Loan Losses

	Three Months Ended August 31, 2024
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	396.6	$	96.5	$	493.1	2.79
Charge-offs	(131.1)		(32.7)		(163.8)
Recoveries (2)	52.1		6.8		58.9
Provision for loan losses	99.7		12.9		112.6
Balance as of end of period	$	417.3	$	83.5	$	500.8	2.82

	Three Months Ended August 31, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	427.5	$	107.9	$	535.4	3.11
Charge-offs	(118.7)		(24.5)		(143.2)
Recoveries (2)	48.5		7.5		56.0
Provision for loan losses	75.7		14.1		89.8
Balance as of end of period	$	433.0	$	105.0	$	538.0	3.08

	Six Months Ended August 31, 2024
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	389.7	$	93.1	$	482.8	2.78
Charge-offs	(244.1)		(52.8)		(296.9)
Recoveries (2)	106.0		15.1		121.1
Provision for loan losses	165.7		28.1		193.8
Balance as of end of period	$	417.3	$	83.5	$	500.8	2.82

	Six Months Ended August 31, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	401.5	$	105.7	$	507.2	3.02
Charge-offs	(211.8)		(41.2)		(253.0)
Recoveries (2)	99.0		14.1		113.1
Provision for loan losses	144.3		26.4		170.7
Balance as of end of period	$	433.0	$	105.0	$	538.0	3.08

(1)    Percent of total ending managed receivables.

(2)    Net of costs incurred to recover vehicle.

During the first six months of fiscal 2025, the allowance for loan losses as a percent of total ending managed receivables increased by 4 basis points. The increase was primarily due to unfavorable loss performance related to CAF’s core receivables as well as CAF’s expanded investment in Tier 2, partially offset by the previously implemented tightened underwriting standards in response to the current environment. The increase in net charge-offs primarily reflects continued customer hardship in the current economic environment. The allowance for loan losses as of August 31, 2024 reflects our best estimate of expected future losses based on recent trends in delinquencies, loss performance, recovery rates and the economic environment.

Past Due Receivables. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during which the earliest of the following occurs: the receivable is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the receivable is otherwise deemed uncollectable. For purposes of

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determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.

Past Due Receivables

	As of August 31, 2024
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,506.6	$	5,609.7	$	1,204.3	$	16,320.6	$	465.1	$	16,785.7	94.47
Delinquent loans:
31-60 days past due	33.1		279.3		160.2		472.6		68.6		541.2		3.04
61-90 days past due	16.6		170.4		122.0		309.0		58.3		367.3		2.07
Greater than 90 days past due	5.1		37.2		22.3		64.6		10.6		75.2		0.42
Total past due	54.8		486.9		304.5		846.2		137.5		983.7		5.53
Total ending managed receivables	$	9,561.4	$	6,096.6	$	1,508.8	$	17,166.8	$	602.6	$	17,769.4	100.00

	As of February 29, 2024
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,088.1	$	5,666.3	$	1,243.7	$	15,998.1	$	447.1	$	16,445.2	94.56
Delinquent loans:
31-60 days past due	32.1		271.3		162.9		466.3		68.1		534.4		3.07
61-90 days past due	15.1		149.4		118.5		283.0		53.0		336.0		1.93
Greater than 90 days past due	5.8		36.5		23.6		65.9		10.3		76.2		0.44
Total past due	53.0		457.2		305.0		815.2		131.4		946.6		5.44
Total ending managed receivables	$	9,141.1	$	6,123.5	$	1,548.7	$	16,813.3	$	578.5	$	17,391.8	100.00

(1)    Percent of total ending managed receivables. 

5. Derivative Instruments and Hedging Activities

We use derivatives to manage certain risks arising from both our business operations and economic conditions, particularly with regard to issuances of debt.  Primary exposures include SOFR and other rates used as benchmarks in our securitizations and other debt financing.  We enter into derivative instruments to manage exposures related to the future known receipt or payment of uncertain cash amounts, the values of which are impacted by interest rates, and generally designate these derivative instruments as cash flow hedges for accounting purposes.  In certain cases, we may choose not to designate a derivative instrument as a cash flow hedge for accounting purposes due to uncertainty around the probability that future hedged transactions will occur. Our derivative instruments are used to manage (i) differences in the amount of our known or expected cash receipts and our known or expected cash payments principally related to the funding of our auto loans receivable, and (ii) exposure to variable interest rates associated with our term loans.

For the derivatives associated with our non-recourse funding vehicles that are designated as cash flow hedges, the changes in fair value are initially recorded in accumulated other comprehensive income (“AOCI”).  For the majority of these derivatives, the amounts are subsequently reclassified into CAF income in the period that the hedged forecasted transaction affects earnings, which occurs as interest expense is recognized on those future issuances of debt. During the next 12 months, we estimate that an additional $35.0 million will be reclassified from AOCI as an increase to CAF income. Changes in fair value related to derivatives that have not been designated as cash flow hedges for accounting purposes are recognized in the income statement in the period in which the change occurs. For the three and six months ended August 31, 2024, we recognized expense of $4.6 million and $7.7 million, respectively, in CAF income representing these changes in fair value.

As of August 31, 2024 and February 29, 2024, we had interest rate swaps outstanding with a combined notional amount of $5.12 billion and $5.21 billion, respectively, that were designated as cash flow hedges of interest rate risk. As of August 31,

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2024 and February 29, 2024, we had interest rate swaps with a combined notional amount of $386.1 million and $704.0 million, respectively, outstanding that were not designated as cash flow hedges for accounting purposes.

See Note 6 for discussion of fair values of financial instruments and Note 12 for the effect on comprehensive income.

6. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the “exit price”).  The fair value should be based on assumptions that market participants would use, including a consideration of nonperformance risk. 

We assess the inputs used to measure fair value using the three-tier hierarchy.  The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market. 

Level 1     Inputs include unadjusted quoted prices in active markets for identical assets or liabilities that we can access at the measurement date.

Level 2     Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices from identical or similar assets in inactive markets, observable inputs, such as interest rates and yield curves, and assumptions about risk.

Level 3     Inputs that are significant to the measurement that are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk).

Our fair value processes include controls that are designed to ensure that fair values are appropriate.  Such controls include model validation, review of key model inputs, analysis of period-over-period fluctuations and reviews by senior management.

Valuation Methodologies 

Money Market Securities.  Money market securities are cash equivalents, which are included in cash and cash equivalents, restricted cash from collections on auto loans receivable and other assets.  They consist of highly liquid investments with original maturities of three months or less and are classified as Level 1. 

Mutual Fund Investments.  Mutual fund investments consist of publicly traded mutual funds that primarily include diversified equity investments in large-, mid- and small-cap domestic and international companies or investment grade debt securities.  The investments, which are included in other assets, are held in a rabbi trust established to fund informally our executive deferred compensation plan and are classified as Level 1.

Derivative Instruments.  The fair values of our derivative instruments are included in either other current assets, other assets, accounts payable or other liabilities.  Our derivatives are not exchange-traded and are over-the-counter customized derivative instruments.  All of our derivative exposures are with highly rated bank counterparties.

We measure derivative fair values assuming that the unit of account is an individual derivative instrument and that derivatives are sold or transferred on a stand-alone basis.  We estimate the fair value of our derivatives using quotes determined by the derivative counterparties and third-party valuation services.  Quotes from third-party valuation services and quotes received from bank counterparties project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates and the contractual terms of the derivative instruments.  The models do not require significant judgment and model inputs can typically be observed in a liquid market; however, because the models include inputs other than quoted prices in active markets, all derivatives are classified as Level 2. 

Our derivative fair value measurements consider assumptions about counterparty and our own nonperformance risk.  We monitor counterparty and our own nonperformance risk and, in the event that we determine that a party is unlikely to perform under terms of the contract, we would adjust the derivative fair value to reflect the nonperformance risk.

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Items Measured at Fair Value on a Recurring Basis

	As of August 31, 2024
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,166,588		$	—		$	1,166,588
Mutual fund investments	28,185			—			28,185
Derivative instruments designated as hedges	—			16,100			16,100
Derivative instruments not designated as hedges	—			5,351			5,351
Total assets at fair value	$	1,194,773		$	21,451		$	1,216,224
Percent of total assets at fair value	98.2		%	1.8		%	100.0		%
Percent of total assets	4.4		%	0.1		%	4.5		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(23,868)		$	(23,868)
Total liabilities at fair value	$	—		$	(23,868)		$	(23,868)
Percent of total liabilities	—		%	0.1		%	0.1		%

	As of February 29, 2024
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,164,270		$	—		$	1,164,270
Mutual fund investments	24,312			—			24,312
Derivative instruments designated as hedges	—			45,761			45,761
Derivative instruments not designated as hedges	—			13,064			13,064
Total assets at fair value	$	1,188,582		$	58,825		$	1,247,407
Percent of total assets at fair value	95.3		%	4.7		%	100.0		%
Percent of total assets	4.4		%	0.2		%	4.6		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(2,302)		$	(2,302)
Total liabilities at fair value	$	—		$	(2,302)		$	(2,302)
Percent of total liabilities	—		%	—		%	—		%

Fair Value of Financial Instruments

The carrying value of our cash and cash equivalents, accounts receivable, other restricted cash deposits and accounts payable approximates fair value due to the short-term nature and/or variable rates associated with these financial instruments. Auto loans receivable are presented net of an allowance for estimated loan losses, which we believe approximates fair value. We believe that the carrying value of our revolving credit facility and term loans approximates fair value due to the variable rates associated with these obligations. The fair value of our senior unsecured notes, which are not carried at fair value on our consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices. The carrying value and fair value of the senior unsecured notes as of August 31, 2024 and February 29, 2024, respectively, are as follows:

(In thousands)	As of August 31, 2024		As of February 29, 2024
Carrying value	$	400,000	$	400,000
Fair value	$	388,795	$	380,249

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7. Cancellation Reserves

We recognize revenue for EPP products, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations.  Cancellations of these services may result from early termination by the customer, or default or prepayment on the finance contract.  The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base.

Cancellation Reserves

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2024		2023		2024		2023
Balance as of beginning of period	$	131.3	$	138.7	$	128.3	$	139.2
Cancellations	(22.6)		(23.2)		(43.9)		(47.8)
Provision for future cancellations	25.0		21.1		49.3		45.2
Balance as of end of period	$	133.7	$	136.6	$	133.7	$	136.6

The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. As of August 31, 2024 and February 29, 2024, the current portion of cancellation reserves was $72.3 million and $69.7 million, respectively.

8. Income Taxes

We had $31.3 million of gross unrecognized tax benefits as of August 31, 2024, and $28.8 million as of February 29, 2024.  There were no significant changes to the gross unrecognized tax benefits as reported for the fiscal year ended February 29, 2024.

Within the next 12 months, it is reasonably possible that statutes will expire and previously unrecognized tax benefits related to the prepayment of services provided by related entities will be recognized. Recognition of the benefits will decrease gross unrecognized tax benefits by approximately $14.0 million and would not materially impact our effective tax rate.

9. Debt

(In thousands)		As of August 31		As of February 29
Debt Description (1)	Maturity Date	2024		2024
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	June 2024	—		300,000
Term loan (2)	October 2026	699,703		699,633
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	510,744		516,544
Non-recourse notes payable	Various dates through January 2031	17,095,229		16,866,972
Total debt		18,705,676		18,783,149
Less: current portion		(571,816)		(797,449)
Less: unamortized debt issuance costs		(28,657)		(26,044)
Long-term debt, net		$	18,105,203	$	17,959,656

(1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

(2)    Borrowings accrue interest at variable rates based on SOFR, the federal funds rate, or the prime rate, depending on the type of borrowing.

Revolving Credit Facility. Borrowings under our $2.00 billion unsecured revolving credit facility (the “credit facility”) are available for working capital and general corporate purposes.  We pay a commitment fee on the unused portions of the available funds. Borrowings under the credit facility are either due “on demand” or at maturity depending on the type of borrowing.  Borrowings with “on demand” repayment terms are presented as short-term debt, while amounts due at maturity are presented as long-term debt.  As of August 31, 2024, the unused capacity of $2.00 billion was fully available to us.

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Term Loans. The $300 million term loan was paid in May 2024. Borrowings under the $700 million term loan are available for working capital and general corporate purposes. The interest rate on our term loan was 6.35% as of August 31, 2024. The $700 million term loan was classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Senior Notes. Borrowings under our unsecured senior notes totaling $400 million are available for working capital and general corporate purposes. As of August 31, 2024, all notes were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Financing Obligations.  Financing obligations relate to stores subject to sale-leaseback transactions that do not qualify for sale accounting.  The financing obligations were structured at varying interest rates and generally have initial lease terms ranging from 15 to 20 years with payments made monthly.  We have not entered into any new sale-leaseback transactions since fiscal 2009. In the event the agreements are modified or extended beyond their original term, the related obligation is adjusted based on the present value of the revised future payments, with a corresponding change to the assets subject to these transactions. Upon modification, the amortization of the obligation is reset, resulting in more of the payments being applied to interest expense in the initial years following the modification.  

Non-Recourse Notes Payable.  The non-recourse notes payable relate to auto loans receivable funded through non-recourse funding vehicles.  The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto loans receivable. The current portion of non-recourse notes payable represents principal payments that are due to be distributed in the following period. 

Notes payable related to our asset-backed term funding transactions accrue interest predominantly at fixed rates and have scheduled maturities through January 2031, but may mature earlier, depending upon the repayment rate of the underlying auto loans receivable.

Information on our funding vehicles of non-recourse notes payable as of August 31, 2024 are as follows:

(In billions)	Capacity
Warehouse facilities:
December 2024 expiration	$	0.70
March 2025 expiration	3.10
August 2025 expiration	2.30
Combined warehouse facility limit	$	6.10
Unused capacity	$	2.36
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.74
Asset-backed term funding transactions	13.36
Non-recourse notes payable	$	17.10

We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. The return requirements of warehouse facility investors could fluctuate significantly depending on market conditions.  At renewal, the cost, structure and capacity of the facilities could change.  These changes could have a significant impact on our funding costs.

In June 2024, we entered into a $625 million asset-backed term funding transaction related to our new non-prime securitization program. In July 2024, we entered into a $1.4 billion asset-backed term funding transaction comprised of higher prime auto loans receivable. Going forward, we plan to utilize separate asset-backed securitization programs to more broadly incorporate funding of CAF’s receivables across distinct higher prime and non-prime segments. We believe this new two-program strategy will enable us to fund incremental originations and support future CAF growth across the credit spectrum by creating additional funding capacity, driving additional finance income for the business over time.

See Note 4 for additional information on the related auto loans receivable.

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Capitalized Interest.  We capitalize interest in connection with the construction of certain facilities.  For the six months ended August 31, 2024 and 2023, we capitalized interest of $3.1 million and $2.9 million, respectively. 

Financial Covenants.  The credit facility, term loan and senior note agreements contain representations and warranties, conditions and covenants.  We must also meet financial covenants in conjunction with certain financing obligations.  The agreements governing our non-recourse funding vehicles contain representations and warranties, as well as financial covenants and performance triggers related to events of default.  As of August 31, 2024, we were in compliance with these financial covenants and our non-recourse funding vehicles were in compliance with these performance triggers.

10. Stock and Stock-Based Incentive Plans

(A)Share Repurchase Program

As of August 31, 2024, a total of $4.0 billion of board authorizations for repurchases of our common stock was outstanding, with no expiration date, of which $2.15 billion remained available for repurchase.

Common Stock Repurchases

	Three Months Ended				Six Months Ended
	August 31				August 31
	2024		2023		2024		2023
Number of shares repurchased (in thousands)	1,376.7		—		2,822.4		—
Average cost per share	$	77.04	$	—	$	74.41	$	—
Available for repurchase, as of end of period (in millions)	$	2,150.1	$	2,451.3	$	2,150.1	$	2,451.3

(B)Share-Based Compensation

Composition of Share-Based Compensation Expense

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2024		2023		2024		2023
Cost of sales	$	1,639	$	1,195	$	2,648	$	2,585
CarMax Auto Finance income	1,449		1,198		2,134		1,647
Selling, general and administrative expenses	32,133		31,294		79,234		66,598
Share-based compensation expense, before income taxes	$	35,221	$	33,687	$	84,016	$	70,830

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2024		2023		2024		2023
Nonqualified stock options	$	9,174	$	13,650	$	28,118	$	27,727
Cash-settled restricted stock units (RSUs)	17,277		12,804		28,667		27,915
Stock-settled market stock units (MSUs)	4,187		3,884		11,767		10,108
Other share-based incentives:
Stock-settled performance stock units (PSUs)	2,117		797		12,301		1,538
Restricted stock (RSAs)	—		76		—		307
Stock-settled deferred stock units (DSUs)	1,850		1,850		1,850		1,850
Employee stock purchase plan	616		626		1,313		1,385
Total other share-based incentives	$	4,583	$	3,349	$	15,464	$	5,080
Share-based compensation expense, before income taxes	$	35,221	$	33,687	$	84,016	$	70,830

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(C)Stock Incentive Plan Information

Share/Unit Activity

	Six Months Ended August 31, 2024
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 29, 2024	7,393		383		195		1,297
Granted	1,230		238		263		918
Exercised or vested and converted	(485)		(75)		(47)		(556)
Cancelled	(111)		(11)		—		(65)
Outstanding as of August 31, 2024	8,027		535		411		1,594
Weighted average grant date fair value per share/unit:
Granted	$	29.20	$	95.73	$	69.43	$	67.22
Ending outstanding	$	28.07	$	104.28	$	75.26	$	71.19
	As of August 31, 2024
Unrecognized compensation (in millions)	$	46.6	$	24.5	$	4.7

11. Net Earnings Per Share

Basic net earnings per share is computed by dividing net earnings available for basic common shares by the weighted average number of shares of common stock outstanding.  Diluted net earnings per share is computed by dividing net earnings available for diluted common shares by the sum of weighted average number of shares of common stock outstanding and dilutive potential common stock.  Diluted net earnings per share is calculated using the “if-converted” treasury stock method.

Basic and Dilutive Net Earnings Per Share Reconciliations

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands except per share data)	2024		2023		2024		2023
Net earnings	$	132,809	$	118,635	$	285,249	$	346,933
Weighted average common shares outstanding	155,866		158,479		156,513		158,298
Dilutive potential common shares:
Stock options	349		581		316		373
Stock-settled stock units and awards	311		178		287		229
Weighted average common shares and dilutive potential common shares	156,526		159,238		157,116		158,900
Basic net earnings per share	$	0.85	$	0.75	$	1.82	$	2.19
Diluted net earnings per share	$	0.85	$	0.75	$	1.82	$	2.18

Certain options to purchase shares of common stock were outstanding and not included in the calculation of diluted net earnings per share because their inclusion would have been antidilutive.  On a weighted average basis, for the three months ended August 31, 2024 and 2023, options to purchase 5,083,556 shares and 3,508,300 shares of common stock, respectively, were not included. For the six months ended August 31, 2024 and 2023, options to purchase 5,133,763 shares and 5,518,543 shares of common stock, respectively, were not included.

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12. Accumulated Other Comprehensive Income

Changes in Accumulated Other Comprehensive Income By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income
Balance as of February 29, 2024	$	(37,116)	$	96,395	$	59,279
Other comprehensive loss before reclassifications	—		(28,828)		(28,828)
Amounts reclassified from accumulated other comprehensive income	169		(21,563)		(21,394)
Other comprehensive income (loss)	169		(50,391)		(50,222)
Balance as of August 31, 2024	$	(36,947)	$	46,004	$	9,057

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2024		2023		2024		2023
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	49	$	58	$	99	$	116
CarMax Auto Finance income	3		3		7		7
Selling, general and administrative expenses	58		68		115		135
Total amortization reclassifications recognized in net pension expense	110		129		221		258
Tax expense	(25)		(31)		(52)		(62)
Amortization reclassifications recognized in net pension expense, net of tax	85		98		169		196
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	85		98		169		196
Cash Flow Hedges (Note 5):
Changes in fair value	(55,748)		35,002		(38,239)		(1,005)
Tax benefit (expense)	13,639		(8,535)		9,411		336
Changes in fair value, net of tax	(42,109)		26,467		(28,828)		(669)
Reclassifications to CarMax Auto Finance income	(14,010)		(12,295)		(28,508)		(24,859)
Tax benefit	3,413		2,997		6,945		6,060
Reclassification of hedge gains, net of tax	(10,597)		(9,298)		(21,563)		(18,799)
Net change in cash flow hedge unrecognized gains, net of tax	(52,706)		17,169		(50,391)		(19,468)
Total other comprehensive (loss) income, net of tax	$	(52,621)	$	17,267	$	(50,222)	$	(19,272)

Changes in the funded status of our retirement plans and changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in accumulated other comprehensive income. The cumulative balances are net of deferred taxes of $3.0 million as of August 31, 2024 and $19.3 million as of February 29, 2024.

13. Leases

Our leases primarily consist of operating and finance leases related to retail stores, office space, land and equipment. We also have stores subject to sale-leaseback transactions that do not qualify for sale accounting and are accounted for as financing obligations. For more information on these financing obligations see Note 9.

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The initial term for real property leases is typically 5 to 20 years. For equipment leases, the initial term generally ranges from 3 to 8 years. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 20 years or more. We include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise that option.

ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We include variable lease payments in the initial measurement of ROU assets and lease liabilities only to the extent they depend on an index or rate. Changes in such indices or rates are accounted for in the period the change occurs, and do not result in the remeasurement of the ROU asset or liability. We are also responsible for payment of certain real estate taxes, insurance and other expenses on our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. We generally account for non-lease components, such as maintenance, separately from lease components. For certain equipment leases, we apply a portfolio approach to account for the lease assets and liabilities.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The components of lease expense were as follows:

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2024		2023		2024		2023
Operating lease cost (1)	$	22,873	$	22,239	$	46,101	$	44,186
Finance lease cost:
Depreciation of lease assets	2,976		4,907		6,798		9,442
Interest on lease liabilities	6,920		6,407		13,591		12,502
Total finance lease cost	9,896		11,314		20,389		21,944
Total lease cost	$	32,769	$	33,553	$	66,490	$	66,130

(1)    Includes short-term leases and variable lease costs, which are immaterial.

Supplemental balance sheet information related to leases was as follows:

		As of August 31		As of February 29
(In thousands)	Classification	2024		2024
Assets:
Operating lease assets	Operating lease assets	$	495,783	$	520,717
Finance lease assets	Property and equipment, net (1)	191,774		174,998
Total lease assets		$	687,557	$	695,715
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	57,959	$	57,161
Finance leases	Accrued expenses and other current liabilities	23,608		20,877
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	473,158		496,210
Finance leases	Other liabilities	211,590		198,759
Total lease liabilities		$	766,315	$	773,007

(1)    Finance lease assets are recorded net of accumulated depreciation of $62.3 million as of August 31, 2024 and $55.5 million as of February 29, 2024.

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Lease term and discount rate information related to leases was as follows:

	As of August 31		As of February 29
Lease Term and Discount Rate	2024		2024
Weighted Average Remaining Lease Term (in years)
Operating leases	16.01		16.07
Finance leases	13.17		11.43
Weighted Average Discount Rate
Operating leases	5.10	%	5.05	%
Finance leases	15.79	%	17.16	%

Supplemental cash flow information related to leases was as follows:

	Six Months Ended August 31
(In thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	47,610	$	44,182
Operating cash flows from finance leases	$	12,642	$	12,076
Financing cash flows from finance leases	$	9,056	$	7,810
Lease assets obtained in exchange for lease obligations:
Operating leases	$	4,189	$	22,277
Finance leases	$	24,497	$	43,684

Maturities of lease liabilities were as follows:

	As of August 31, 2024
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2025, remaining	$	42,579	$	21,194
Fiscal 2026	78,928		48,763
Fiscal 2027	72,607		45,167
Fiscal 2028	68,493		38,332
Fiscal 2029	46,682		31,118
Thereafter	518,131		288,506
Total lease payments	827,420		473,080
Less: interest	(296,303)		(237,882)
Present value of lease liabilities	$	531,117	$	235,198

(1)    Lease payments exclude $4.7 million of legally binding minimum lease payments for leases signed but not yet commenced.

14. Supplemental Cash Flow Information

Supplemental disclosures of cash flow information:

	Six Months Ended August 31
(In thousands)	2024		2023
Non-cash investing and financing activities:
Increase (decrease) in accrued capital expenditures	$	816	$	(18,607)
Increase in financing obligations	$	—	$	4,527

See Note 13 for supplemental cash flow information related to leases.

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15. Contingent Liabilities

Litigation.  The company is a class member in a consolidated and settled class action lawsuit (In re: Takata Airbag Product Liability Litigation (U.S. District Court, Southern District of Florida)) against Toyota, Mazda, Subaru, BMW, Honda, Nissan, Ford and Volkswagen related to the economic loss associated with defective Takata airbags installed as original equipment in certain model vehicles from model years 2000-2019. In April 2020, CarMax received $40.3 million in net recoveries from the Toyota, Mazda, Subaru, BMW, Honda and Nissan settlement funds. In January 2022, CarMax received $3.8 million in net recoveries from the Ford settlement funds. On April 21, 2023, CarMax received $59.3 million in net recoveries from residual undisbursed funds in the Toyota, Mazda, Subaru, BMW, Honda and Nissan settlements. On August 9, 2023, CarMax received $7.9 million in additional residual funds in the BMW, Mazda, and Nissan settlements. CarMax remains a class member for residual funds in the Ford settlement. The Volkswagen settlement has not yet been resolved. We are unable to make a reasonable estimate of the amount or range of gain that could result from CarMax’s participation in the Ford residual or Volkswagen matters.

We are involved in various other legal proceedings in the normal course of business. Based upon our evaluation of information currently available, we believe that the ultimate resolution of any such proceedings will not have a material adverse effect, either individually or in the aggregate, on our financial condition, results of operations or cash flows.

Other Matters.  In accordance with the terms of real estate lease agreements, we generally agree to indemnify the lessor from certain liabilities arising as a result of the use of the leased premises, including environmental liabilities and repairs to leased property upon termination of the lease.  Additionally, in accordance with the terms of agreements entered into for the sale of properties, we generally agree to indemnify the buyer from certain liabilities and costs arising subsequent to the date of the sale, including environmental liabilities and liabilities resulting from the breach of representations or warranties made in accordance with the agreements.  We do not have any known material environmental commitments, contingencies or other indemnification issues arising from these arrangements.

As part of our customer service strategy, we guarantee the used vehicles we retail with a 90-day/4,000 mile limited warranty.  A vehicle in need of repair within this period will be repaired free of charge.  As a result, each vehicle sold has an implied liability associated with it.  Accordingly, based on historical trends, we record a provision for estimated future repairs during the guarantee period for each vehicle sold.  The liability for this guarantee was $31.0 million as of August 31, 2024, and $30.9 million as of February 29, 2024, and is included in accrued expenses and other current liabilities.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes and the MD&A included in our Annual Report on Form 10-K for the fiscal year ended February 29, 2024 (“fiscal 2024”), as well as our unaudited interim consolidated financial statements and the accompanying notes included in Item 1 of this Form 10-Q.  Note references are to the notes to unaudited interim consolidated financial statements included in Item 1.  All references to net earnings per share are to diluted net earnings per share.  Certain prior year amounts have been reclassified to conform to the current year’s presentation.  Amounts and percentages may not total due to rounding.

OVERVIEW

CarMax is the nation’s largest retailer of used vehicles.  We operate in two reportable segments:  CarMax Sales Operations and CarMax Auto Finance (“CAF”).  Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.  Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.

CarMax Sales Operations

Our sales operations segment consists of retail sales of used vehicles and related products and services, such as wholesale vehicle sales; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); advertising and subscription revenues; and vehicle repair service. We offer competitive, no-haggle prices; a broad selection of CarMax Quality Certified used vehicles; value-added EPP products; and superior customer service. Our omni-channel platform, which gives us the largest addressable market in the used car industry, empowers our retail customers to buy a car on their terms – online, in-store or an integrated combination of both.

Our customers finance the majority of the retail vehicles purchased from us, and availability of on-the-spot financing is a critical component of the sales process.  We provide financing to qualified retail customers through CAF and our arrangements with industry-leading third-party finance providers.  All of the finance offers, whether by CAF or our third-party providers, are backed by a 3-day payoff option.

As of August 31, 2024, we operated 247 used car stores in 109 U.S. television markets.

CarMax Auto Finance

In addition to third-party finance providers, we provide vehicle financing through CAF, which offers financing solely to customers buying retail vehicles from CarMax.  CAF allows us to manage our reliance on third-party finance providers and to leverage knowledge of our business to provide qualifying customers a competitive financing option.  As a result, we believe CAF enables us to capture additional profits, cash flows and sales.  CAF income primarily reflects the interest and fee income generated by the auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct expenses.  CAF income does not include any allocation of indirect costs.  After the effect of 3-day payoffs and vehicle returns, CAF financed 42.6% of our retail used vehicle unit sales in the first six months of fiscal 2025.  As of August 31, 2024, CAF serviced approximately 1.1 million customer accounts in its $17.77 billion portfolio of managed receivables.

Management regularly analyzes CAF’s operating results by assessing the competitiveness of our consumer offer, profitability, the performance of the auto loans receivable, including trends in credit losses and delinquencies, and CAF direct expenses.

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Revenues and Profitability

The sources of revenue and gross profit from the CarMax Sales Operations segment for the first six months of fiscal 2025 are as follows:

Net Sales and
Operating Revenues Gross Profit

A high-level summary of our financial results for the second quarter and first six months of fiscal 2025 as compared to the second quarter and first six months of fiscal 2024 is as follows (1):

(Dollars in millions except per share or per unit data)	Three Months Ended August 31, 2024			Change from Three Months Ended August 31, 2023		Six Months Ended August 31, 2024			Change from Six Months Ended August 31, 2023
Income statement information
Net sales and operating revenues	$	7,013.5		(0.9)	%	$	14,126.9		(4.3)	%
Gross profit	$	760.5		9.1	%	$	1,552.4		2.5	%
CAF income	$	115.6		(14.4)	%	$	262.6		(3.6)	%
Selling, general and administrative expenses	$	610.6		4.2	%	$	1,249.1		9.0	%
Net earnings	$	132.8		11.9	%	$	285.2		(17.8)	%
Unit sales information
Used unit sales	211,020			5.1	%	422,152			0.8	%
Change in used unit sales in comparable stores	4.3		%	N/A		0.1		%	N/A
Wholesale unit sales	141,458			(0.3)	%	289,143			(4.5)	%
Per unit information
Used gross profit per unit	$	2,269		0.8	%	$	2,308		—	%
Wholesale gross profit per unit	$	975		1.2	%	$	1,020		1.5	%
SG&A as a % of gross profit	80.3		%	(3.8)	%	80.5		%	4.8	%
Per share information
Net earnings per diluted share	$	0.85		13.3	%	$	1.82		(16.5)	%
Online sales metrics
Online retail sales (2)	15		%	1	%	15		%	1	%
Omni sales (3)	57		%	2	%	57		%	2	%
Revenue from online transactions (4)	29		%	(2)	%	30		%	(1)	%

(1)    Where applicable, amounts are net of intercompany eliminations.

(2)    An online retail sale is defined as a sale where the customer completes all four of the following activities remotely: reserving the vehicle; financing the vehicle, if needed; trading-in or opting out of a trade-in; and creating an online sales order.

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(3)    An omni sale is defined as a sale where customers complete at least one, but not all, of the four activities listed above online.

(4)    Revenue from online transactions is defined as revenue from retail sales that qualify as an online retail sale, as well as any related EPP and third-party finance contribution, wholesale sales where the winning bid was taken from an online bid and all revenue earned by Edmunds.

Net earnings per diluted share during the first six months of the prior fiscal year included a benefit of $0.32 in connection with the receipt of settlement proceeds in a class action lawsuit related to the economic loss associated with vehicles containing Takata airbags. Refer to “Results of Operations” for further details on our revenues and profitability.

Liquidity

Our primary ongoing sources of liquidity include funds provided by operations, proceeds from non-recourse funding vehicles and borrowings under our revolving credit facility or through other financing sources. In addition to funding our operations, this liquidity has been used to fund our capital expenditures and the repurchase of common stock under our share repurchase program.

Our current capital allocation strategy is to focus on our core business. Given our recent performance and continued market uncertainties, we are taking a conservative approach to our capital structure in order to maintain the flexibility that allows us to efficiently access the capital markets for both CAF and CarMax as a whole. We have taken steps to better align our expenses to sales as well as slowed the rate of our store growth. During the first half of fiscal 2025, we accelerated the pace of our share repurchases above the pace that we implemented in the third quarter of fiscal 2024. We believe we have the appropriate liquidity, access to capital and financial strength to support our operations and continue investing in our business for the next 12 months and thereafter for the foreseeable future.

Strategic Update and Future Outlook

Our omni-channel experience provides a common platform across all of CarMax that leverages our scale, nationwide footprint and infrastructure and empowers our customers to buy a vehicle on their terms, whether online, in-store or through an integrated combination of online and in-store experiences. While we expect our online and omni sales to grow over time, our goal is to provide the best experience whether in-store, online or a combination of the two. As a result, online, omni and in-person sales can vary from quarter to quarter depending on consumer preferences and how they choose to interact with us. We believe consumers in the used car industry will increasingly prefer to have the ability to shop and transact digitally. Approximately 70% of our customers leveraged some or all of our digital capabilities to complete their transactions during fiscal 2024, compared to approximately 40% when we completed our initial omni-channel roll-out at the end of fiscal 2020.

Our diversified business model, combined with our exceptional associates, national scale and unparalleled omni-channel experience, is a unique advantage in the used car industry that firmly positions us to drive profitable market share gains while creating shareholder value over the long-term. We expect the impact of our omni-channel capabilities will continue to grow as consumers demand a more personalized car-buying experience. Some of the recent actions we have taken to refine the customer experience and further differentiate our business include:

•We completed the nationwide rollout of our new order processing system across our stores and Customer Experience Centers (“CECs”). This system helps associates guide customers through each step of the buying journey and provides a more seamless experience for customers who prefer to blend self-progression with assistance from associates.

•We have focused on customer shopping accounts, which make it easier for customers to see the steps they have taken on their shopping journey, whether on their own or with help from an associate. These accounts also guide next steps and promote MaxCare, our ESP product. We are currently testing this offering in several stores and plan to deploy it nationwide later this year.

•We developed a new knowledge management system that we are testing in our CECs, which leverages generative AI to empower associates with instant access to the information they need. We believe this will enable our CECs to be more effective and efficient, and we plan to launch the bot across all CECs later this year.

•We released an enhancement to our finance-based shopping platform that seamlessly incorporates existing instant appraisal offers into our prequalification offering.

•We launched an EV hub as a consumer research resource on carmax.com. The hub contains guides that address top questions shoppers have about EVs, including hybrids, and serves to help consumers determine if an EV is right for them.

In addition to these actions, we are focused on driving down our cost of sales by pursuing incremental efficiency opportunities that we have identified across our logistics network and reconditioning operations. For example, we recently conducted a comprehensive review of our logistics operations and determined that centralizing some key functions will help us best leverage our network. During the second quarter of fiscal 2025, we centralized our home delivery, appraisal pick-up and MaxOffer

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moves by market. We believe this change enables us to achieve efficiencies in upcoming quarters as we roll out our enhanced transportation management system, which provides new planning and execution capabilities. We believe these initiatives focused on our logistics network and reconditioning operations will drive savings of approximately $200 per retail unit over the next year or two.

As we continue to evaluate our logistics operations, including equipment and leasing arrangements, we may incur charges that we estimate will be less than $10 million in the near term, which would likely be recorded in other (income)/expense. These charges are expected to be more than offset by the efficiencies gained in our logistics operations over time.

We purchased approximately 300,000 vehicles from consumers and dealers during the second quarter of fiscal 2025, up 2.9% from the prior year quarter. Of the approximately 269,000 vehicles purchased from consumers, more than half were purchased through our online instant appraisal experience. Approximately 31,000 vehicles were purchased through dealers, up 61.4% from the prior year quarter. Our self-sufficiency rate, including dealer buys, was over 70% for the second quarter of fiscal 2025. We leverage the Edmunds sales team to open new markets and sign up new dealers for MaxOffer.

While SG&A as a percent of gross profit can fluctuate from quarter to quarter depending on variability in gross profit, our initial goal on the path to strengthening our SG&A to gross profit leverage over time is to achieve a rate in the mid-70% range on an annual basis. Achieving this annual rate will require continued efficiency gains in our operating model, gross profit growth and healthier consumer demand. In fiscal 2025, we expect to require low-single-digit gross profit growth to lever SG&A.

We expect our diversified model, the scale of our operations, our investments and omni-channel strategy to provide a solid foundation for further growth. In our Annual Report on Form 10-K for fiscal 2024, we disclosed the following long-term targets:

•We are maintaining our goal to sell more than 2 million combined retail and wholesale units annually; however, we extended the timeframe to between fiscal 2026 and fiscal 2030 due to uncertainty in the timing of market recovery and as we continue to focus on profitable market share growth. We intend to update the timeframe to achieve this goal when we have greater visibility into the industry’s pace of recovery.

•Given higher average selling prices, we expect to achieve the $33 billion in annual revenue target sooner than units.

•Similarly, we also expect to achieve more than 5% nationwide market share of age 0- to 10-year old used vehicles sooner than units, but given the recent volatility in vehicle values, we will provide an updated timeframe for our expected achievement at the end of the current fiscal year.

The achievement of these targets is dependent on macroeconomic factors that could result in ongoing volatility in consumer demand.

In calendar 2023, we estimate we sold approximately 3.7% of the age 0- to 10-year old vehicles sold on a nationwide basis, a decrease from 4.0% in calendar 2022. Market share performance in calendar 2023 was negatively impacted by sharp vehicle depreciation in the used car industry and our focus on profitable market share. Our strategy to increase our market share includes focusing on:

•Delivering a customer-driven, omni-channel buying and selling experience that is a unique and powerful integration of our in-store and online capabilities.

•Utilizing advertising to drive customer growth, educate customers about our omni-channel platform and to differentiate and elevate our brand.

•Hiring, developing and retaining an engaged and skilled workforce.

•Leveraging data and advanced analytics to continuously improve the customer experience as well as our processes and systems.

•Improving efficiency in our stores and CECs and our logistics and reconditioning operations to reduce waste.

•Opening stores in new markets and expanding our presence in existing markets.

•Becoming the leading retailer of used EVs in the market. In support of this goal, Edmunds has launched several research and buying tools, which include providing data on the health and range of EV batteries as well as an evaluation of potential federal and state tax credits and incentives.

As of August 31, 2024, we had used car stores located in 109 U.S. television markets, which covered approximately 85% of the U.S. population.  The format and operating models utilized in our stores are continuously evaluated and may change or evolve over time based upon market and consumer expectations. During the first six months of fiscal 2025, we opened two stores and our second stand-alone reconditioning center in Richland, Mississippi. During the remainder of the fiscal year, we plan to open

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three stores and one stand-alone auction facility. We are utilizing our stand-alone reconditioning and auction locations to balance capacity and drive efficiencies across the network.

While we execute both our short- and long-term strategy, there are trends and factors that could impact our strategic approach or our results in the short and medium term. For additional information about risks and uncertainties facing our company, see “Risk Factors,” included in Part I. Item 1A of the Annual Report on Form 10-K for the fiscal year ended February 29, 2024.

CRITICAL ACCOUNTING ESTIMATES

For information on critical accounting policies, see "Critical Accounting Estimates" in the MD&A included in Item 7 of the Annual Report on Form 10-K for the fiscal year ended February 29, 2024.

RESULTS OF OPERATIONS – CARMAX SALES OPERATIONS

NET SALES AND OPERATING REVENUES

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2024		2023		Change		2024		2023		Change
Used vehicle sales	$	5,677.1	$	5,591.1	1.5	%	$	11,354.6	$	11,592.6	(2.1)	%
Wholesale vehicle sales	1,154.5		1,322.0		(12.7)	%	2,410.9		2,836.3		(15.0)	%
Other sales and revenues:
Extended protection plan revenues	121.4		101.7		19.3	%	240.2		212.9		12.8	%
Third-party finance income/(fees), net	1.4		(1.5)		197.2	%	(0.2)		(1.2)		80.5	%
Advertising & subscription revenues (1)	34.3		33.5		2.5	%	69.0		64.9		6.4	%
Other	24.9		27.0		(8.0)	%	52.5		55.3		(5.2)	%
Total other sales and revenues	182.0		160.7		13.2	%	361.5		331.9		8.9	%
Total net sales and operating revenues	$	7,013.5	$	7,073.8	(0.9)	%	$	14,126.9	$	14,760.9	(4.3)	%

(1)    Excludes intercompany sales and operating revenues that have been eliminated in consolidation.

UNIT SALES

	Three Months Ended August 31				Six Months Ended August 31
	2024	2023	Change		2024	2023	Change
Used vehicles	211,020	200,825	5.1	%	422,152	418,749	0.8	%
Wholesale vehicles	141,458	141,837	(0.3)	%	289,143	302,885	(4.5)	%

AVERAGE SELLING PRICES

	Three Months Ended August 31						Six Months Ended August 31
	2024		2023		Change		2024		2023		Change
Used vehicles	$	26,245	$	27,500	(4.6)	%	$	26,386	$	27,374	(3.6)	%
Wholesale vehicles	$	7,768	$	8,923	(12.9)	%	$	7,935	$	8,977	(11.6)	%

COMPARABLE STORE USED VEHICLE SALES CHANGES

	Three Months Ended August 31 (1)				Six Months Ended August 31 (1)
	2024		2023		2024		2023
Used vehicle units	4.3	%	(9.0)	%	0.1	%	(10.3)	%
Used vehicle revenues	(0.2)	%	(12.5)	%	(3.3)	%	(14.4)	%

(1)    Stores are added to the comparable store base beginning in their fourteenth full month of operation. We do not remove renovated stores from our comparable store base. Comparable store calculations include results for a set of stores that were included in our comparable store base in both the current and corresponding prior year periods.

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VEHICLE SALES CHANGES

	Three Months Ended August 31				Six Months Ended August 31
	2024		2023		2024		2023
Used vehicle units	5.1	%	(7.4)	%	0.8	%	(8.5)	%
Used vehicle revenues	1.5	%	(11.0)	%	(2.1)	%	(12.8)	%
Wholesale vehicle units	(0.3)	%	(11.2)	%	(4.5)	%	(12.5)	%
Wholesale vehicle revenues	(12.7)	%	(21.8)	%	(15.0)	%	(25.5)	%

USED VEHICLE FINANCING PENETRATION BY CHANNEL (BEFORE THE IMPACT OF 3-DAY PAYOFFS)

	Three Months Ended August 31 (1)				Six Months Ended August 31 (1)
	2024		2023		2024		2023
CAF (2)	44.6	%	46.4	%	45.0	%	45.9	%
Tier 2 (3)	17.7	%	18.1	%	18.2	%	19.3	%
Tier 3 (4)	6.7	%	6.4	%	7.1	%	6.6	%
Other (5)	31.0	%	29.1	%	29.7	%	28.2	%
Total	100.0	%	100.0	%	100.0	%	100.0	%

(1)    Calculated as used vehicle units financed for respective channel as a percentage of total used units sold.

(2)    Includes CAF’s Tier 2 and Tier 3 loan originations, which represent approximately 2% of total used units sold.

(3)    Third-party finance providers who generally pay us a fee or to whom no fee is paid.

(4)    Third-party finance providers to whom we pay a fee.

(5)    Represents customers arranging their own financing and customers that do not require financing.

CHANGE IN USED CAR STORE BASE

	Three Months Ended August 31		Six Months Ended August 31
	2024	2023	2024	2023
Used car stores, beginning of period	245	241	245	240
Store openings	2	—	2	1
Used car stores, end of period	247	241	247	241

During the first six months of fiscal 2025, we opened two stores in existing television markets (El Paso, TX and Gainesville, GA).

Used Vehicle Sales.  The 1.5% increase in used vehicle revenues in the second quarter of fiscal 2025 was primarily driven by a 5.1% increase in used unit sales, partially offset by a 4.6% decrease in average retail selling price, or approximately $1,250. The increase in used units included a 4.3% increase in comparable store used unit sales. For the first six months of fiscal 2025, used vehicle revenues decreased 2.1%, driven by a 3.6% decrease in average selling price, or approximately $1,000, partially offset by a 0.8% increase in used unit sales. The increase in used units included a 0.1% increase in comparable store used unit sales. Online retail sales, as defined previously, accounted for 15% of used unit sales for both the second quarter and first six months of fiscal 2025 compared with 14% for both the second quarter and first six months of fiscal 2024. Based on current trends, we anticipate our comparable store used unit sales to remain positive for the third quarter of fiscal 2025, relatively in line with, but slightly below, our second quarter results.

The decrease in average retail selling price in both the second quarter and first six months of fiscal 2025 reflected lower vehicle acquisition costs, partially offset by shifts in the mix of our sales by vehicle age and class.

Wholesale Vehicle Sales. Vehicles sold at our wholesale auctions are, on average, approximately 10 years old with more than 100,000 miles and are primarily comprised of vehicles purchased through our appraisal process that do not meet our retail standards. Our wholesale auction prices usually reflect trends in the general wholesale market for the types of vehicles we sell, although they can also be affected by changes in vehicle mix or the average age, mileage or condition of the vehicles being sold.

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The 12.7% decrease in wholesale vehicle revenues in the second quarter of fiscal 2025 was primarily due to a decrease in average selling price of 12.9%, or approximately $1,150, and a 0.3% decrease in unit sales. For the first six months of fiscal 2025, wholesale vehicle revenues decreased 15.0%, driven by a decrease in average selling price of 11.6%, or approximately $1,050, and a 4.5% decrease in unit sales.

The decrease in average selling price during both the second quarter and first six months of fiscal 2025 was primarily due to decreased acquisition costs and shifts in the mix of our sales by vehicle age.

Other Sales and Revenues.  Other sales and revenues include revenue from the sale of ESPs and GAP (collectively reported in EPP revenues, net of a reserve for estimated contract cancellations), net third-party finance income/(fees), advertising and subscription revenues earned by our Edmunds business, and other revenues, which are predominantly comprised of service department sales. The fees we pay to the Tier 3 providers are reflected as an offset to finance fee revenues received from the Tier 2 providers. The mix of our retail vehicles financed by CAF, Tier 2 and Tier 3 providers, or customers that arrange their own financing, may vary from quarter to quarter depending on several factors, including the credit quality of applicants, changes in providers’ credit decisioning and external market conditions. Changes in originations by one tier of credit providers may also affect the originations made by providers in other tiers.

Other sales and revenues increased 13.2% and 8.9% in the second quarter and first six months of fiscal 2025, respectively, reflecting increases in EPP revenues. EPP revenues increased 19.3% and 12.8% in the second quarter and first six months of fiscal 2025, respectively, largely reflecting increased margins, partially offset by decreased penetration.

Seasonality.  Historically, our business has been seasonal.  Our stores typically experience their strongest traffic and sales in the spring and summer, with an increase in traffic and sales in February and March, coinciding with federal income tax refund season. Sales are typically slowest in the fall.

GROSS PROFIT

	Three Months Ended August 31 (1)						Six Months Ended August 31 (1)
(In millions)	2024		2023		Change		2024		2023		Change
Used vehicle gross profit	$	478.8	$	452.1	5.9	%	$	974.3	$	966.7	0.8	%
Wholesale vehicle gross profit	137.9		136.6		0.9	%	295.0		304.4		(3.1)	%
Other gross profit	143.8		108.1		33.1	%	283.1		243.1		16.5	%
Total	$	760.5	$	696.8	9.1	%	$	1,552.4	$	1,514.2	2.5	%

(1)    Amounts are net of intercompany eliminations.

GROSS PROFIT PER UNIT

	Three Months Ended August 31 (1)						Six Months Ended August 31 (1)
	2024			2023			2024			2023
	$ per unit(2)		%(3)	$ per unit(2)		%(3)	$ per unit(2)		%(3)	$ per unit(2)		%(3)
Used vehicle gross profit	$	2,269	8.4	$	2,251	8.1	$	2,308	8.6	$	2,309	8.3
Wholesale vehicle gross profit	$	975	11.9	$	963	10.3	$	1,020	12.2	$	1,005	10.7
Other gross profit	$	682	79.0	$	538	67.2	$	671	78.3	$	580	73.2

(1)    Amounts are net of intercompany eliminations. Those eliminations had the effect of increasing used vehicle gross profit per unit and wholesale vehicle gross profit per unit and decreasing other gross profit per unit by immaterial amounts.

(2)    Calculated as category gross profit divided by its respective units sold, except the other category, which is divided by total used units sold.

(3)    Calculated as a percentage of its respective sales or revenue.

Used Vehicle Gross Profit.  We target a dollar range of gross profit per used unit sold.  The gross profit dollar target for an individual vehicle is based on a variety of factors, including its probability of sale and its mileage relative to its age; however, it is not primarily based on the vehicle’s selling price.  Our ability to quickly adjust appraisal offers to be consistent with trends in the broader trade-in market and the pace of our inventory turns reduce our exposure to the inherent continual fluctuation in used vehicle values and contribute to our ability to manage gross profit dollars per unit. Gross profit per used unit is consistent across our omni-channel platform.

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We systematically adjust individual vehicle prices based on proprietary pricing algorithms in order to appropriately balance sales trends, inventory turns and gross profit achievement.  Other factors that may influence gross profit include the wholesale and retail vehicle pricing environments, vehicle reconditioning and logistics costs, and the percentage of vehicles sourced directly from consumers and dealers through our appraisal process.  Vehicles purchased directly from consumers and dealers generally have a lower cost per unit compared with vehicles purchased at auction or through other channels, which may generate more gross profit per unit. In any given period, our gross profit may also be impacted by the age mix of vehicles sold, as older vehicles are generally more profitable. We monitor macroeconomic factors and pricing elasticity and adjust our pricing accordingly to optimize unit sales and profitability while also maintaining a competitively priced inventory.

Used vehicle gross profit increased 5.9% in the second quarter of fiscal 2025, driven primarily by the 5.1% increase in total used unit sales. Used vehicle gross profit increased 0.8% in the first six months of fiscal 2025, driven primarily by the 0.8% increase in total used unit sales. Used vehicle gross profit per unit was in line with the prior year period for both the second quarter and first six months of fiscal 2025. We continue to focus on striking the right balance between covering cost increases, maintaining margin and passing along efficiencies to consumers to support vehicle affordability.

Wholesale Vehicle Gross Profit.  Our wholesale gross profit per unit reflects the demand for older, higher mileage vehicles, which are the mainstay of our auctions, as well as strong dealer attendance and resulting high dealer-to-car ratios at our auctions.  The frequency of our auctions, which are generally held weekly or bi-weekly, minimizes the depreciation risk on these vehicles.  Our ability to adjust appraisal offers in response to the wholesale pricing environment is a key factor that influences wholesale gross profit.

Wholesale vehicle gross profit increased 0.9% in the second quarter of fiscal 2025, primarily driven by a $12 increase in wholesale vehicle gross profit per unit, partially offset by a 0.3% decrease in wholesale unit sales. Wholesale vehicle gross profit decreased 3.1% in the first six months of fiscal 2025, primarily driven by a 4.5% decrease in wholesale unit sales, partially offset by a $15 increase in wholesale vehicle gross profit per unit.

Other Gross Profit.  Other gross profit includes profits related to EPP revenues, net third-party finance income/(fees), advertising and subscription profits earned by our Edmunds business, and other revenues. Other revenues are predominantly comprised of service department operations, including used vehicle reconditioning.  We have no cost of sales related to EPP revenues or net third-party finance income/(fees), as these represent revenues paid to us by certain third-party providers.  Third-party finance income is reported net of the fees we pay 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.

Other gross profit increased 33.1% and 16.5% in the second quarter and first six months of fiscal 2025, respectively, primarily driven by increases in EPP revenues, as discussed above, as well as improvements in service department margins. The increase in service department profits for both the second quarter and first six months of fiscal 2025 was driven by efficiency and cost coverage measures that we have implemented. The increase in service department margins for the second quarter was also impacted by the increase in used unit sales. We expect to continue to see significant year-over-year favorability in service department profits for the full year of fiscal 2025, as governed by sales performance given the leverage/deleverage nature of service.

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SG&A Expenses

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

Three Months Ended August 31, 2024    Six Months Ended August 31, 2024    

COMPONENTS OF SG&A EXPENSES COMPARED WITH PRIOR PERIOD (1)

	Three Months Ended August 31								Six Months Ended August 31
(In millions except per unit data)	2024			2023			Change		2024			2023			Change
Compensation and benefits:
Compensation and benefits, excluding share-based compensation expense	$	321.3		$	305.7		5.1	%	$	649.4		$	636.4		2.0	%
Share-based compensation expense	32.1			31.3			2.7	%	79.2			66.6			19.0	%
Total compensation and benefits (2)	$	353.4		$	337.0		4.9	%	$	728.6		$	703.0		3.6	%
Occupancy costs	74.7			67.8			10.3	%	145.3			133.9			8.5	%
Advertising expense	63.0			66.3			(5.0)	%	134.7			138.2			(2.5)	%
Other overhead costs (3)	119.5			114.6			4.3	%	240.5			170.4			41.2	%
Total SG&A expenses	$	610.6		$	585.7		4.2	%	$	1,249.1		$	1,145.5		9.0	%
SG&A as a % of gross profit	80.3		%	84.1		%	(3.8)	%	80.5		%	75.7		%	4.8	%

(1)    Amounts are net of intercompany eliminations.

(2)    Excludes compensation and benefits related to reconditioning and vehicle repair service, which are included in cost of sales. See Note 10 for details of share-based compensation expense by grant type.

(3)    Includes IT expenses, non-CAF bad debt, insurance, travel, charitable contributions, preopening and relocation costs and other administrative expenses.

SG&A expenses increased $24.9 million, or 4.2%, in the second quarter of fiscal 2025. Factors contributing to the increase include the following:

•$15.6 million increase in compensation and benefits, excluding share-based compensation expense, driven by an increase in the corporate bonus accrual, which was reduced in the prior year period.

•$6.9 million increase in occupancy costs driven by the timing of store maintenance spend and inflationary pressures on utilities.

SG&A expenses increased $103.6 million, or 9.0%, in the first six months of fiscal 2025. Factors contributing to the increase include the following:

•$70.1 million increase in other overhead costs driven by the $67.2 million benefit in the prior year period in connection with the receipt of settlement proceeds in a class action lawsuit related to the economic loss associated with vehicles containing Takata airbags.

•$13.0 million increase in compensation and benefits, excluding share-based compensation expense, driven by an increase in the corporate bonus accrual, which was reduced in the second quarter of the prior year.

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•$12.6 million increase in stock-based compensation expense driven by the retirement eligibility of certain senior executives.

•$11.4 million increase in occupancy costs driven by the timing of store maintenance spend and inflationary pressures on utilities.

Excluding the legal settlement in the prior year period, SG&A expenses in the first six months of fiscal 2025 increased 3.0%, or $36.4 million.

While advertising expense on a per total unit basis for the second quarter of fiscal 2025 was slightly lower than our previously disclosed annual target, we continue to expect the full-year advertising spend for fiscal 2025 to be consistent with fiscal 2024 at approximately $200 per total unit.

Interest Expense.  Interest expense includes the interest related to short- and long-term debt, financing obligations and finance lease obligations.  It does not include interest on the non-recourse notes payable, which is reflected within CAF income.

Interest expense of $27.0 million and $58.4 million in the second quarter and first six months of fiscal 2025, respectively, was relatively consistent with $31.6 million and $62.1 million in the second quarter and first six months of fiscal 2024, respectively.

Other Income. Other income of $3.3 million and $2.9 million in the second quarter and first six months of fiscal 2025, respectively, was relatively consistent with $2.6 million and $3.8 million in the second quarter and first six months of fiscal 2024, respectively.

Income Taxes.  The effective income tax rate was 25.3% in the second quarter of fiscal 2025 and 25.8% in the first six months of fiscal 2025 versus 25.1% in the second quarter of fiscal 2024 and 25.5% in the first six months of fiscal 2024.

RESULTS OF OPERATIONS – CARMAX AUTO FINANCE

CAF income primarily reflects interest and fee income generated by CAF’s portfolio of auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct CAF expenses. Total interest margin reflects the spread between interest and fees charged to consumers and our funding costs. Changes in the interest margin on new originations affect CAF income over time. Increases in interest rates, which affect CAF’s funding costs, or other competitive pressures on consumer rates, could result in compression in the interest margin on new originations. Changes in the allowance for loan losses as a percentage of ending managed receivables reflect the effect of changes in loss and delinquency experience and economic factors on our outlook for net losses expected to occur over the remaining contractual life of the loans receivable as well as changes in the mix of credit quality originated.

CAF’s managed portfolio is composed primarily of loans originated over the past several years.  Trends in receivable growth and interest margins primarily reflect the cumulative effect of changes in the business over a multi-year period. Historically, we have sought to originate loans in our core portfolio, which excludes Tier 2 and Tier 3 originations, with an underlying risk profile that we believe will, in the aggregate, result in cumulative net losses in the 2% to 2.5% range (excluding CECL-required recovery costs) over the life of the loans.  Actual loss performance of the loans may fall outside of this range based on various factors, including intentional changes in the risk profile of originations, economic conditions and wholesale recovery rates.  The range was established to provide consistent performance for CAF’s previous prime asset-backed securitization program. As discussed below, CAF has expanded its securitization program to include higher prime and non-prime issuances, both of which are expected to perform differently from the historical range.

Current period originations reflect current trends in both our retail sales and the CAF business, including the volume of loans originated, current interest rates charged to consumers, loan terms and average credit scores.  Loans originated in a given fiscal period impact CAF income over time, as we recognize income over the life of the underlying auto loan. CAF also originates a small portion of auto loans to customers who typically would be financed by our Tier 2 and Tier 3 finance providers, in order to better understand the performance of these loans, mitigate risk and add incremental profits. The targeted percentage of Tier 2 and Tier 3 originations has fluctuated over the past several years. CAF currently targets originating less than 5% of the total Tier 3 loan volume. Within the Tier 2 space, CAF continues to originate loans on a test basis and we slightly increased our investment in this space during the prior fiscal year. Any future adjustments in Tier 2 and Tier 3 will consider the broader lending environment, which includes funding availability, along with the long-term sustainability of the change. These loans have higher loss and delinquency rates than the remainder of the CAF portfolio, as well as higher contract rates.

CAF has expanded its asset-backed securitization program to allow for distinct higher prime and non-prime issuances, with higher prime generally representing FICO scores greater than 650 and non-prime generally representing FICO scores below

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650. We believe this strategy will enable CAF to efficiently fund incremental originations and support future CAF growth across the credit spectrum by creating additional funding capacity, driving additional finance income for the business over time. In June 2024, CAF closed on its first non-prime securitization deal, and in July 2024, CAF closed on its first higher prime securitization deal under this expanded funding strategy.

During the second quarter of fiscal 2025, CAF began testing its new full-spectrum credit scoring models and corresponding strategies across both the Tier 1 and Tier 2 spaces, and we expect our Tier 3 testing of the new model to begin during the third quarter of fiscal 2025. We would expect each additional percentage point of CAF penetration to generate $10 million to $12 million in lifetime pre-tax income per year of origination, net of the impact to finance partner participation fees. Our pre-tax income expectations will be impacted by the volume of loans originated, interest rates charged to customers, loan terms, loss rates, average credit scores and the broader macroeconomic and lending environments. While this income is earned over time, the provision for lifetime losses is recognized at the time of origination. We believe our unique finance platform with a full-spectrum in-house lending operation, coupled with a robust network of partner lenders, will strengthen our competitive advantage.

CAF income does not include any allocation of indirect costs.  Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions.  Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses.

See Note 3 for additional information on CAF income and Note 4 for information on auto loans receivable, including credit quality.

SELECTED CAF FINANCIAL INFORMATION

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2024		% (1)	2023		% (1)	2024		% (1)	2023		% (1)
Interest margin:
Interest and fee income	$	464.5	10.5	$	416.9	9.6	$	917.0	10.4	$	817.4	9.5
Interest expense	(193.7)		(4.4)	(152.0)		(3.5)	(376.0)		(4.3)	(294.6)		(3.4)
Total interest margin	$	270.8	6.1	$	264.9	6.1	$	541.0	6.1	$	522.8	6.1
Provision for loan losses	$	(112.6)	(2.5)	$	(89.8)	(2.1)	$	(193.8)	(2.2)	$	(170.7)	(2.0)
CarMax Auto Finance income	$	115.6	2.6	$	135.0	3.1	$	262.6	3.0	$	272.3	3.2

(1)    Annualized percentage of total average managed receivables.

CAF ORIGINATION INFORMATION (AFTER THE IMPACT OF 3-DAY PAYOFFS)

	Three Months Ended August 31						Six Months Ended August 31
	2024			2023			2024			2023
Net loans originated (in millions)	$	2,159.7		$	2,197.2		$	4,425.5		$	4,537.6
Vehicle units financed	88,560			86,010			179,924			179,060
Net penetration rate (1)	42.0		%	42.8		%	42.6		%	42.8		%
Weighted average contract rate	11.5		%	11.1		%	11.4		%	11.1		%
Weighted average credit score (2)	725			721			723			718
Weighted average loan-to-value (LTV) (3)	89.5		%	88.8		%	89.3		%	88.4		%
Weighted average term (in months)	66.9			65.0			66.9			65.2

(1)    Vehicle units financed as a percentage of total used units sold.

(2)    The credit scores represent FICO® scores and reflect only receivables with obligors that have a FICO® score at the time of application. The FICO® score with respect to any receivable with co-obligors is calculated as the average of each obligor’s FICO® score at the time of application. FICO® scores are not a significant factor in our primary scoring model, which relies on information from credit bureaus and other application information as discussed in Note 4.  FICO® is a federally registered servicemark of Fair Isaac Corporation.

(3)    LTV represents the ratio of the amount financed to the total collateral value, which is measured as the vehicle selling price plus applicable taxes, title and fees.

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LOAN PERFORMANCE INFORMATION

	As of and for the Three Months Ended August 31						As of and for the Six Months Ended August 31
(In millions)	2024			2023			2024			2023
Total ending managed receivables	$	17,769.4		$	17,442.8		$	17,769.4		$	17,442.8
Total average managed receivables	$	17,728.8		$	17,315.6		$	17,640.0		$	17,159.5
Allowance for loan losses	$	500.8		$	538.0		$	500.8		$	538.0
Allowance for loan losses as a percentage of ending managed receivables	2.82		%	3.08		%	2.82		%	3.08		%
Net credit losses on managed receivables	$	104.9		$	87.2		$	175.8		$	139.9
Annualized net credit losses as a percentage of total average managed receivables	2.36		%	2.01		%	1.99		%	1.63		%
Past due accounts as a percentage of ending managed receivables	5.53		%	5.45		%	5.53		%	5.45		%
Average recovery rate (1)	47.8		%	53.9		%	48.3		%	56.6		%

(1)    The average recovery rate represents the average percentage of the outstanding principal balance we receive when a vehicle is repossessed and liquidated, generally at our wholesale auctions.  While in any individual period conditions may vary, over the past 10 fiscal years, the annual recovery rate has ranged from a low of 46% to a high of 71%, and it is primarily affected by the wholesale market environment.

•CAF Income (Decreases of $19.4 million, or 14.4%, and $9.8 million, or 3.6%, in the second quarter and first six months of fiscal 2025, respectively)

◦The decrease in CAF income for both the second quarter and first six months of fiscal 2025 reflects an increase in the provision for loan losses, partially offset by an increase in average managed receivables.

•Total Interest Margin was 6.1% in both the second quarter and first six months of fiscal 2025, consistent with both the second quarter and first six months of fiscal 2024.

•Provision for Loan Losses

◦The provision for loan losses resulted in expense of $112.6 million and $193.8 million in the second quarter and first six months of fiscal 2025, respectively, compared with expense of $89.8 million and $170.7 million in the second quarter and first six months of fiscal 2024, respectively.

◦The provision for loan losses in the second quarter of fiscal 2025 included an increase of $52.2 million in our estimate of lifetime losses on existing loans, which was nearly an 11% increase in our loss expectations. We believe the increase is largely related to the industry wide worsening in loss experience. The remaining $60.4 million reflected our estimate of lifetime losses on current quarter originations.

◦The increases in the provision for loan losses in both periods were primarily driven by unfavorable loss performance. We experienced higher losses for receivables originated in 2022 and 2023, when average selling prices were elevated and these customers were later challenged with the macro-inflationary environment. In addition, we experiences higher losses pertaining to a segment of customers generally concentrated at the lower end of Tier 1, which we addressed through further tightening in April 2024. While the loan loss reserve was adjusted for these receivables during the first quarter of fiscal 2025, further deterioration was observed during the second quarter, resulting in an additional adjustment to the reserve.

◦The allowance for loan losses as a percentage of ending managed receivables was 2.82% as of August 31, 2024, compared with 3.08% as of August 31, 2023 and 2.78% as of February 29, 2024. The allowance percentage increased from February primarily due to worsening loss performance in CAF’s portfolio of core receivables as well as expanded investment in Tier 2, partially offset by the previously implemented tightened underwriting standards in response to the current environment. Despite the additional reserve adjustment, the material tightening deployed in April 2023 had a meaningful impact on subsequent vintage loss rates.

◦Despite the year-over-year growth in the provision for loan losses, the allowance for loan losses as a percentage of ending managed receivables only increased 3 basis points from the first quarter of fiscal 2025, which is a result of credit tightening measures we implemented over the course of the last two years and their growing impact on our receivable portfolio.

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•Loan Performance

◦The decline in net loan originations in both the second quarter and first six months of fiscal 2025 resulted from decreases in the average amount financed and the net penetration rate, partially offset by an increase in used unit sales.

◦CAF net penetration decreased in the second quarter and first six months of fiscal 2025 compared to the prior year periods, primarily reflecting shifts in the mix of customers utilizing outside financing.

◦The weighted average contract rate increased to 11.5% and 11.4% in the second quarter and first six months of fiscal 2025, respectively, compared with 11.1% in both the second quarter and first six months of fiscal 2024. The increases for both periods were primarily due to higher rates charged to customers as well as our expansion of Tier 2 originations within CAF’s portfolio, partially offset by a reduction in Tier 3 originations.

◦The year-over-year increase in past due accounts as a percentage of ending managed receivables in the second quarter and first six months of fiscal 2025 reflects an increase in delinquencies, as noted industry-wide, as well as our expansion of Tier 2 originations within CAF’s portfolio. The increase in delinquencies primarily reflects customer hardship in the current economic environment.

PLANNED FUTURE ACTIVITIES

During the first six months of fiscal 2025, we opened two stores as well as one stand-alone reconditioning center. For the remainder of fiscal 2025, we anticipate opening three new store locations and one stand-alone auction facility. We currently estimate capital expenditures will total between $500 million and $550 million in fiscal 2025. Capital expenditures were $465.3 million in fiscal 2024. Planned capital spending in fiscal 2025 largely consists of spending to support our future long-term growth in stand-alone reconditioning and auction facilities, as well as our new stores.

FINANCIAL CONDITION 

Liquidity and Capital Resources

Our primary ongoing cash requirements are to fund our existing operations, store and capacity expansion, store improvement, CAF and strategic growth initiatives. Since fiscal 2013, we have also elected to use cash for our share repurchase program.  Our primary ongoing sources of liquidity include funds provided by operations, proceeds from non-recourse funding vehicles and borrowings under our revolving credit facility or through other financing sources.

Our current capital allocation strategy is to focus on our core business. Given our recent performance and continued market uncertainties, we are taking a conservative approach to our capital structure in order to maintain the flexibility that allows us to efficiently access the capital markets for both CAF and CarMax as a whole. We have taken steps to better align our expenses to sales as well as slowed the rate of our store growth. During the first half of fiscal 2025, we accelerated the pace of our share repurchases above the pace that we implemented in the third quarter of fiscal 2024. We believe we have the appropriate liquidity, access to capital and financial strength to support our operations and continue investing in our business for the next 12 months and thereafter for the foreseeable future.

We have historically managed leverage based on a number of factors, including internal financial forecasts, consideration of CAF’s operational and capital needs, external peer benchmarking, requirements of our debt agreements and macroeconomic conditions. Generally, we expect to use our revolving credit facility and other financing sources, together with stock repurchases, to maintain a leverage profile that ensures operating flexibility while supporting continued investment in the business.

Operating Activities.  During the first six months of fiscal 2025, net cash provided by operating activities totaled $501.4 million compared with net cash used in operating activities of $61.1 million in the prior year period.

As of August 31, 2024, total inventory was $3.40 billion, representing a decrease of $280.3 million compared with the balance as of the start of the fiscal year.  The decrease was primarily due to a decrease in volume driven by seasonality as well as our strategy to mitigate depreciation in the current market and a decrease in the average carrying cost of inventory due to lower vehicle acquisition costs.

Our operating cash flows are significantly impacted by changes in auto loans receivable, which increased $595.5 million in the current year period compared with $828.6 million in the prior year period.  The majority of the changes in auto loans receivable are accompanied by changes in non-recourse notes payable, which are issued to fund auto loans originated by CAF. Net issuances of non-recourse notes payable were $228.3 million in the current year period compared with $647.5 million in the prior year period and are separately reflected as cash from financing activities. Due to the presentation differences between auto loans receivable and non-recourse notes payable on the consolidated statements of cash flows, fluctuations in these

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amounts can have a significant impact on our operating and financing cash flows without affecting our overall liquidity, working capital or cash flows.

The change in net cash provided by (used in) operating activities for the first six months of the current fiscal year compared with the prior year period primarily reflected the changes in inventory and auto loans receivable, as discussed above, partially offset by the net impact of volume and timing-related changes in accounts receivable and accounts payable.

Investing Activities. During the first six months of fiscal 2025, net cash used in investing activities totaled $215.5 million compared with $211.8 million in fiscal 2024.  Capital expenditures were $213.1 million in the current year period versus $210.2 million in the prior year period.  Capital expenditures primarily included land purchases and construction costs to support our growth capacity initiatives and new store openings.  We maintain a multi-year pipeline of sites to support our store and capacity growth, so portions of capital spending in one year may relate to locations that we open in subsequent fiscal years.

As of August 31, 2024, 164 of our 247 used car stores were located on owned sites and 83 were located on leased sites, including 27 land-only leases and 56 land and building leases.

Financing Activities.  During the first six months of fiscal 2025, net cash used in financing activities totaled $283.1 million compared with net cash provided by financing activities of $547.0 million in the prior year period.  Included in these amounts were net issuances of non-recourse notes payable of $228.3 million compared with $647.5 million in the prior year period. Non-recourse notes payable are typically used to fund changes in auto loans receivable (see “Operating Activities”).

During the first six months of fiscal 2025, cash used in financing activities was impacted by net payments on our long-term debt of $306.3 million as well as stock repurchases of $213.3 million. During the first six months of fiscal 2024, cash provided by financing activities was impacted by net payments on our long-term debt of $105.5 million.

TOTAL DEBT AND CASH AND CASH EQUIVALENTS

(In thousands)		As of August 31		As of February 29
Debt Description (1)	Maturity Date	2024		2024
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	June 2024	—		300,000
Term loan (2)	October 2026	699,703		699,633
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	510,744		516,544
Non-recourse notes payable	Various dates through January 2031	17,095,229		16,866,972
Total debt (3)		$	18,705,676	$	18,783,149
Cash and cash equivalents		$	524,667	$	574,142

(1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

(2)    Borrowings accrue interest at variable rates based on SOFR, the federal funds rate, or the prime rate, depending on the type of borrowing.

(3)    Total debt excludes unamortized debt issuance costs. See Note 9 for additional information.

Borrowings under our $2.00 billion unsecured revolving credit facility are available for working capital and general corporate purposes, and the unused portion is fully available to us. The credit facility, term loan and senior note agreements contain representations and warranties, conditions and covenants.  If these requirements are not met, all amounts outstanding or otherwise owed could become due and payable immediately and other limitations could be placed on our ability to use any available borrowing capacity.  As of August 31, 2024, we were in compliance with these financial covenants.

See Note 9 for additional information on our revolving credit facility, term loans, senior notes and financing obligations.

CAF auto loans receivable are primarily funded through our warehouse facilities and asset-backed term funding transactions.  These non-recourse funding vehicles are structured to legally isolate the auto loans receivable, and we would not expect to be able to access the assets of our non-recourse funding vehicles, even in insolvency, receivership or conservatorship proceedings.  Similarly, the investors in the non-recourse notes payable have no recourse to our assets beyond the related

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receivables, the amounts on deposit in reserve accounts and the restricted cash from collections on auto loans receivable.  We do, however, continue to have the rights associated with the interest we retain in these non-recourse funding vehicles.

As of August 31, 2024, $13.36 billion and $3.74 billion of non-recourse notes payable were outstanding related to asset-backed term funding transactions and our warehouse facilities, respectively.  During the first six months of fiscal 2025, we funded a total of $3.63 billion in asset-backed term funding transactions.  As of August 31, 2024, we had $2.36 billion of unused capacity in our warehouse facilities.

We have periodically increased our warehouse facility limit over time, as our store base, sales and CAF loan originations have grown. See Note 9 for additional information on the warehouse facilities.

We generally repurchase the receivables funded through our warehouse facilities when we enter into an asset-backed term funding transaction. If our counterparties were to refuse to permit these repurchases it could impact our ability to execute on our funding program. Additionally, the agreements related to the warehouse facilities include various representations and warranties, as well as covenants and performance triggers related to events of default.  If these requirements are not met, we could be unable to continue to fund receivables through the warehouse facilities.  In addition, warehouse facility investors could charge us a higher rate of interest and could have us replaced as servicer.  Further, we could be required to deposit collections on the related receivables with the warehouse facility agents on a daily basis and deliver executed lockbox agreements to the warehouse facility agents.

The timing and amount of stock repurchases are determined based on stock price, market conditions, legal requirements and other factors.  Shares repurchased are deemed authorized but unissued shares of common stock.  As of August 31, 2024, a total of $4 billion of board authorizations for repurchases was outstanding, with no expiration date, of which $2.15 billion remained available for repurchase. See Note 10 for more information on share repurchase activity.

Fair Value Measurements

We recognize money market securities, mutual fund investments, certain equity investments and derivative instruments at fair value.  See Note 6 for more information on fair value measurements.

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FORWARD-LOOKING STATEMENTS

We caution readers that the statements contained in this report that are not statements of historical fact, including statements about our future business plans, operations, challenges, opportunities or prospects, including without limitation any statements or factors regarding expected operating capacity, sales, inventory, market share, financial targets, revenue, margins, expenses, liquidity, loan originations, capital expenditures, share repurchase plans, debt obligations or earnings, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  You can identify these forward-looking statements by the use of words such as “anticipate,” “believe,” “could,” “enable,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “positioned,” “predict,” “should,” “target,” “will” and other similar expressions, whether in the negative or affirmative.  Such forward-looking statements are based upon management’s current knowledge, expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially from anticipated results.  We disclaim any intent or obligation to update these statements.  Among the factors that could cause actual results and outcomes to differ materially from those contained in the forward-looking statements are the following:

•Changes in the competitive landscape and/or our failure to successfully adjust to such changes.

•Changes in general or regional U.S. economic conditions, including inflationary pressures, fluctuating interest rates and the potential impact of international events.

•Changes in the availability or cost of capital and working capital financing, including changes related to the asset-backed securitization market.

•Events that damage our reputation or harm the perception of the quality of our brand.

•Significant changes in prices of new and used vehicles.

•A reduction in the availability of or access to sources of inventory or a failure to expeditiously liquidate inventory.

•Our inability to realize the benefits associated with our omni-channel platform.

•Factors related to geographic and sales growth, including the inability to effectively manage our growth.

•Our inability to recruit, develop and retain associates and maintain positive associate relations.

•The loss of key associates from our store, regional or corporate management teams or a significant increase in labor costs.

•Changes in economic conditions or other factors that result in greater credit losses for CAF’s portfolio of auto loans receivable than anticipated.

•The failure or inability to realize the benefits associated with our strategic investments.

•Changes in consumer credit availability provided by our third-party finance providers.

•Changes in the availability of extended protection plan products from third-party providers.

•The performance of the third-party vendors we rely on for key components of our business.

•Adverse conditions affecting one or more automotive manufacturers, and manufacturer recalls.

•The inaccuracy of estimates and assumptions used in the preparation of our financial statements, or the effect of new accounting requirements or changes to U.S. generally accepted accounting principles.

•The failure or inability to adequately protect our intellectual property.

•The occurrence of severe weather events.

•The failure or inability to meet our environmental goals or satisfy related disclosure requirements.

•Factors related to the geographic concentration of our stores.

•Security breaches or other events that result in the misappropriation, loss or other unauthorized disclosure of confidential customer, associate or corporate information.

•The failure of or inability to sufficiently enhance key information systems.

•Factors related to the regulatory and legislative environment in which we operate.

•The effect of various litigation matters.

•The volatility in the market price for our common stock.

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For more details on factors that could affect expectations, see Part II, Item 1A, “Risk Factors” on Page 44 of this report, our Annual Report on Form 10-K for the fiscal year ended February 29, 2024, and our quarterly or current reports as filed with or furnished to the U.S. Securities and Exchange Commission (“SEC”).  Our filings are publicly available on our investor information home page at investors.carmax.com.  Requests for information may also be made to our Investor Relations Department by email to investor_relations@carmax.com or by calling 1-804-747-0422, ext. 7865.  We undertake no obligation to update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to our market risk since February 29, 2024.  For information on our exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” contained in our Annual Report on Form 10-K for the fiscal year ended February 29, 2024.

Item 4.    Controls and Procedures

Disclosure.  We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.  Our disclosure controls and procedures are also designed to ensure that this information is accumulated and communicated to management, including the chief executive officer (“CEO”) and the chief financial officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, with the participation of the CEO and CFO, we evaluated the effectiveness of our disclosure controls and procedures.  Based upon that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of the end of the period.

Internal Control over Financial Reporting. There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended August 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.    Legal Proceedings

For a discussion of certain legal proceedings, see Note 15 to the consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A.     Risk Factors

In connection with information set forth in this Form 10-Q, the factors discussed under “Risk Factors” in our Form 10-K for fiscal year ended February 29, 2024, should be considered.  These risks could materially and adversely affect our business, financial condition, and results of operations.  There have been no material changes to the factors discussed in our Form 10‑K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

On October 23, 2018, the board authorized the repurchase of up to $2 billion of our common stock with no expiration date. In April 2022, the board increased our share repurchase authorization by $2 billion. Purchases may be made in open market transactions, including through Rule 10b5-1 plans, or privately negotiated transactions at management’s discretion and the timing and amount of repurchases are determined based on stock price, market conditions, legal requirements and other factors. Shares repurchased are deemed authorized but unissued shares of common stock.

The following table provides information relating to the company’s repurchase of common stock for the second quarter of fiscal 2025. The table does not include transactions related to employee equity awards or exercise of employee stock options.

					Approximate
					Dollar Value
				Total Number	of Shares that
	Total Number	Average		of Shares Purchased	May Yet Be
	of Shares	Price Paid		as Part of Publicly	Purchased Under
Period	Purchased	per Share		Announced Program	the Program
June 1 - 30, 2024	369,820	$	71.12	369,820	$	2,229,880,174
July 1 - 31, 2024	505,500	$	78.84	505,500	$	2,190,028,185
August 1 - 31, 2024	501,338	$	79.59	501,338	$	2,150,124,263
Total	1,376,658			1,376,658

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Item 6.    Exhibits

10.1	CarMax, Inc. Executive Deferred Compensation Plan, as amended and restated, effective August 1, 2024, filed herewith. *
31.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a), filed herewith.
31.2	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a), filed herewith.
32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.
32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, filed herewith.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

* Indicates management contract, compensatory plan or arrangement of the company required to be filed as an exhibit.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CARMAX, INC.
By:	/s/  William D. Nash
	William D. Nash
	President and
	Chief Executive Officer
By:	/s/  Enrique N. Mayor-Mora
	Enrique N. Mayor-Mora
	Executive Vice President and
	Chief Financial Officer

September 27, 2024

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EX-10.1

EXHIBIT 10.1 CARMAX, INC. EXECUTIVE DEFERRED COMPENSATION PLAN Originally Effective January 1, 2011 As Amended and Restated August 1, 2024

CarMax, Inc. Executive Deferred Compensation Plan INTRODUCTION......................................................................................................................... 1 ARTICLE I .................................................................................................................................... 1 ARTICLE II ................................................................................................................................ 8 ARTICLE III .............................................................................................................................. 9 ARTICLE IV .............................................................................................................................. 12 ARTICLE V .............................................................................................................................. 13 ARTICLE VI ........................................................................................................................... 18 ARTICLE VII ........................................................................................................................... 19 ARTICLE VIII ............................................................................................................................ 21 ARTICLE IX ............................................................................................................................ 24 ARTICLE X ............................................................................................................................. 25 ARTICLE XI .............................................................................................................................. 26 ARTICLE XII ............................................................................................................................. 28

1 INTRODUCTION To attract and retain key employees, CarMax, Inc. hereby establishes the CarMax, Inc. Executive Deferred Compensation Plan, effective January 1, 2011. This Plan was amended and restated on August 1, 2024, to make certain changes related to the administration of the Plan. The purpose of the Plan is to provide Participants with an opportunity to defer receipt of a portion of their salary, bonus, and other specified compensation and to have those amounts paid at termination of employment or on a date or dates selected by the Participant. The Plan is unfunded for federal tax purposes and is intended to be an unfunded arrangement for Eligible Employees who are part of a select group of management or highly compensated Employees within the meaning of Sections 201(2), 301(a)(3), and 401(a)(l) of ERISA. The Plan is intended to meet the requirements of Section 409A and shall be implemented, administered and interpreted consistent with ERISA and Section 409A. ARTICLE I Definitions Capitalized terms used in this Plan shall have the meanings specified in this Article I. 1.1 Account. A bookkeeping account maintained by the Company to record the payment obligation of an Employer to a Participant as determined under the terms of the Plan. The Company may maintain an Account to record both the total obligation to a Participant and any sub-Accounts reflecting amounts payable at different times and in different forms. A Participant may have several sub- Accounts under the Plan, including the Retirement/Termination Account, one or more Specified Date Accounts and a Company Contribution Account. When the term "Account" is used without modification, it means all of the Participant’s sub- Accounts. 1.2 Beneficiary. The person or entity selected by the Participant who is to receive any benefits payable from the Plan on account of a Participant's death. If the Participant does not designate a Beneficiary, or if the Beneficiary predeceases the Participant, or is not in existence on the date of the Participant's death, then Beneficiary means the Participant's Surviving Spouse. If there is no Surviving Spouse, then Beneficiary means the executor or administrator of the Participant's estate. 1.3 Board. The Board of Directors of CarMax, Inc.

2 1.4 Change in Control. Any of the following events: (i) a change in the ownership of the Company, (ii) a change in the effective control of the Company, or (iii) a change in the ownership of a substantial portion of the assets of the Company. For purposes of this definition, a change in the ownership of the Company occurs on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. A change in the effective control of the Company occurs on the date any one person or group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30% or more of the total voting power of the stock, or the date a majority of the members of the Company's Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company's Board before the date of the appointment or election. A change in the ownership of a substantial portion of the assets of the Company occurs on the date on which any one person, or more than one person acting as a group (other than a person or group of persons that is related to the Company), acquires assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions, taking into account all such assets acquired during the 12-month period ending on the date of the most recent acquisition. An event constitutes a Change in Control with respect to a Participant only if the Participant's relationship to the Company satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(ii). The determination as to the occurrence of a Change in Control shall be based on objective facts and shall be made in accordance with the requirements of Section 409A. 1.5 Code. The Internal Revenue Code of 1986, as amended from time to time and as construed, interpreted and modified by regulations or rulings. 1.6 Committee. The Benefits Administrative Committee, which is a committee consisting of at least three members, as described in Article VIII, to be responsible for the general administration of the Plan. The Committee may delegate all or a part of its duties to one or more individuals or entities, and references herein to the Committee shall include such individuals and entities to the extent of such delegation. 1.7 Company. CarMax, Inc.

3 1.8 Company Contribution. A credit by the Employer to a Participant's Account in accordance with Article IV of the Plan. 1.9 Company Contribution Account. A sub-Account established by the Company to record Company Contributions credited to a Participant pursuant to Article IV of the Plan. 1.10 Company Contribution Benefit. The benefit payable to a Participant under the Plan in accordance with Plan Section 5.3. 1.11 Compensation. A Participant's base salary, monthly bonus, annual bonus, and such other cash remuneration for services rendered to an Employer by an Employee and approved by the Committee as Compensation that may be deferred under this Plan. Compensation shall not include any compensation that has been previously deferred under this Plan or any other arrangement subject to Section 409A. 1.12 Compensation Deferral Agreement. An agreement between a Participant and an Employer that specifies: (i) the amount of each component of Compensation that the Participant has elected to defer to the Plan in accordance with Article III, and (ii) the Payment Schedule applicable to the Account or one or more sub-Accounts. The Committee may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise permitted, a Participant may defer up to 75% of his annual base salary and monthly bonus for a Plan Year and up to 90% of Performance-Based Compensation; provided, however, that such deferrals must be designated in whole percentages. A Compensation Deferral Agreement may also specify the Participant's investment allocation as described in Plan Section 7.4. 1.13 Death Benefit. The benefit payable under the Plan to a Participant's Beneficiary(ies) upon the Participant's death as provided in Plan Section 5.4. 1.14 Deferral. A credit to a Participant's Account that records the portion of the Compensation that the Participant has elected to defer in accordance with Article III. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes investment gains and losses attributable to such Deferrals, as described in Plan Section 7.2. A Deferral shall be calculated with respect to the gross cash Compensation payable to the Participant prior to any deductions or withholdings. However, a Deferral shall be reduced as necessary so that following deduction or withholding from a Participant's gross cash Compensation of all required income and employment taxes, other employee benefit deductions, and other deductions required by law, the Deferral does not exceed 100% of the Participant's remaining cash Compensation.

4 Changes to payroll withholdings that affect the amount of Compensation being deferred to the Plan shall be allowed only to the extent permissible under Section 409A. 1.15 Effective Date. The Effective Date of the Plan is January 1, 2011. A Participant may make elections prior to the Effective Date to the extent necessary to comply with Section 409A with regard to compensation payable in 2011. 1.16 Eligible Employee. A member of a "select group of management or highly compensated employees" of an Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(l) of ERISA, and who is selected by the Committee to be an Eligible Employee. 1.17 Employee. Any person employed by an Employer as a common-law employee on the Employer's U.S. payroll. It is expressly intended that persons not employed as common law employees on an Employer's U.S. payroll are to be excluded from participation in the Plan, even if a court or administrative agency determines that such individuals are common law employees. The term "Employee" shall not include independent contractors or leased employees within the meaning of Code section 4 l 4(n)(2). 1.18 Employer. The Company and any Related Company, unless the Company determines by action of the Committee that the Related Company shall not be an Employer for purposes of this Plan. 1.19 ERISA. The Employee Retirement Income Security Act of 1974, as amended from time to time and as construed, interpreted and modified by regulations or rulings. 1.20 Key Employee. An Employee who, as of the date of his Separation from Service, meets the requirements of Code section 416(i)(l)(A)(i), (ii), or (iii) (applied in accordance with applicable regulations thereunder and without regard to Code section 416(i)(5)) at any time during the 12-month period ending on a given December 31. Such Employee shall be treated as a Key Employee for the entire 12- month period beginning on the next following April 1, provided that the Company is a "public company" (as determined under Section 409A) on the date of the Participant's Separation from Service. The December 31 and April 1 dates in this definition may be changed by the Committee, but only in accordance with the applicable requirements imposed by Section 409A. 1.21 Participant. An Eligible Employee who commences participation in the Plan in accordance with Article II, or a former Eligible Employee who previously commenced participation in the Plan in accordance with Article II and whose Account balance is greater than zero dollars ($0.00).

5 1.22 Payment Date. The date on which a distribution under the Plan is scheduled to be paid, and the date from which extensions and advanced election time periods for modifications under Article VI are measured. In the event that the Payment Date under the Plan is determined by a range of days, such as "within 60 days," or not provided under the Plan, the Payment Date shall be the date of the triggering event or, if later, the first date that payment could have been made. 1.23 Payment Schedule. The Payment Date or Dates and the form in which payment will be made. 1.24 Performance-Based Compensation. Compensation where the amount thereof, or entitlement thereto, is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by not later than 90 days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. The determination of whether Compensation qualifies as "Performance-Based Compensation" will be made in accordance with Treasury Regulation Section l.409A-l(e) and applicable guidance. 1.25 Plan. The CarMax, Inc. Executive Deferred Compensation Plan as set forth herein and as amended from time to time. The term "Plan Section" shall refer to a section of this Plan. 1.26 Plan Asset Committee. The Chief Financial Officer of the Company shall appoint at least three persons to serve on the Plan Asset Committee, to have the rights and duties described in Articles VII, VIII and X. Any member of the Plan Asset Committee may resign by delivering his or her written resignation to the Chief Financial Officer prior to the effective date of such resignation. In addition, if a member of the Plan Asset Committee is an employee at the time of his or her appointment, he or she will automatically cease to be a member of the Plan Asset Committee when his or her employment with the Company terminates. The Chief Financial Officer may remove any member of the Plan Asset Committee by so notifying the member and the other Plan Asset Committee members in writing. In the event a member of the Plan Asset Committee dies, resigns or is removed (automatically or by the Chief Financial Officer), the Chief Financial Officer shall have the authority to appoint a successor member. The Plan Asset Committee shall continue to act with full power until the vacancy is filled. The Plan Asset Committee may delegate all or a part of its duties to one or more individuals or entities, and references herein to the Plan Asset Committee shall include such individuals and entities to the extent of such delegation.

6 1.27 Plan Year. The calendar year. 1.28 Related Company. Any corporation or business organization that is: (i) under common control with the Company (as determined under Code section 414(b) or (c)) or controlled by the Company; (ii) a member of an affiliated service group with the Company (as determined under Code section 414(m)); or (iii) an entity required to be aggregated pursuant to Code section 414(o) and the regulations thereunder. 1.29 Retirement/Termination Account. A sub-Account established by the Company to record the amounts payable to a Participant upon Separation from Service. Unless otherwise determined by the Committee, a Participant may maintain no more than one Retirement/Termination Account. 1.30 Section 409A. Section 409A of the Code, and regulations and other guidance issued thereunder by the Treasury Department and Internal Revenue Service. 1.31 Separation from Service. The date that the Participant dies, retires or otherwise experiences a termination of employment with the Employer. Whether a Separation from Service has occurred, including as a result of military leave, sick leave or other bona fide leave of absence, shall be determined in accordance with Section 409A. Except in the case of an Employee on an approved leave of absence as determined under Section 409A, an Employee is deemed to have incurred a Separation from Service on a date if the Employer and the Employee reasonably anticipate that the level of services to be performed by the Employee after that date would be reduced to 35% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period of employment, if less than 36 months), disregarding periods during which the Employee was on an approved leave of absence. 1.32 Specified Date Account. A sub-Account or sub-Accounts established by the Company to record the amounts payable at a future date as specified in the Participant's Compensation Deferral Agreement. Unless otherwise determined by the Committee, a Participant may maintain no more than five Specified Date Accounts. 1.33 Specified Date Benefit. The benefit payable to a Participant under the Plan in accordance with Plan Section 5.2. 1.34 Spouse or Surviving Spouse. In accordance with Revenue Ruling 2013-17 and Notice 2014-19, for all Plan purposes, a Spouse includes any spouse of a legal marriage, including a same-sex spouse, that is validly entered into in a state whose laws authorize the marriage of two individuals of the same sex, even if the individuals are domiciled in a state that does not recognize the validity of same-sex marriages, on

7 the date of the Participant's death or the date benefits are paid, whichever is earlier. However, individuals (whether part of an opposite-sex or same-sex couple) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state are not treated as legally married. For this purpose, the term "state" means any domestic or foreign jurisdiction having the legal authority to sanction marriages. Prior to June 26, 2013, the definition of Spouse complied with the prohibition on same-sex spouses imposed by the Defense of Marriage Act, P.L. 104- 199, as adopted on September 21, 1996. 1.35 Termination Benefit. The benefit payable to a Participant under the Plan in accordance with Plan Section 5.1 following the Participant's Separation from Service for reasons other than the death of the Participant. 1.36 Unforeseeable Emergency. A severe financial hardship to the Participant resulting from: (i) an illness or accident of the Participant, the Participant's Spouse, the Participant's dependent (as defined in Code section 152, without regard to Code section 152(b)(l), (b)(2), and (d)(l)(B)), or a Beneficiary; (ii) loss of the Participant's property due to casualty; or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency may be limited by the Committee. 1.37 Valuation Date. Any day that the New York Stock Exchange is open for business.

8 ARTICLE II Eligibility and Participation 2.1 Eligibility and Participation. Only Eligible Employees may become Participants in the Plan. An Eligible Employee becomes a Participant on the date on which the initial Deferral election made by the Eligible Employee becomes irrevocable, as described in Plan Section 3.2. 2.2 Duration. A Participant shall be eligible to defer Compensation for as long as such Participant remains an Eligible Employee. (a) Loss of Eligible Employee Status. A Participant who is no longer an Eligible Employee but has not incurred a Separation from Service may not elect to defer Compensation under the Plan beyond the Plan Year in which he became ineligible but may otherwise exercise all of the rights of a Participant under the Plan with respect to his Account; provided, however, that such Participant must continue any previously elected Deferrals through the end of the Plan Year for which such elected Deferrals previously became irrevocable, in accordance with Plan Section 3.1(c). (b) Separation from Service. Upon a Separation from Service, a Participant shall remain a Participant as long as his Account balance is greater than zero dollars ($0.00), and during such time may continue to make allocation elections as provided in Plan Section 7.4. (c) Cessation of Participation. An individual shall cease being a Participant in the Plan when all benefits under the Plan to which he is entitled have been paid.

9 ARTICLE III Deferrals 3.1 Deferral Elections. (a) A Participant may elect to make a Deferral by submitting a Compensation Deferral Agreement during the enrollment periods established by the Committee in accordance with Plan Section 3.2. A Compensation Deferral Agreement that is not timely submitted with respect to a service period or component of Compensation shall be void and shall have no effect with respect to such service period or Compensation. The Committee may extend an enrollment period, so long as the election becomes irrevocable as of the date specified under the rules of Plan Section 3.2 and complies with the requirements of Section 409A. (b) The Participant shall specify on his Compensation Deferral Agreement the amount of Deferrals and whether to allocate Deferrals to a Retirement/Termination Account or to one or more Specified Date Accounts. If no Specified Date Account allocation designation is made, Deferrals shall be allocated to the Retirement/ Termination Account. A Participant may also specify in his Compensation Deferral Agreement the Payment Schedules applicable to his Plan Account and any sub­ Accounts. If a Payment Schedule is not specified in a Compensation Deferral Agreement, payments shall be made in accordance with Plan Section 5.1(c) or 5.2(c), as applicable. (c) A Participant's Deferral elections under this Plan Section 3.1 shall continue in force until a new election is made or, in the event the Participant ceases to be an Eligible Employee, until the end of the Plan Year for which such Deferral elections previously became irrevocable. A Participant whose Deferrals are cancelled in accordance with Plan Section 3.7 will be required to submit a new Compensation Deferral Agreement under this Article III in order to recommence Deferrals under the Plan. 3.2 Timing Requirements for Compensation Deferral Agreements. (a) First Year of Eligibility. For individuals who become Eligible Employees after August 27, 2010, in the first year in which such an Eligible Employee becomes eligible to participate in the Plan, such Eligible Employee has up to 30 days following notification by the Committee of his initial eligibility to submit a Compensation Deferral Agreement with respect to Compensation to be earned during such year. The Compensation Deferral Agreement described in this Plan Section 3.2(a) becomes irrevocable upon the end of such 30-day period.

10 Subject to Plan Section 3.2(c) with respect to Performance-Based Compensation, a Compensation Deferral Agreement submitted to the Company under this Plan Section 3.2(a) applies to Compensation earned on and after the date the Compensation Deferral Agreement becomes irrevocable, i.e., beginning with Compensation earned during the first full payroll period that begins after the date the Compensation Deferral Agreement becomes irrevocable. (b) Annual Election. Except as otherwise provided in this Plan Section 3.2, a Participant may defer Compensation by submitting a Compensation Deferral Agreement within the enrollment period designated by the Committee, but no later than 11:59 p.m. EST on December 31 of the year prior to the year in which the Compensation to be deferred is earned. Base salary payable in a calendar year (the "subsequent year") solely for services performed during the final regular payroll period of the Company containing December 31 of the prior calendar year is treated as Compensation earned in such subsequent year, in accordance with Treasury Regulation Section l .409A- 2(a)(B). A Compensation Deferral Agreement described in this Plan Section 3.2(b) becomes irrevocable with respect to such Compensation at 11:59 p.m. EST on December 31 of the year immediately preceding the year in which such Compensation is, or begins to be, earned. (c) Performance-Based Compensation. A Participant may submit a Compensation Deferral Agreement with respect to Performance-Based Compensation no later than the date that is six months before the end of the performance period, provided that: (i) the Participant performs services for the Employer continuously from the later of the beginning of(a) the performance period or (b) the date the criteria are established, through the date the Compensation Deferral Agreement becomes irrevocable; and (ii) the Performance-Based Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement becomes irrevocable. A Compensation Deferral Agreement becomes irrevocable with respect to Performance-Based Compensation at 11:59 p.m. EST on the latest date for filing such election.

11 Any election to defer Performance-Based Compensation that is made in accordance with this Plan Section 3.2(c) and that becomes payable prior to the satisfaction of the performance criteria as a result of the Participant's death or upon a change in control (as defined in Treasury Regulation Section 1.409A- 3(i)(5)) will be void. 3.3 Allocation of Deferrals. A Compensation Deferral Agreement may allocate Deferrals to one or more Specified Date Accounts and/or to the Retirement/Termination Account. 3.4 Conditions on Specified Date Accounts. Effective for Compensation Deferral Agreements submitted after August 1, 2024, the Committee may, in its sole and absolute discretion, require a minimum deferral period prior to receiving distributions from a Specified Date Account (for example, the third Plan Year following the year Compensation is first allocated to such accounts). 3.5 Deductions from Pay. The Committee has the authority to determine the payroll practices under which any component of Compensation subject to a Compensation Deferral Agreement will be deducted from a Participant's Compensation. 3.6 Vesting. Deferrals shall be 100% vested at all times. 3.7 Cancellation of Deferrals. The Committee may cancel a Participant's Deferrals: (i) for the balance of the Plan Year in which an Unforeseeable Emergency occurs, or (ii) if the Participant receives a hardship distribution under the Employer's qualified 401(k) plan, through the end of the Plan Year in which the six month anniversary of the hardship distribution falls.

12 ARTICLE IV Company Contributions 4.1 Company Contribution. Effective as of the last day of each Plan Year or such other time as is determined by the Committee, the Company may, in its sole and absolute discretion, credit a Participant's Company Contribution Account with the following amounts, if any, for the Plan Year: (a) a Company matching contribution equal to the additional amounts the Participant would have received as matching contributions under the CarMax, Inc. Retirement Savings Plan and CarMax, Inc. Retirement Restoration Plan for such Plan Year had he not deferred Compensation into this Plan. The Company matching contribution described in this Plan Section 4.1(i) shall be determined based on the percentage(s) used for the Company matching contributions for the Participant under the CarMax, Inc. Retirement Savings Plan and CarMax, Inc. Retirement Restoration Plan, respectively, over such Plan Year. (b) a Company retirement contribution equal to the additional amounts the Participant would have received as discretionary retirement contributions under the CarMax, Inc. Retirement Savings Plan and CarMax, Inc. Retirement Restoration Plan for such Plan Year had he not deferred Compensation into this Plan. 4.2 Vesting. Company Contributions described in Plan Section 4.1 above, and the investment gains and losses thereon, shall vest in accordance with the vesting schedule(s) applicable to Company matching contributions under the CarMax, Inc. Retirement Savings Plan. All Company Contributions shall become 100% vested upon the occurrence of the earliest of: (i) the death of the Participant while the Participant is an Employee, or (ii) a Change in Control. The portion of a Participant’s Account that remains unvested upon his Separation from Service after the application of the terms of this Plan Section 4.2 shall be forfeited.

13 ARTICLE V Benefits 5.1 Termination Benefit. Upon the Participant's Separation from Service other than due to death, he shall be entitled to a Termination Benefit. The Participant's Termination Benefit shall be equal to the value of the Participant's Retirement/Termination Account. (a) Amount of Termination Benefit. The Termination Benefit shall be based on the value(s) of the Retirement/Termination Account as of the later of: (i) the end of the month in which Separation from Service occurs; (ii) in the event of a lump sum distribution subsequent to Separation from Service under Plan Section 5.1(b)(ii), the end of the month immediately preceding the month in which the lump sum distribution is to be made; or (iii) in the event of installment payments, the end of the month immediately preceding the month in which each installment payment is made. (b) Payment Date a/Termination Benefit. Subject to Plan Section 5.7, the Payment Date of the Termination Benefit shall be: (i) the fifteenth day of the month following the month in which Separation from Service occurs, or as soon as administratively practicable thereafter; or (ii) such other objectively determinable date with respect to a Separation from Service designated by the Participant in the Compensation Deferral Agreement and permitted by the Committee; provided, however, that no Participant may designate an initial Payment Date for a Termination Benefit that is later than five years after the Participant's Separation from Service. Notwithstanding anything in this Plan Section 5.1(b) to the contrary, with respect to a Participant who is a Key Employee as of the date he incurs a Separation from Service, the Payment Date shall be the later of the date designated in the Compensation Deferral Agreement or the first day of the seventh month following the month in which Separation from Service occurs. With respect to such Key Employee, if the Termination Benefit is paid in the form of installments, any subsequent installment payments to a Key Employee will be paid on the anniversary of the date the initial installment payment was made. (c) Form of Payment a/Termination Benefit. Subject to Plan Section 5.7, a Participant who is entitled to receive a Termination Benefit shall receive payment of such benefit in a single lump sum, unless the Participant elects on his applicable Compensation Deferral Agreement to have the Retirement /Termination Account paid in one of the following alternative forms of payment, in which case the Participant shall receive his Termination Benefit in accordance with his election: (i) substantially

14 equal annual installments over a period of two to ten years, as elected by the Participant, or (ii) a lump sum payment of a percentage of the balance in the Retirement/Termination Account, with the balance paid in substantially equal annual installments over a period of two to ten years, as elected by the Participant. 5.2 Specified Date Benefit. If the Participant has established one or more Specified Date Accounts, he shall be entitled to a Specified Date Benefit with respect to each such Specified Date Account. (a) Amount of Specified Date Benefit. The Specified Date Benefit shall be equal to the value(s) of the Specified Date Account as of the end of the month(s) immediately preceding the month(s) designated by the Participant on the applicable Compensation Deferral Agreement. (b) Payment Date of Specified Date Benefit. The Payment Date for a Specified Date Benefit is the fifteenth day of the month designated by the Participant. (c) Form of Payment of Specified Date Benefit. The Specified Date Benefit shall be paid in a single lump sum, unless the Participant elects on the applicable Compensation Deferral Agreement to have the Specified Date Benefit paid in substantially equal annual installments over a period of two to five years, as elected by the Participant, in which case the Participant shall receive his Specified Date Benefit in accordance with his election. 5.3 Company Contribution Benefit. Upon the Participant's Separation from Service, other than due to death, the Participant shall be entitled to a Company Contribution Benefit, if any. (a) Amount of Company Contribution Benefit. The Company Contribution Benefit shall be equal to the vested portion of the Company Contribution Account, based on the value of that Account as of the end of the month in which a Separation from Service occurs. (b) Payment Date of Company Contribution Benefit. The Payment Date of the Company Contribution Benefit shall be the fifteenth day of the month following the month in which Separation from Service occurs, or as soon as administratively practicable thereafter. However, with respect to a Participant who is a Key Employee as of the date such Participant incurs a Separation from Service, the Payment Date shall be the first day of the

15 seventh month following the month in which Separation from Service occurs. (c) Form of Payment of Company Contribution Benefit. A Participant who is entitled to receive a Company Contribution Benefit shall receive payment of such benefit in a single lump sum. 5.4 Death Benefit. In the event of the Participant's death before all benefits under the Plan have been paid, his Beneficiary shall be entitled to a Death Benefit. (a) Amount of Death Benefit. The Death Benefit shall be equal to the value of the Retirement/Termination Account, all Specified Date Accounts, and the vested portion of the Company Contribution Account. The Death Benefit shall be based on the value of these accounts as of the date of death. (b) Payment Date of Death Benefit. The Payment Date for a Death Benefit shall be the fifteenth day of the month following the month in which the Participant's death occurred, or as soon as administratively practicable thereafter. (c) Form of Payment of Death Benefit. A Participant's Beneficiary will receive payment of the Participant's Death Benefit in a single lump sum. 5.5 Unforeseeable Emergency Payments. A Participant who experiences an Unforeseeable Emergency may submit a written request to the Committee to receive payment of all or any portion of his Retirement/Termination Account and Specified Date Accounts. Whether a Participant is faced with an Unforeseeable Emergency permitting an emergency payment shall be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of an Unforeseeable Emergency may not be made to the extent that such emergency is or may be reimbursed: (i) through insurance or otherwise; (ii) by liquidation of the Participant's assets, to the extent such liquidation would not cause severe financial hardship; or (iii) by cessation of Deferrals under this Plan. If an emergency payment is approved by the Committee, the amount of the payment shall not exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of any cancellation of Deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted first from the Participant's Retirement/Termination Account until depleted and then from the Specified Date Accounts, beginning with the Specified Date Account with the latest payment commencement date. Emergency payments shall be paid in a single lump

16 sum within the 90-day period following the date the payment is determined by the Committee to be on account of an Unforeseeable Emergency. 5.6 Change in Control. Notwithstanding any Compensation Deferral Agreement or any other provisions of this Plan, a Participant will receive his Termination Benefit, Specified Date Benefit(s) and Company Contribution Benefit in a single lump sum payment if Separation from Service occurs within 24 months following a Change in Control. This lump sum payment shall be based on the value of the Participant 's Account as of the end of the month in which Separation from Service occurs. The Payment Date of this lump sum payment shall be the fifteenth day of the month following the month in which Separation from Service occurs, or as soon as administratively practicable thereafter; provided, however, that with respect to a Participant who is a Key Employee as of the date he incurs a Separation from Service, the Payment Date shall be the first day of the seventh month following the month in which the Separation of Service occurs. 5.7 Small Account Balance. Notwithstanding any Compensation Deferral Agreement or other provisions of this Plan, a Participant's Retirement/Termination Account will be paid in a single lump sum within 60 days following Separation from Service if, upon the Participant's Separation from Service, the total value of the Retirement/Termination Account is not greater than $50,000; provided, however, that if such Participant is a Key Employee, the payment date for this single lump sum shall be the first day of the seventh month following the month in which Separation from Service occurs. 5.8 Rules Applicable to Installment Payments. If a Payment Schedule specifies annual installment payments, such payments will be made beginning as of the payment commencement date for such installments and shall continue on each anniversary thereof until the number of installment payments specified in the Payment Schedule has been paid. The amount of each installment payment shall be determined by dividing the value of the Account or applicable sub-Account as of each Valuation Date immediately preceding the Payment Date by the remaining number of installment payments. For purposes of Article VI, installment payments will be treated as a single payment. If a Participant elects to receive a lump sum equal to less than I 00% of the Retirement/Termination Account, as described in Plan Section 5.l(c), the payment commencement date for the installment form of payment will be the first anniversary of the payment of the lump sum. 5.9 Acceleration of or Delay in Payments. The Committee, in its sole and absolute discretion, may accelerate the time or alter the form of payment of a benefit owed to the Participant hereunder, provided such acceleration is permitted under Treasury Regulation Section l.409A-3(i)(4). The Committee may also, in its sole and

17 absolute discretion, delay the time for payment of a benefit owed to the Participant hereunder, to the extent permitted under Treasury Regulation Section l.409A- 2(b)(7). If the Plan receives a domestic relations order (within the meaning of Code section 414(p)(l)(B)) directing that all or a portion of a Participant 's Account be paid to an "alternate payee," any amounts to be paid to the alternate payee shall be paid in a single lump sum as soon as administratively practicable following the receipt of the executed order. 5.10 Payments Treated As Made Upon the Payment Date. Payments are treated as having been made on the Payment Date if they are made at a later date within the same taxable year of the Participant or, if later, by the fifteenth day of the third calendar month following the Payment Date, provided that the timing of such payment satisfies Treasury Regulation Section l.409A-3(d).

18 ARTICLE VI Modifications to Payment Schedules 6.1 Participant's Right to Modify. A Participant may modify any or all of the Payment Schedules set forth in a Compensation Deferral Agreement, consistent with the permissible Payment Schedules available under the Plan, provided such modification complies with the requirements of this Article VI. 6.2 Time of Modification Election. The date on which a modification election is submitted must be at least 12 months prior to the date on which payment is scheduled to commence under the Payment Schedule in effect prior to the modification. Any modification election that is not submitted within such time shall be void. 6.3 Date of Payment under Modified Payment Schedule. Except with respect to modifications that relate to the payment of a Death Benefit, the modified Payment Date must be no earlier than five years after the original Payment Date or, if later, the modified Payment Date for payments previously modified. Under no circumstances may a modification election result in an acceleration of payments in violation of Section 409A. 6.4 Effective Date. A modification election submitted in accordance with this Article VI is irrevocable upon receipt by the Committee. 6.5 Effect on Accounts. An election to modify a Payment Schedule is specific to the Account, sub-Account, or payment event to which it applies, and shall not be construed to affect the Payment Schedules of any other Account or sub-Accounts.

19 ARTICLE VII Valuation of Accounts; Investments 7.1. Valuation. Deferrals shall be credited to the appropriate Accounts on the date such Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Company Contributions shall be credited to the Company Contribution Account in accordance with Plan Section 4.1. Valuation of Accounts shall be performed under procedures approved by the Committee. 7.2. Adjustment for Earnings. Each Account will be adjusted to reflect investment gains or losses on each Valuation Date. Adjustments shall reflect the net earnings, gains, losses, expenses, appreciation and depreciation associated with an investment option for each portion of the Account allocated to such option pursuant to Plan Section 7.4. 7.3. Investment Options. Investment options will be determined by the Plan Asset Committee. The Plan Asset Committee, in its sole and absolute discretion, may add or remove investment options from the Plan menu from time to time. 7.4. Investment Allocations. A Participant's investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall an Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant's investment allocation. A Participant's investment allocation shall be used solely for purposes of adjusting the value of a Participant's Account. A Participant shall specify an investment allocation for each of his sub-Accounts in accordance with procedures established by the Committee. Allocation among the investment options must be designated in whole percentages. The Participant's investment allocation will become effective as soon as administratively practicable. A Participant may change an investment allocation at any time, both with respect to future credits to the Plan and with respect to existing Account or sub- Account balances, in accordance with procedures adopted by the Committee. Changes shall become effective as soon as administratively practicable. 7.5. Unallocated Deferrals and Accounts. If the Participant fails to make an investment allocation with respect to an Account or sub-Account, such Account or sub-Account shall be invested in an investment option, a primary objective of

20 which is the preservation of capital, as determined by the Plan Asset Committee. The Plan Asset Committee shall have no responsibility to any Participant or anyone claiming a benefit through a Participant if the Participant fails to make an investment allocation or to change any investment allocation.

21 ARTICLE VIII Administration 8.1 Administrator. This Plan shall be administered by the Committee. The Committee shall be composed of not less than three members, including the Chief Financial Officer and the SVP, Chief Human Resources Officer of the Company, or in each case the functional equivalent thereof, and such additional members as are appointed from time to time by the SVP, Chief Human Resources Officer. Any member of the Committee may resign by delivering his or her written resignation to the SVP, Chief Human Resources Officer prior to the effective date of such resignation. In addition, if a member of the Committee is an Employee at the time of his or her appointment, he or she will automatically cease to be a member of the Committee when his or her employment with the Company terminates. The SVP, Chief Human Resources Officer may remove any member of the Committee by notifying the member and the other Committee members in writing. In the event a member of the Committee dies, resigns or is removed (automatically or by the SVP, Chief Human Resources Officer), the SVP, Chief Human Resources Officer shall have the authority to appoint a successor member. The Committee shall continue to act with full power until the vacancy is filled. 8.2 Powers of the Committee. Except where responsibilities have been allocated or delegated to another person or entity, including the Plan Asset Committee, the Committee will have full and exclusive power and discretion to administer the Plan, including as to all of its details, including the power to decide Plan benefit claims. For the purpose of administering the Plan, the Committee's power will include, but will not be limited to, the following authority: (a) to make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan or as required to comply with applicable law; (b) to interpret the Plan, its interpretation thereof in good faith to be final and conclusive as to any current or former Employee, Participant, or Beneficiary; (c) to decide all questions concerning the Plan, including whether a payment of Plan benefits is due; (d) to compute the amount of benefits payable to any current or former Employee, Participant, or Beneficiary in accordance with the Plan, and to determine the person or persons to whom such benefits will be paid; (e) to authorize the payment of Plan benefits;

22 (f) to keep such records and submit such filings, elections, applications, returns or other documents or forms as may be required under the Code and applicable regulations, or under state or local law and regulations; and (g) to appoint such agents, counsel, accountants, consultants and record keepers as may be required to assist in administering the Plan. (h) from time to time and in its discretion, to establish rules for its operations. 8.3 Withholding. An Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from the Participant's Compensation that has not been deferred to the Plan. 8.4 Indemnification. The Company shall indemnify the Committee, the Plan Asset Committee, their respective members, and each other Employee who is involved in the administration of the Plan against all costs, expenses and liabilities, including attorneys' fees, incurred in connection with any action, suit or proceeding that alleges, arises out of, or relates in any way to any good faith act or failure to act in connection with, or related in any way to, the Plan. Promptly after receipt by an indemnified party of notice of the commencement of any such action, suit or proceeding, the indemnified party shall notify the Company. The Company shall be entitled to participate at its own expense in the defense or to assume the defense of any indemnified party. If the Company elects to assume the defense, counsel chosen by the Company shall conduct the defense, and the indemnified party shall bear the fees and expenses of any additional counsel retained by him. 8.5 Binding Decisions or Actions. The decision or action of the Committee or the Plan Asset Committee in respect of any question within the scope of their respective duties arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan. 8.6 Administrative Costs. All reasonable costs incurred in the administration of the Plan shall be paid by the Company. 8.7 Discretion. In discharging the duties assigned to them under the Plan, each of the Company, the Committee, the Plan Asset Committee, and each other individual or entity authorized by the Committee or the Plan Asset Committee (each, an "Authorized Person") has the discretion to interpret the Plan; adopt, amend and rescind rules and regulations pertaining to its duties under the Plan; and to make all other determinations necessary or advisable for the discharge of its duties under the

23 Plan. The discretionary authority of an Authorized Person is absolute and exclusive. The express grant in the Plan of any specific power to an Authorized Person with respect to any duty assigned to it under the Plan must not be construed as limiting any power or authority of such Authorized Person to discharge its duties. A decision of an Authorized Person is final and conclusive in any subsequent action, suit, or proceeding unless it is established that the decision constituted an abuse of discretion. No Plan benefits shall be paid to any Participant, Beneficiary or other person unless an Authorized Person shall determine, in its sole and absolute discretion, that such benefits are due.

24 ARTICLE IX Amendment and Termination 9.1 Amendment and Termination. The Company may at any time amend the Plan or may terminate the Plan as provided in this Article IX. The Company may at any time determine that a Related Company shall no longer participate (or shall again participate) in the Plan. 9.2 Amendments. The Company shall have the right by action of the Committee to amend the Plan from time to time (a) as necessary to ensure the Plan meets requirements under the Code; or (b) to implement changes in Plan design that are not financially material to the Company or the Company's shareholders; provided, however, that no amendment shall reduce the vested Account balances of any Participant accrued as of the date of such amendment (as if the Participant had incurred a voluntary Separation from Service on such date) or reduce any rights of a Participant under the Plan with respect to Deferrals made prior to the date of such amendment without the consent of the Participant. Any amendment to the Plan that is financially material to the Company or the Company's shareholders must be approved by the Board. 9.3 Termination. The Company, by action taken by the Board, may terminate the Plan and pay Participants and Beneficiaries their Account balances in a single lump sum at any time, to the extent of and in accordance with Treasury Regulation Section l.409A-3(j)(4)(ix). If an Employer's participation in the Plan is terminated, the benefits of affected Employees shall nevertheless be paid at the time provided in Article V. 9.4 Accounts Taxable Under Section 409A. The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Section 409A.

25 ARTICLE X Informal Funding 10.1 General Assets. Obligations established under the terms of the Plan may be satisfied from the general funds of an Employer, or a trust described in this Article X. No Participant, Spouse, Beneficiary or other person shall have any right, title or interest whatsoever in assets of an Employer pursuant to this Plan. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between an Employer and any current or former Employee, Participant, Spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Employer. 10.2 Rabbi Trust. The Company or an Employer may, in its sole and absolute discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan. Payments under the Plan may be paid from the assets of an Employer or from the assets of any such rabbi trust. Payment from any source shall reduce the obligation owed to the Participant or Beneficiary under the Plan. In the event the Company or an Employer establishes a grantor trust, as set forth above, and such grantor trust contains a funding requirement, each Participant whose Plan benefits may be paid from such trust shall be an intended beneficiary of, and shall be entitled to enforce, such requirement as if such person had been a party to such trust. 10.3 Trustee. In connection with any trust established pursuant to Plan Section 10.2, the Plan Asset Committee's power will include, but will not be limited to, the following authority: (a) to establish investment guidelines; (b) to receive and issue reports on the performance of the trust assets; (c) to appoint and remove a trustee or trustees (including one or more successor trustees) with respect to a portion of or all of the assets of a trust, including the power to enter into (and amend or terminate) any agreement or agreements with a bank, trust company, or other institution (including, in the Plan Asset Committee's discretion, the power to maintain (and amend or terminate) any agreement entered into by the Company or an Employer on behalf of the Plan) to hold and invest trust assets; (d) to direct any trustee with respect to the investment and management (including any voting rights) of the assets in a trust; and (e) to appoint, monitor, and remove one or more investment managers.

26 ARTICLE XI Claims 11.1 Right to File Claim. A Participant, Beneficiary or former Participant (each a "Claimant") shall be entitled to file with the Committee's delegate a claim for benefits under the Plan. The claim must be in writing. Unless another individual or entity is named by the Committee to hear claims for benefits, the Committee's delegate shall be the Company's Director of Benefits or the Plan's recordkeeper. 11.2 Denial of Claim. If the claim is denied by the Committee's delegate in whole or in part, the Claimant shall be furnished within 90 days after the receipt of the claim by the Committee's delegate (or within 180 days after such receipt if special circumstances require an extension of time) a written notice of denial of the claim containing the following: (a) the specific reason or reasons for the denial; (b) specific reference to the Plan provisions on which the denial is based; (c) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and (d) an explanation of the procedure for review of the denied or partially denied claim (set forth below) and applicable time limits, including a statement of the Claimant's right to bring a civil action under ERISA section 502(a) following an adverse benefit determination on review. 11.3 Claims Review Procedure. Upon denial of a claim, in whole or in part, the Claimant or his duly authorized representative will have the right to submit a request to the Committee for a full and fair review of the denied claim by filing a written notice of appeal with the Committee. The notice of appeal must be filed within 60 days of the receipt by the Claimant of written notice of the denial of the claim. The Claimant or his representative will have, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits and may submit issues and comments in writing. The Committee will take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial decision on the claim. If the Claimant fails to file an appeal within 60 days of the receipt by the Claimant of the denial of the claim, the claim will be deemed abandoned and the Claimant precluded from reasserting it. If the Claimant does file an appeal, his request must include a description of the issues and evidence he deems relevant.

27 11.4 Decision on Review. The Committee will review and decide whether an appeal is approved or denied. A written notice of the decision will be furnished to the Claimant within 60 days of the date on which the appeal is received by the Committee. If special circumstances require a longer period, the Claimant will be notified in writing, prior to the expiration of the 60-day period, of the reasons for an extension of time and the date by which a decision is expected; provided, however, that no extensions will be permitted beyond 60 days after the expiration of the initial 60-day period. An appeal is considered approved only if its approval is communicated in writing to the Claimant. If an appeal is denied, in whole or in part, the written notice will clearly set forth: (a) the specific reason or reasons for the adverse determination; (b) specific reference to the Plan provisions on which the adverse determination is based; (c) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits; and (d) a statement of the Claimant's right to bring an action under BRISA section 502(a). 11.5 Legal Action. A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his administrative remedies under such claims procedures. Any such legal action must be commenced within one year of a final determination hereunder with respect to such claim. 11.6 Exclusive Forum. Any action by a current or former Participant or Beneficiary arising out of or related to this Plan shall be litigated exclusively in the United States District Court for the Eastern District of Virginia, Richmond Division ("District Court") and any reviewing appellate court thereof. In the event that the District Court lacks subject matter jurisdiction over such an action, then, and only then, such action shall be litigated exclusively in the Circuit Court of Goochland, Virginia and any reviewing appellate court thereof.

28 ARTICLE XII General Provisions 12.1 Assignment. No interest of any Participant or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the sole and absolute discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code section 414(p)(1)(B)). The Company may assign any or all of its liabilities under this Plan in connection with any restructuring, recapitalization, sale of assets or other similar transactions affecting a Related Company without the consent of the Participant. 12.2 No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. The Employer makes no representations or warranties as to the tax consequences to a Participant or a Participant's Beneficiaries resulting from a deferral of income pursuant to the Plan. 12.3 No Employment Contract. The establishment of this Plan shall not be construed as conferring any legal or other rights upon any Employee or any other person for continuation of employment. Nor shall it interfere with the right of the Employer to discharge any Employee or to deal with him without regard to the effect thereof under the Plan. 12.4 Notice. Any notice or filing required or permitted to be delivered to the Committee under this Plan shall be delivered in writing. Notice shall be deemed given as of the date of receipt of the notice by the Committee. Notice shall be sent by certified mail to: CARMAX, INC. ATTN: DIRECTOR OF BENEFITS 12800 TUCKAHOE CREEK PARKWAY RICHMOND, VIRGINIA 23238 With a copy to: CARMAX, INC. ATTN: LEGAL DEPARTMENT 12800 TUCKAHOE CREEK PARKWAY RICHMOND, VIRGINIA 23238

29 Any notice or submission required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and either hand-delivered or sent by mail to the last known address of the Participant. 12.5 Headings. The headings of Plan Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control. 12.6 Construction. Unless the context requires otherwise, all words in any gender shall extend to and include all genders, all words used in the singular shall extend to and include the plural, and all words used in the plural shall extend to and include the singular. 12.7 Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole and absolute discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included. 12.8 Errors and Omissions. In the event an error or omission is discovered in the operation or administration of the Plan, the Committee or its delegate may make such equitable adjustments that it deems necessary or desirable to correct the error or omission, so long as such adjustments comply with Section 409A. 12.9 Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its sole and absolute discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments. 12.10 Facility of Payment to a Minor. Ifa distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Committee may, in its sole and absolute discretion, make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his residence; or (ii) to the conservator or committee or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Committee, the Company, and the Plan from further liability on account thereof.

30 12.11 Governing Law. Except as otherwise provided by federal law, the provisions of this Plan shall be construed, administered and enforced according to the laws of the Commonwealth of Virginia, without giving effect to its conflicts of law rules. WITNESS the following signature as of the 13th day of September, 2024. CARMAX, INC. /s/ Craig Cronheim Title: Chair, Benefits Administrative Committee SVP, Chief Human Resources Officer

EX-31.1

EXHIBIT 31.1

Certification of the Chief Executive Officer

Pursuant to Rule 13a-14(a)

I, William D. Nash, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CarMax, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  September 27, 2024

/s/ William D. Nash

William D. Nash

President and

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of the Chief Financial Officer

Pursuant to Rule 13a-14(a)

I, Enrique N. Mayor-Mora, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CarMax, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  September 27, 2024

/s/ Enrique N. Mayor-Mora 

Enrique N. Mayor-Mora

Executive Vice President and

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the CarMax, Inc. (the "company") Quarterly Report on Form 10-Q for the period ended August 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William D. Nash, President and Chief Executive Officer of the company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company as of, and for, the periods presented in the Report.

Date:	September 27, 2024	By:	/s/ William D. Nash
			William D. Nash
			President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the CarMax, Inc. (the "company") Quarterly Report on Form 10-Q for the period ended August 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Enrique N. Mayor-Mora, Executive Vice President and Chief Financial Officer of the company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company as of, and for, the periods presented in the Report.

Date:	September 27, 2024	By:	/s/ Enrique N. Mayor-Mora
			Enrique N. Mayor-Mora
			Executive Vice President and
			Chief Financial Officer

XML

Document And Entity Information - shares	6 Months Ended
	Aug. 31, 2024	Sep. 25, 2024
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Aug. 31, 2024
Document Transition Report	false
Entity File Number	1-31420
Entity Registrant Name	CARMAX, INC.
Entity Central Index Key	0001170010
Current Fiscal Year End Date	--02-28
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1821055
Entity Address, Address Line One	12800 Tuckahoe Creek Parkway
Entity Address, City or Town	Richmond,
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23238
City Area Code	804
Local Phone Number	747-0422
Title of 12(b) Security	Common Stock
Trading Symbol	KMX
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
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Entity Emerging Growth Company	false
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Consolidated Statements Of Earnings - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	$ 7,013,529	$ 7,073,836	$ 14,126,926	$ 14,760,899
TOTAL COST OF SALES	6,253,062	6,377,071	12,574,564	13,246,744
GROSS PROFIT	760,467	696,765	1,552,362	1,514,155
CARMAX AUTO FINANCE INCOME	115,580	134,987	262,550	272,345
Selling, general and administrative expenses	610,562	585,694	1,249,140	1,145,531
Depreciation, Depletion and Amortization, Nonproduction	63,901	58,817	125,770	117,236
Interest expense	27,021	31,585	58,383	62,051
Other income	(3,281)	(2,630)	(2,865)	(3,844)
Earnings before income taxes	177,844	158,286	384,484	465,526
Income tax provision	45,035	39,651	99,235	118,593
NET EARNINGS	$ 132,809	$ 118,635	$ 285,249	$ 346,933
WEIGHTED AVERAGE COMMON SHARES:
Basic, shares	155,866	158,479	156,513	158,298
Diluted, shares	156,526	159,238	157,116	158,900
NET EARNINGS PER SHARE:
Basic (in dollars per share)	$ 0.85	$ 0.75	$ 1.82	$ 2.19
Diluted (in dollars per share)	$ 0.85	$ 0.75	$ 1.82	$ 2.18
Used vehicle sales
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	$ 5,677,081	$ 5,591,143	$ 11,354,557	$ 11,592,614
TOTAL COST OF SALES	5,198,315	5,139,034	10,380,294	10,625,880
Wholesale vehicle sales
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	1,154,465	1,321,975	2,410,904	2,836,338
TOTAL COST OF SALES	1,016,590	1,185,359	2,115,901	2,531,897
Total other sales and revenues
SALES AND OPERATING REVENUES:
NET SALES AND OPERATING REVENUES	181,983	160,718	361,465	331,947
TOTAL COST OF SALES	$ 38,157	$ 52,678	$ 78,369	$ 88,967
NET SALES AND OPERATING REVENUES
Percentage of Sales
Item as a percent of net sales and operating revenues	100.00%	100.00%	100.00%	100.00%
TOTAL COST OF SALES
Percentage of Sales
Item as a percent of net sales and operating revenues	89.20%	90.20%	89.00%	89.70%
GROSS PROFIT
Percentage of Sales
Item as a percent of net sales and operating revenues	10.80%	9.80%	11.00%	10.30%
CARMAX AUTO FINANCE INCOME
Percentage of Sales
Item as a percent of net sales and operating revenues	1.60%	1.90%	1.90%	1.80%
Selling, general and administrative expenses
Percentage of Sales
Item as a percent of net sales and operating revenues	8.70%	8.30%	8.80%	7.80%
Depreciation and Amortization, Nonproduction
Percentage of Sales
Item as a percent of net sales and operating revenues	0.90%	0.80%	0.90%	0.80%
Interest expense
Percentage of Sales
Item as a percent of net sales and operating revenues	0.40%	0.40%	0.40%	0.40%
Other income
Percentage of Sales
Item as a percent of net sales and operating revenues	0.00%	0.00%	0.00%	0.00%
Earnings before income taxes
Percentage of Sales
Item as a percent of net sales and operating revenues	2.50%	2.20%	2.70%	3.20%
Income tax provision
Percentage of Sales
Item as a percent of net sales and operating revenues	0.60%	0.60%	0.70%	0.80%
NET EARNINGS
Percentage of Sales
Item as a percent of net sales and operating revenues	1.90%	1.70%	2.00%	2.40%
NET SALES AND OPERATING REVENUES | Used vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	80.90%	79.00%	80.40%	78.50%
NET SALES AND OPERATING REVENUES | Wholesale vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	16.50%	18.70%	17.10%	19.20%
NET SALES AND OPERATING REVENUES | Total other sales and revenues
Percentage of Sales
Item as a percent of net sales and operating revenues	2.60%	2.30%	2.60%	2.20%
TOTAL COST OF SALES | Used vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	74.10%	72.60%	73.50%	72.00%
TOTAL COST OF SALES | Wholesale vehicle sales
Percentage of Sales
Item as a percent of net sales and operating revenues	14.50%	16.80%	15.00%	17.20%
TOTAL COST OF SALES | Total other sales and revenues
Percentage of Sales
Item as a percent of net sales and operating revenues	0.50%	0.70%	0.60%	0.60%

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Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Statement of Comprehensive Income [Abstract]
NET EARNINGS	$ 132,809	$ 118,635	$ 285,249	$ 346,933
Other comprehensive (loss) income, net of taxes:
Net change in retirement benefit plan unrecognized actuarial losses	85	98	169	196
Net change in cash flow hedge unrecognized gains	(52,706)	17,169	(50,391)	(19,468)
Other comprehensive income (loss), net of taxes	(52,621)	17,267	(50,222)	(19,272)
TOTAL COMPREHENSIVE INCOME	$ 80,188	$ 135,902	$ 235,027	$ 327,661

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Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 31, 2024	Feb. 29, 2024
CURRENT ASSETS:
Cash and cash equivalents	$ 524,667	$ 574,142
Restricted cash from collections on auto loans receivable	572,630	506,648
Accounts receivable, net	228,112	221,153
Inventory	3,397,746	3,678,070
Other current assets	135,901	246,581
TOTAL CURRENT ASSETS	4,859,056	5,226,594
Auto loans receivable, net of allowance for loan losses of $500,834 and $482,790 as of August 31, 2024 and February 29, 2024, respectively	17,413,589	17,011,844
Property and equipment, net of accumulated depreciation of $1,940,005 and $1,813,783 as of August 31, 2024 and February 29, 2024, respectively	3,763,089	3,665,530
Deferred Income Tax Assets, Net	126,883	98,790
Operating lease assets	495,783	520,717
Goodwill	141,258	141,258
Other assets	496,160	532,064
TOTAL ASSETS	27,295,818	27,196,797
CURRENT LIABILITIES:
Accounts payable	1,008,044	933,708
Accrued expenses and other current liabilities	483,922	523,971
Accrued income taxes	34,063	0
Current portion of operating lease liabilities	57,959	57,161
Current portion of long-term debt	21,771	313,282
Current portion of non-recourse notes payable	550,045	484,167
TOTAL CURRENT LIABILITIES	2,155,804	2,312,289
Long-term debt, excluding current portion	1,588,260	1,602,355
Non-recourse notes payable, excluding current portion	16,516,943	16,357,301
Operating lease liabilities, excluding current portion	473,158	496,210
Other liabilities	382,044	354,902
TOTAL LIABILITIES	21,116,209	21,123,057
Commitments and contingent liabilities
SHAREHOLDERS’ EQUITY:
Common stock, $0.50 par value; 350,000,000 shares authorized; 155,332,046 and 157,611,939 shares issued and outstanding as of August 31, 2024 and February 29, 2024, respectively	77,666	78,806
Capital in excess of par value	1,856,385	1,808,746
Accumulated other comprehensive income	9,057	59,279
Retained earnings	4,236,501	4,126,909
TOTAL SHAREHOLDERS’ EQUITY	6,179,609	6,073,740
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 27,295,818	$ 27,196,797

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Aug. 31, 2024	Feb. 29, 2024
Statement of Financial Position [Abstract]
Financing Receivable, Allowance for Credit Loss	$ 500,834	$ 482,790
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 1,940,005	$ 1,813,783
Common Stock, Par or Stated Value Per Share	$ 0.50	$ 0.50
Common Stock, Shares Authorized	350,000,000	350,000,000
Common Stock, Shares, Issued	155,332,046	157,611,939
Common stock, shares outstanding	155,332,046	157,611,939

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Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023
OPERATING ACTIVITIES:
Net earnings	$ 285,249	$ 346,933
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation and amortization	141,964	126,971
Share-based compensation expense	82,703	69,445
Provision for loan losses	193,798	170,672
Provision for cancellation reserves	49,302	45,199
Deferred income tax benefit	(11,789)	(24,845)
Other	2,039	3,868
Net (increase) decrease in:
Accounts receivable, net	(6,959)	26,909
Inventory	280,324	(113,144)
Other current assets	111,438	33,431
Auto loans receivable, net	(595,543)	(828,631)
Other assets	(9,486)	(6,668)
Net increase (decrease) in:
Accounts payable, accrued expenses and other current liabilities and accrued income taxes	23,474	132,566
Other liabilities	(45,100)	(43,826)
Net Cash Provided by (Used in) Operating Activities	501,414	(61,120)
INVESTING ACTIVITIES:
Capital expenditures	(213,123)	(210,167)
Proceeds from disposal of property and equipment	130	1,247
Purchases of investments	(3,091)	(3,236)
Sales and returns of investments	621	405
Net Cash Provided by (Used in) Investing Activities	(215,463)	(211,751)
FINANCING ACTIVITIES:
Proceeds from issuances of long-term debt	0	134,600
Payments on long-term debt	(306,274)	(240,093)
Cash paid for debt issuance costs	(12,985)	(10,650)
Payments on finance lease obligations	(9,056)	(7,810)
Issuances of non-recourse notes payable	6,971,000	6,179,929
Payments on non-recourse notes payable	(6,742,743)	(5,532,403)
Repurchase and retirement of common stock	(213,305)	(4,143)
Equity issuances	30,296	27,534
Net Cash Provided by (Used in) Financing Activities	(283,067)	546,964
Increase in cash, cash equivalents, and restricted cash	2,884	274,093
Cash, cash equivalents, and restricted cash at beginning of year	1,250,410	951,004
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	1,253,294	1,225,097
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents	524,667	521,098
Restricted cash from collections on auto loans receivable	572,630	534,792
Restricted cash included in other assets	155,997	169,207
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$ 1,253,294	$ 1,225,097

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Consolidated Statements of Shareholders' Equity Statement - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]
BALANCE, SHARES at Feb. 28, 2023		158,079,000
BALANCE at Feb. 28, 2023	$ 5,613,077	$ 79,040	$ 1,713,074	$ 3,723,094	$ 97,869
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	228,298			228,298
Other Comprehensive Income (Loss), Net of Tax	(36,539)				(36,539)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	21,274		21,274
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		18,000
Stock Issued During Period, Value, Stock Options Exercised	988	$ 9	979
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		112,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(3,930)	$ 56	(3,986)
BALANCE, SHARES at May. 31, 2023		158,209,000
BALANCE at May. 31, 2023	5,823,168	$ 79,105	1,731,341	3,951,392	61,330
BALANCE, SHARES at Feb. 28, 2023		158,079,000
BALANCE at Feb. 28, 2023	5,613,077	$ 79,040	1,713,074	3,723,094	97,869
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	346,933
Other Comprehensive Income (Loss), Net of Tax	(19,272)
BALANCE, SHARES at Aug. 31, 2023		158,656,000
BALANCE at Aug. 31, 2023	6,005,659	$ 79,328	1,777,707	4,070,027	78,597
BALANCE, SHARES at May. 31, 2023		158,209,000
BALANCE at May. 31, 2023	5,823,168	$ 79,105	1,731,341	3,951,392	61,330
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	118,635			118,635
Other Comprehensive Income (Loss), Net of Tax	17,267				17,267
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	20,256		20,256
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		446,000
Stock Issued During Period, Value, Stock Options Exercised	26,546	$ 223	26,323
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		1,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(213)	$ 0	(213)
BALANCE, SHARES at Aug. 31, 2023		158,656,000
BALANCE at Aug. 31, 2023	$ 6,005,659	$ 79,328	1,777,707	4,070,027	78,597
BALANCE, SHARES at Feb. 29, 2024	157,611,939	157,612,000
BALANCE at Feb. 29, 2024	$ 6,073,740	$ 78,806	1,808,746	4,126,909	59,279
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	152,440			152,440
Other Comprehensive Income (Loss), Net of Tax	2,399				2,399
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	36,708		36,708
Stock Repurchased and Retired During Period, Shares		(1,446,000)
Stock Repurchased and Retired During Period, Value	(104,889)	$ (723)	(17,615)	(86,551)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		138,000
Stock Issued During Period, Value, Stock Options Exercised	8,209	$ 69	8,140
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		49,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	(1,737)	$ 24	(1,761)
BALANCE, SHARES at May. 31, 2024		156,353,000
BALANCE at May. 31, 2024	$ 6,166,870	$ 78,176	1,834,218	4,192,798	61,678
BALANCE, SHARES at Feb. 29, 2024	157,611,939	157,612,000
BALANCE at Feb. 29, 2024	$ 6,073,740	$ 78,806	1,808,746	4,126,909	59,279
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	285,249
Other Comprehensive Income (Loss), Net of Tax	$ (50,222)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	485,000
BALANCE, SHARES at Aug. 31, 2024	155,332,046	155,332,000
BALANCE at Aug. 31, 2024	$ 6,179,609	$ 77,666	1,856,385	4,236,501	9,057
BALANCE, SHARES at May. 31, 2024		156,353,000
BALANCE at May. 31, 2024	6,166,870	$ 78,176	1,834,218	4,192,798	61,678
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net earnings	132,809			132,809
Other Comprehensive Income (Loss), Net of Tax	(52,621)				(52,621)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	17,328		17,328
Stock Repurchased and Retired During Period, Shares		(1,376,000)
Stock Repurchased and Retired During Period, Value	(106,853)	$ (688)	(17,059)	(89,106)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		347,000
Stock Issued During Period, Value, Stock Options Exercised	22,087	$ 173	21,914
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture		8,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	$ (11)	$ 5	(16)
BALANCE, SHARES at Aug. 31, 2024	155,332,046	155,332,000
BALANCE at Aug. 31, 2024	$ 6,179,609	$ 77,666	$ 1,856,385	$ 4,236,501	$ 9,057

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Supplemental Cash Flow Information

6 Months Ended

Aug. 31, 2024

Supplemental Cash Flow Elements [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

Supplemental Cash Flow Information

Supplemental disclosures of cash flow information:

	Six Months Ended August 31
(In thousands)	2024		2023
Non-cash investing and financing activities:
Increase (decrease) in accrued capital expenditures	$	816	$	(18,607)
Increase in financing obligations	$	—	$	4,527

See Note 13 for supplemental cash flow information related to leases.

Cash Flow, Supplemental Disclosures [Text Block]

	Six Months Ended August 31
(In thousands)	2024		2023
Non-cash investing and financing activities:
Increase (decrease) in accrued capital expenditures	$	816	$	(18,607)
Increase in financing obligations	$	—	$	4,527

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Supplemental Cash Flow Information Supplemental Cash Flow Information

6 Months Ended

Aug. 31, 2024

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

	Six Months Ended August 31
(In thousands)	2024		2023
Non-cash investing and financing activities:
Increase (decrease) in accrued capital expenditures	$	816	$	(18,607)
Increase in financing obligations	$	—	$	4,527

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Supplemental Cash Flow Information Supplemental Cash Flow Information - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023
Supplemental Cash Flow Elements [Abstract]
Increase (decrease) in accrued capital expenditures	$ 816	$ 18,607
Increase in financing obligations	$ 0	$ 4,527

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Background

6 Months Ended

Aug. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description and Accounting Policies [Text Block]

Background

Business. CarMax, Inc. (“we,” “our,” “us,” “CarMax” and “the company”), including its wholly owned subsidiaries, is the nation’s largest retailer of used vehicles.  We operate in two reportable segments:  CarMax Sales Operations and CarMax Auto Finance (“CAF”).  Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.  Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.

On June 1, 2021, we completed the acquisition of Edmunds Holding Company (“Edmunds”). At that time, Edmunds was identified as a non-reportable operating segment and has been presented as “Other” in the Segment Information footnote in our prior period financial statements. Since the acquisition, Edmunds’ business strategy has become increasingly integrated with that of CarMax Sales Operations. Beginning in the first quarter of fiscal 2025, the chief operating decision maker (“CODM”) assessed the financial performance related to Edmunds’ operations together with the rest of the CarMax Sales Operations segment. As a result, as of May 31, 2024, the company realigned its operating segments to be consistent with the manner in which the CODM assesses performance and makes resource allocations. The company now operates in two operating segments, CarMax Sales Operations and CAF, both of which continue to be reportable segments.

The operating segment change did not impact the company’s consolidated financial statements but did impact our previous segment footnote disclosure. The Segment Information footnote is no longer presented, as the previous disclosures were for the purpose of presenting the Edmunds operating segment separate from CarMax Sales Operations. The current and prior period required disclosures related to our reportable segments are included elsewhere within the consolidated financial statements and related footnotes. The performance of our CarMax Sales Operations segment is reviewed by our CODM at the gross profit level, the components of which are presented within the consolidated statement of earnings. The required segment information related to our CAF segment is presented in Note 3. Additionally, asset information by segment is not utilized for purposes of assessing performance or allocating resources and, as a result, such information has not been presented.

We deliver an unrivaled customer experience by offering a broad selection of quality used vehicles and related products and services at competitive, no-haggle prices using a customer-friendly sales process.  Our omni-channel platform, which gives us the largest addressable market in the used car industry, empowers our retail customers to buy a car on their terms – online, in-store or an integrated combination of both. We offer customers a range of related products and services, including the appraisal and purchase of vehicles directly from consumers and dealers; the financing of retail vehicle purchases through CAF and third-party finance providers; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); advertising and subscription services; and vehicle repair service.  Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through on-site or virtual wholesale auctions.

Basis of Presentation and Use of Estimates. The accompanying interim unaudited consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.  These interim unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, such interim consolidated financial statements reflect all normal recurring adjustments considered necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.  

The accounting policies followed in the presentation of our interim financial results are consistent with those included in the company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2024 (the “2024 Annual Report”), with the exception of those related to recent accounting pronouncements adopted in the current fiscal year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our 2024 Annual Report.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.  Certain prior year amounts have been reclassified to conform to the current year’s presentation.  Amounts and percentages may not total due to rounding

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Revenue

6 Months Ended

Aug. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Revenue

We recognize revenue when control of the good or service has been transferred to the customer, generally either at the time of sale or upon delivery to a customer.  Our contracts have a fixed contract price and revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. We collect sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale.  These taxes are accounted for on a net basis and are not included in net sales and operating revenues or cost of sales. We generally expense sales commissions when incurred because the amortization period would have been less than one year. These costs are recorded within selling, general and administrative expenses. We do not have any significant payment terms as payment is received at or shortly after the point of sale.

Disaggregation of Revenue

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2024		2023		2024		2023
Used vehicle sales	$	5,677.1	$	5,591.1	$	11,354.6	$	11,592.6
Wholesale vehicle sales	1,154.5		1,322.0		2,410.9		2,836.3
Other sales and revenues:
Extended protection plan revenues	121.4		101.7		240.2		212.9
Third-party finance income/(fees), net	1.4		(1.5)		(0.2)		(1.2)
Advertising & subscription revenues (1)	34.3		33.5		69.0		64.9
Service revenues	21.7		21.4		44.4		43.5
Other	3.2		5.6		8.1		11.8
Total other sales and revenues	182.0		160.7		361.5		331.9
Total net sales and operating revenues	$	7,013.5	$	7,073.8	$	14,126.9	$	14,760.9

(1)    Excludes intercompany sales and operating revenues that have been eliminated in consolidation.

Used Vehicle Sales. Revenue from the sale of used vehicles is recognized upon transfer of control of the vehicle to the customer. As part of our customer service strategy, we guarantee the retail vehicles we sell with a 10-day money-back guarantee.  We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities. We also guarantee the used vehicles we sell with a 90-day/4,000-mile limited warranty. These warranties are deemed assurance-type warranties and are accounted for as warranty obligations. See Note 15 for additional information on this warranty and its related obligation.

Wholesale Vehicle Sales. Wholesale vehicles are sold at our auctions, and revenue from the sale of these vehicles is recognized upon transfer of control of the vehicle to the customer. Dealers also pay a fee to us based on the sale price of the vehicles they purchase. This fee is recognized as revenue at the time of sale. While we provide condition disclosures on each wholesale vehicle sold, the vehicles are subject to a limited right of return. We record a reserve for estimated returns based on historical experience and trends. The reserve for estimated returns is presented gross on the consolidated balance sheets, with a return asset recorded in other current assets and a refund liability recorded in accrued expenses and other current liabilities.

EPP Revenues. We also sell ESP and GAP products on behalf of unrelated third parties, who are primarily responsible for fulfilling the contract, to customers who purchase a retail vehicle.  The ESPs we currently offer on all used vehicles provide coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract. We recognize revenue, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations. The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base.  Our risk related to contract cancellations is limited to the revenue that we receive.  Cancellations fluctuate depending on the volume of EPP sales, customer financing default or prepayment rates, and shifts in customer behavior, including those related to changes in the coverage or term of the product.  The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities.  See Note 7 for additional information on cancellation reserves.

We are contractually entitled to receive profit-sharing revenues based on the performance of the ESPs administered by third parties. These revenues are a form of variable consideration included in EPP revenues to the extent that it is probable that it

will not result in a significant revenue reversal. An estimate of the amount to which we expect to be entitled is determined upon satisfying the performance obligation of selling the ESP. This estimate is subject to various constraints; primarily, factors that are outside of the company’s influence or control. We have determined that these constraints generally preclude any profit-sharing revenues from being recognized before they are paid. As of August 31, 2024 and February 29, 2024, no current or long-term contract asset was recognized related to cumulative profit-sharing payments to which we expect to be entitled. The estimate of the amount to which we expect to be entitled is reassessed each reporting period and any changes are reflected in other sales and revenues on our consolidated statements of earnings and other assets on our consolidated balance sheets.

Third-Party Finance Income/(Fees). Customers applying for financing who are not approved or are conditionally approved by CAF are generally evaluated by other third-party finance providers.  These providers generally either pay us or are paid a fixed, pre-negotiated fee per contract.  We recognize these fees at the time of sale.

Advertising and Subscription Revenues. Advertising and subscription revenues consist of revenues earned by our Edmunds business. Advertising revenues are derived from advertising contracts with automotive manufacturers based on fixed fees per impression and fees for certain activities completed by customers on the manufacturers’ websites. These fees are recognized in the period the impressions are delivered or certain activities occurred. Subscription revenues are derived from packages sold to automotive dealers that include car leads, inventory listings and enhanced placement in Edmunds’ dealer locator and are recognized over the period that the services are made available to the dealers. Subscription revenues also include a digital marketing subscription service, which allows dealers to gain exposure on third party partner websites. Revenues for this service are recognized on a net basis.

Service Revenues. Service revenue consists of labor and parts income related to vehicle repair service, including repairs of vehicles covered under an ESP we sell or warranty program. Service revenue is recognized at the time the work is completed.

Other Revenues. Other revenues include miscellaneous goods and services, which are immaterial to our consolidated financial statements.

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CarMax Auto Finance

6 Months Ended

Aug. 31, 2024

CarMax Auto Finance Income [Abstract]

CarMax Auto Finance

CarMax Auto Finance

CAF provides financing to qualified retail customers purchasing vehicles from CarMax.  CAF provides us the opportunity to capture additional profits, cash flows and sales while managing our reliance on third-party finance sources.  Management regularly analyzes CAF’s operating results by assessing profitability, the performance of the auto loans receivable, including trends in credit losses and delinquencies, and CAF direct expenses.  This information is used to assess CAF’s performance and make operating decisions, including resource allocation.

We typically use securitizations or other funding arrangements to fund loans originated by CAF.  CAF income primarily reflects the interest and fee income generated by the auto loans receivable less the interest expense associated with the debt issued to fund these receivables, a provision for estimated loan losses and direct CAF expenses.

CAF income does not include any allocation of indirect costs.  Although CAF benefits from certain indirect overhead expenditures, we have not allocated indirect costs to CAF to avoid making subjective allocation decisions.  Examples of indirect costs not allocated to CAF include retail store expenses and corporate expenses.  In addition, except for auto loans receivable, which are disclosed in Note 4, CAF assets are not separately reported nor do we allocate assets to CAF because such allocation would not be useful to management in making operating decisions.

Components of CAF Income

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2024		% (1)	2023		% (1)	2024		% (1)	2023		% (1)
Interest margin:
Interest and fee income	$	464.5	10.5	$	416.9	9.6	$	917.0	10.4	$	817.4	9.5
Interest expense	(193.7)		(4.4)	(152.0)		(3.5)	(376.0)		(4.3)	(294.6)		(3.4)
Total interest margin	270.8		6.1	264.9		6.1	541.0		6.1	522.8		6.1
Provision for loan losses	(112.6)		(2.5)	(89.8)		(2.1)	(193.8)		(2.2)	(170.7)		(2.0)
Total interest margin after provision for loan losses	158.2		3.6	175.1		4.0	347.2		3.9	352.1		4.1
Direct expenses:
Payroll and fringe benefit expense	(19.0)		(0.4)	(16.8)		(0.4)	(37.6)		(0.4)	(33.4)		(0.4)
Depreciation and amortization	(4.3)		(0.1)	(4.1)		(0.1)	(8.5)		(0.1)	(8.2)		(0.1)
Other direct expenses	(19.3)		(0.4)	(19.3)		(0.4)	(38.5)		(0.4)	(38.2)		(0.4)
Total direct expenses	(42.6)		(1.0)	(40.2)		(0.9)	(84.6)		(1.0)	(79.8)		(0.9)
CarMax Auto Finance income	$	115.6	2.6	$	135.0	3.1	$	262.6	3.0	$	272.3	3.2
Total average managed receivables	$	17,728.8		$	17,315.6		$	17,640.0		$	17,159.5

(1)    Annualized percentage of total average managed receivables.

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Auto Loan Receivables

6 Months Ended

Aug. 31, 2024

Receivables [Abstract]

Auto Loan Receivables

Auto Loans Receivable

Auto loans receivable include amounts due from customers related to retail vehicle sales financed through CAF and are presented net of an allowance for estimated loan losses.  These auto loans represent a large group of smaller-balance homogeneous loans, which we consider to be part of one class of financing receivable and one portfolio segment for purposes of determining our allowance for loan losses. We generally use warehouse facilities to fund auto loans receivable originated by CAF until we elect to fund them through an asset-backed term funding transaction, such as a term securitization or alternative funding arrangement.  We recognize transfers of auto loans receivable into the warehouse facilities and asset-backed term funding transactions (together, “non-recourse funding vehicles”) as secured borrowings, which result in recording the auto loans receivable and the related non-recourse notes payable on our consolidated balance sheets. The majority of the auto loans receivable serve as collateral for the related non-recourse notes payable of $17.10 billion as of August 31, 2024, and $16.87 billion as of February 29, 2024. See Note 9 for additional information on securitizations and non-recourse notes payable.

Interest income and expenses related to auto loans are included in CAF income.  Interest income on auto loans receivable is recognized when earned based on contractual loan terms.  All loans continue to accrue interest until repayment or charge-off.  When a charge-off occurs, accrued interest is written off by reversing interest income. Direct costs associated with loan originations are not considered material, and thus, are expensed as incurred.  See Note 3 for additional information on CAF income.

Auto Loans Receivable, Net

	As of August 31		As of February 29
(In millions)	2024		2024
Asset-backed term funding	$	12,801.5	$	12,638.2
Warehouse facilities	3,743.6		3,744.6
Overcollateralization (1)	775.9		790.9
Other managed receivables (2)	448.4		218.1
Total ending managed receivables	17,769.4		17,391.8
Accrued interest and fees	103.6		90.9
Other	41.4		11.9
Less: allowance for loan losses	(500.8)		(482.8)
Auto loans receivable, net	$	17,413.6	$	17,011.8

(1)    Represents receivables restricted as excess collateral for the non-recourse funding vehicles.

(2)    Other managed receivables includes receivables not funded through the non-recourse funding vehicles.

Credit Quality.  When customers apply for financing, CAF’s proprietary scoring models utilize the customers’ credit history and certain application information to evaluate and rank their risk.  We obtain credit histories and other credit data that includes information such as number, age, type of and payment history for prior or existing credit accounts.  The application information that is used includes income, collateral value and down payment.  The scoring models yield credit grades that represent the relative likelihood of repayment.  Customers with the highest probability of repayment are A-grade customers. Customers assigned a lower grade are determined to have a lower probability of repayment.  For loans that are approved, the credit grade influences the terms of the agreement, such as the required loan-to-value ratio and interest rate. After origination, credit grades are generally not updated.

CAF uses a combination of the initial credit grades and historical performance to monitor the credit quality of the auto loans receivable on an ongoing basis.  We validate the accuracy of the scoring models periodically.  Loan performance is reviewed on a recurring basis to identify whether the assigned grades adequately reflect the customers’ likelihood of repayment.

Ending Managed Receivables by Major Credit Grade

	As of August 31, 2024
	Fiscal Year of Origination (1)
(In millions)	2025		2024		2023		2022		2021		Prior to 2021		Total		% (2)
Core managed receivables (3):
A	$	2,432.5	$	3,204.6	$	2,137.6	$	1,237.3	$	410.1	$	139.3	$	9,561.4	53.8
B	1,194.6		1,987.3		1,432.4		968.0		358.6		155.7		6,096.6		34.3
C and other	252.0		330.0		404.1		314.3		141.6		66.8		1,508.8		8.5
Total core managed receivables	3,879.1		5,521.9		3,974.1		2,519.6		910.3		361.8		17,166.8		96.6
Other managed receivables (4):
C and other	167.8		214.0		144.2		58.3		7.1		11.2		602.6		3.4
Total ending managed receivables	$	4,046.9	$	5,735.9	$	4,118.3	$	2,577.9	$	917.4	$	373.0	$	17,769.4	100.0
Gross charge-offs	$	3.9	$	97.7	$	106.5	$	59.6	$	16.9	$	12.3	$	296.9

	As of February 29, 2024
	Fiscal Year of Origination (1)
(In millions)	2024		2023		2022		2021		2020		Prior to 2020		Total		% (2)
Core managed receivables (3):
A	$	3,922.7	$	2,660.6	$	1,635.1	$	614.0	$	268.7	$	40.0	$	9,141.1	52.6
B	2,370.8		1,738.8		1,225.9		493.3		233.4		61.3		6,123.5		35.2
C and other	344.1		498.6		400.3		192.2		86.6		26.9		1,548.7		8.9
Total core managed receivables	6,637.6		4,898.0		3,261.3		1,299.5		588.7		128.2		16,813.3		96.7
Other managed receivables (4):
C and other	299.0		176.3		72.6		9.3		12.1		9.2		578.5		3.3
Total ending managed receivables	$	6,936.6	$	5,074.3	$	3,333.9	$	1,308.8	$	600.8	$	137.4	$	17,391.8	100.0
Gross charge-offs	$	111.0	$	248.6	$	129.8	$	41.0	$	19.7	$	11.4	$	561.5

(1)    Classified based on credit grade assigned when customers were initially approved for financing.

(2)    Percent of total ending managed receivables.

(3)    Represents CAF’s Tier 1 originations.

(4)    Represents CAF’s Tier 2 and Tier 3 originations.

Allowance for Loan Losses.  The allowance for loan losses at August 31, 2024 represents the net credit losses expected over the remaining contractual life of our managed receivables. The allowance for loan losses is determined using a net loss timing curve method (“method”), primarily based on the composition of the portfolio of managed receivables and historical gross loss and recovery trends. Due to the fact that losses for receivables with less than 18 months of performance history can be volatile, our net loss estimate weights both historical losses by credit grade at origination and actual loss data on the receivables to-date, along with forward loss curves, in estimating future performance. Once the receivables have 18 months of performance history, the net loss estimate reflects actual loss experience of those receivables to-date, along with forward loss curves, to predict future performance. The forward loss curves are constructed using historical performance data and show the average timing of losses over the course of a receivable’s life. The net loss estimate is calculated by applying the loss rates developed using the methods described above to the amortized cost basis of the managed receivables at inception of the loan.

The output of the method is adjusted to take into account reasonable and supportable forecasts about the future. Specifically, the change in U.S. unemployment rates and the National Automobile Dealers Association used vehicle price index are used to predict changes in gross loss and recovery rates, respectively. An economic adjustment factor, based upon a single macroeconomic scenario, is developed to capture the relationship between changes in these forecasts and changes in gross loss and recovery rates. This factor is applied to the output of the method for the reasonable and supportable forecast period of two years. After the end of this two-year period, we revert to historical experience on a straight-line basis over a period of 12 months. We periodically consider whether the use of alternative metrics would result in improved model performance and revise the models when appropriate. We also consider whether qualitative adjustments are necessary for factors that are not reflected in the quantitative methods but impact the measurement of estimated credit losses. Such adjustments include the uncertainty 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.

Allowance for Loan Losses

	Three Months Ended August 31, 2024
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	396.6	$	96.5	$	493.1	2.79
Charge-offs	(131.1)		(32.7)		(163.8)
Recoveries (2)	52.1		6.8		58.9
Provision for loan losses	99.7		12.9		112.6
Balance as of end of period	$	417.3	$	83.5	$	500.8	2.82

	Three Months Ended August 31, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	427.5	$	107.9	$	535.4	3.11
Charge-offs	(118.7)		(24.5)		(143.2)
Recoveries (2)	48.5		7.5		56.0
Provision for loan losses	75.7		14.1		89.8
Balance as of end of period	$	433.0	$	105.0	$	538.0	3.08

	Six Months Ended August 31, 2024
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	389.7	$	93.1	$	482.8	2.78
Charge-offs	(244.1)		(52.8)		(296.9)
Recoveries (2)	106.0		15.1		121.1
Provision for loan losses	165.7		28.1		193.8
Balance as of end of period	$	417.3	$	83.5	$	500.8	2.82

	Six Months Ended August 31, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	401.5	$	105.7	$	507.2	3.02
Charge-offs	(211.8)		(41.2)		(253.0)
Recoveries (2)	99.0		14.1		113.1
Provision for loan losses	144.3		26.4		170.7
Balance as of end of period	$	433.0	$	105.0	$	538.0	3.08

(1)    Percent of total ending managed receivables.

(2)    Net of costs incurred to recover vehicle.

During the first six months of fiscal 2025, the allowance for loan losses as a percent of total ending managed receivables increased by 4 basis points. The increase was primarily due to unfavorable loss performance related to CAF’s core receivables as well as CAF’s expanded investment in Tier 2, partially offset by the previously implemented tightened underwriting standards in response to the current environment. The increase in net charge-offs primarily reflects continued customer hardship in the current economic environment. The allowance for loan losses as of August 31, 2024 reflects our best estimate of expected future losses based on recent trends in delinquencies, loss performance, recovery rates and the economic environment.

Past Due Receivables. An account is considered delinquent when the related customer fails to make a substantial portion of a scheduled payment on or before the due date. In general, accounts are charged-off on the last business day of the month during which the earliest of the following occurs: the receivable is 120 days or more delinquent as of the last business day of the month, the related vehicle is repossessed and liquidated, or the receivable is otherwise deemed uncollectable. For purposes of

determining impairment, auto loans are evaluated collectively, as they represent a large group of smaller-balance homogeneous loans, and therefore, are not individually evaluated for impairment.

Past Due Receivables

	As of August 31, 2024
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,506.6	$	5,609.7	$	1,204.3	$	16,320.6	$	465.1	$	16,785.7	94.47
Delinquent loans:
31-60 days past due	33.1		279.3		160.2		472.6		68.6		541.2		3.04
61-90 days past due	16.6		170.4		122.0		309.0		58.3		367.3		2.07
Greater than 90 days past due	5.1		37.2		22.3		64.6		10.6		75.2		0.42
Total past due	54.8		486.9		304.5		846.2		137.5		983.7		5.53
Total ending managed receivables	$	9,561.4	$	6,096.6	$	1,508.8	$	17,166.8	$	602.6	$	17,769.4	100.00

	As of February 29, 2024
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,088.1	$	5,666.3	$	1,243.7	$	15,998.1	$	447.1	$	16,445.2	94.56
Delinquent loans:
31-60 days past due	32.1		271.3		162.9		466.3		68.1		534.4		3.07
61-90 days past due	15.1		149.4		118.5		283.0		53.0		336.0		1.93
Greater than 90 days past due	5.8		36.5		23.6		65.9		10.3		76.2		0.44
Total past due	53.0		457.2		305.0		815.2		131.4		946.6		5.44
Total ending managed receivables	$	9,141.1	$	6,123.5	$	1,548.7	$	16,813.3	$	578.5	$	17,391.8	100.00

(1)    Percent of total ending managed receivables.

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Derivative Instruments And Hedging Activities

6 Months Ended

Aug. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments And Hedging Activities

Derivative Instruments and Hedging Activities

We use derivatives to manage certain risks arising from both our business operations and economic conditions, particularly with regard to issuances of debt.  Primary exposures include SOFR and other rates used as benchmarks in our securitizations and other debt financing.  We enter into derivative instruments to manage exposures related to the future known receipt or payment of uncertain cash amounts, the values of which are impacted by interest rates, and generally designate these derivative instruments as cash flow hedges for accounting purposes.  In certain cases, we may choose not to designate a derivative instrument as a cash flow hedge for accounting purposes due to uncertainty around the probability that future hedged transactions will occur. Our derivative instruments are used to manage (i) differences in the amount of our known or expected cash receipts and our known or expected cash payments principally related to the funding of our auto loans receivable, and (ii) exposure to variable interest rates associated with our term loans.

For the derivatives associated with our non-recourse funding vehicles that are designated as cash flow hedges, the changes in fair value are initially recorded in accumulated other comprehensive income (“AOCI”).  For the majority of these derivatives, the amounts are subsequently reclassified into CAF income in the period that the hedged forecasted transaction affects earnings, which occurs as interest expense is recognized on those future issuances of debt. During the next 12 months, we estimate that an additional $35.0 million will be reclassified from AOCI as an increase to CAF income. Changes in fair value related to derivatives that have not been designated as cash flow hedges for accounting purposes are recognized in the income statement in the period in which the change occurs. For the three and six months ended August 31, 2024, we recognized expense of $4.6 million and $7.7 million, respectively, in CAF income representing these changes in fair value.

As of August 31, 2024 and February 29, 2024, we had interest rate swaps outstanding with a combined notional amount of $5.12 billion and $5.21 billion, respectively, that were designated as cash flow hedges of interest rate risk. As of August 31,

2024 and February 29, 2024, we had interest rate swaps with a combined notional amount of $386.1 million and $704.0 million, respectively, outstanding that were not designated as cash flow hedges for accounting purposes.

See Note 6 for discussion of fair values of financial instruments and Note 12 for the effect on comprehensive income.

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Fair Value Measurements

6 Months Ended

Aug. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (referred to as the “exit price”).  The fair value should be based on assumptions that market participants would use, including a consideration of nonperformance risk. 

We assess the inputs used to measure fair value using the three-tier hierarchy.  The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market. 

Level 1     Inputs include unadjusted quoted prices in active markets for identical assets or liabilities that we can access at the measurement date.

Level 2     Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices from identical or similar assets in inactive markets, observable inputs, such as interest rates and yield curves, and assumptions about risk.

Level 3     Inputs that are significant to the measurement that are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk).

Our fair value processes include controls that are designed to ensure that fair values are appropriate.  Such controls include model validation, review of key model inputs, analysis of period-over-period fluctuations and reviews by senior management.

Valuation Methodologies 

Money Market Securities.  Money market securities are cash equivalents, which are included in cash and cash equivalents, restricted cash from collections on auto loans receivable and other assets.  They consist of highly liquid investments with original maturities of three months or less and are classified as Level 1. 

Mutual Fund Investments.  Mutual fund investments consist of publicly traded mutual funds that primarily include diversified equity investments in large-, mid- and small-cap domestic and international companies or investment grade debt securities.  The investments, which are included in other assets, are held in a rabbi trust established to fund informally our executive deferred compensation plan and are classified as Level 1.

Derivative Instruments.  The fair values of our derivative instruments are included in either other current assets, other assets, accounts payable or other liabilities.  Our derivatives are not exchange-traded and are over-the-counter customized derivative instruments.  All of our derivative exposures are with highly rated bank counterparties.

We measure derivative fair values assuming that the unit of account is an individual derivative instrument and that derivatives are sold or transferred on a stand-alone basis.  We estimate the fair value of our derivatives using quotes determined by the derivative counterparties and third-party valuation services.  Quotes from third-party valuation services and quotes received from bank counterparties project future cash flows and discount the future amounts to a present value using market-based expectations for interest rates and the contractual terms of the derivative instruments.  The models do not require significant judgment and model inputs can typically be observed in a liquid market; however, because the models include inputs other than quoted prices in active markets, all derivatives are classified as Level 2. 

Our derivative fair value measurements consider assumptions about counterparty and our own nonperformance risk.  We monitor counterparty and our own nonperformance risk and, in the event that we determine that a party is unlikely to perform under terms of the contract, we would adjust the derivative fair value to reflect the nonperformance risk.

Items Measured at Fair Value on a Recurring Basis

	As of August 31, 2024
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,166,588		$	—		$	1,166,588
Mutual fund investments	28,185			—			28,185
Derivative instruments designated as hedges	—			16,100			16,100
Derivative instruments not designated as hedges	—			5,351			5,351
Total assets at fair value	$	1,194,773		$	21,451		$	1,216,224
Percent of total assets at fair value	98.2		%	1.8		%	100.0		%
Percent of total assets	4.4		%	0.1		%	4.5		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(23,868)		$	(23,868)
Total liabilities at fair value	$	—		$	(23,868)		$	(23,868)
Percent of total liabilities	—		%	0.1		%	0.1		%

	As of February 29, 2024
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,164,270		$	—		$	1,164,270
Mutual fund investments	24,312			—			24,312
Derivative instruments designated as hedges	—			45,761			45,761
Derivative instruments not designated as hedges	—			13,064			13,064
Total assets at fair value	$	1,188,582		$	58,825		$	1,247,407
Percent of total assets at fair value	95.3		%	4.7		%	100.0		%
Percent of total assets	4.4		%	0.2		%	4.6		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(2,302)		$	(2,302)
Total liabilities at fair value	$	—		$	(2,302)		$	(2,302)
Percent of total liabilities	—		%	—		%	—		%

Fair Value of Financial Instruments

The carrying value of our cash and cash equivalents, accounts receivable, other restricted cash deposits and accounts payable approximates fair value due to the short-term nature and/or variable rates associated with these financial instruments. Auto loans receivable are presented net of an allowance for estimated loan losses, which we believe approximates fair value. We believe that the carrying value of our revolving credit facility and term loans approximates fair value due to the variable rates associated with these obligations. The fair value of our senior unsecured notes, which are not carried at fair value on our consolidated balance sheets, was determined using Level 2 inputs based on quoted market prices. The carrying value and fair value of the senior unsecured notes as of August 31, 2024 and February 29, 2024, respectively, are as follows:

(In thousands)	As of August 31, 2024		As of February 29, 2024
Carrying value	$	400,000	$	400,000
Fair value	$	388,795	$	380,249

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Cancellation Reserves

6 Months Ended

Aug. 31, 2024

Cancellation Reserves [Abstract]

Cancellation Reserves

Cancellation Reserves

We recognize revenue for EPP products, on a net basis, at the time of sale. We also record a reserve, or refund liability, for estimated contract cancellations.  Cancellations of these services may result from early termination by the customer, or default or prepayment on the finance contract.  The reserve for cancellations is evaluated for each product and is based on forecasted forward cancellation curves utilizing historical experience, recent trends and credit mix of the customer base.

Cancellation Reserves

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2024		2023		2024		2023
Balance as of beginning of period	$	131.3	$	138.7	$	128.3	$	139.2
Cancellations	(22.6)		(23.2)		(43.9)		(47.8)
Provision for future cancellations	25.0		21.1		49.3		45.2
Balance as of end of period	$	133.7	$	136.6	$	133.7	$	136.6

The current portion of estimated cancellation reserves is recognized as a component of accrued expenses and other current liabilities with the remaining amount recognized in other liabilities. As of August 31, 2024 and February 29, 2024, the current portion of cancellation reserves was $72.3 million and $69.7 million, respectively.

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Income Taxes

6 Months Ended

Aug. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We had $31.3 million of gross unrecognized tax benefits as of August 31, 2024, and $28.8 million as of February 29, 2024.  There were no significant changes to the gross unrecognized tax benefits as reported for the fiscal year ended February 29, 2024.

Within the next 12 months, it is reasonably possible that statutes will expire and previously unrecognized tax benefits related to the prepayment of services provided by related entities will be recognized. Recognition of the benefits will decrease gross unrecognized tax benefits by approximately $14.0 million and would not materially impact our effective tax rate.

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Debt

3 Months Ended

Aug. 31, 2024

Debt Disclosure [Abstract]

Debt

Debt

(In thousands)		As of August 31		As of February 29
Debt Description (1)	Maturity Date	2024		2024
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	June 2024	—		300,000
Term loan (2)	October 2026	699,703		699,633
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	510,744		516,544
Non-recourse notes payable	Various dates through January 2031	17,095,229		16,866,972
Total debt		18,705,676		18,783,149
Less: current portion		(571,816)		(797,449)
Less: unamortized debt issuance costs		(28,657)		(26,044)
Long-term debt, net		$	18,105,203	$	17,959,656

(1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

(2)    Borrowings accrue interest at variable rates based on SOFR, the federal funds rate, or the prime rate, depending on the type of borrowing.

Revolving Credit Facility. Borrowings under our $2.00 billion unsecured revolving credit facility (the “credit facility”) are available for working capital and general corporate purposes.  We pay a commitment fee on the unused portions of the available funds. Borrowings under the credit facility are either due “on demand” or at maturity depending on the type of borrowing.  Borrowings with “on demand” repayment terms are presented as short-term debt, while amounts due at maturity are presented as long-term debt.  As of August 31, 2024, the unused capacity of $2.00 billion was fully available to us.

Term Loans. The $300 million term loan was paid in May 2024. Borrowings under the $700 million term loan are available for working capital and general corporate purposes. The interest rate on our term loan was 6.35% as of August 31, 2024. The $700 million term loan was classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Senior Notes. Borrowings under our unsecured senior notes totaling $400 million are available for working capital and general corporate purposes. As of August 31, 2024, all notes were classified as long-term debt as no repayments are scheduled to be made within the next 12 months.

Financing Obligations.  Financing obligations relate to stores subject to sale-leaseback transactions that do not qualify for sale accounting.  The financing obligations were structured at varying interest rates and generally have initial lease terms ranging from 15 to 20 years with payments made monthly.  We have not entered into any new sale-leaseback transactions since fiscal 2009. In the event the agreements are modified or extended beyond their original term, the related obligation is adjusted based on the present value of the revised future payments, with a corresponding change to the assets subject to these transactions. Upon modification, the amortization of the obligation is reset, resulting in more of the payments being applied to interest expense in the initial years following the modification.  

Non-Recourse Notes Payable.  The non-recourse notes payable relate to auto loans receivable funded through non-recourse funding vehicles.  The timing of principal payments on the non-recourse notes payable is based on the timing of principal collections and defaults on the related auto loans receivable. The current portion of non-recourse notes payable represents principal payments that are due to be distributed in the following period. 

Notes payable related to our asset-backed term funding transactions accrue interest predominantly at fixed rates and have scheduled maturities through January 2031, but may mature earlier, depending upon the repayment rate of the underlying auto loans receivable.

Information on our funding vehicles of non-recourse notes payable as of August 31, 2024 are as follows:

(In billions)	Capacity
Warehouse facilities:
December 2024 expiration	$	0.70
March 2025 expiration	3.10
August 2025 expiration	2.30
Combined warehouse facility limit	$	6.10
Unused capacity	$	2.36
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.74
Asset-backed term funding transactions	13.36
Non-recourse notes payable	$	17.10

We generally enter into warehouse facility agreements for one-year terms and typically renew the agreements annually. The return requirements of warehouse facility investors could fluctuate significantly depending on market conditions.  At renewal, the cost, structure and capacity of the facilities could change.  These changes could have a significant impact on our funding costs.

In June 2024, we entered into a $625 million asset-backed term funding transaction related to our new non-prime securitization program. In July 2024, we entered into a $1.4 billion asset-backed term funding transaction comprised of higher prime auto loans receivable. Going forward, we plan to utilize separate asset-backed securitization programs to more broadly incorporate funding of CAF’s receivables across distinct higher prime and non-prime segments. We believe this new two-program strategy will enable us to fund incremental originations and support future CAF growth across the credit spectrum by creating additional funding capacity, driving additional finance income for the business over time.

See Note 4 for additional information on the related auto loans receivable.

Capitalized Interest.  We capitalize interest in connection with the construction of certain facilities.  For the six months ended August 31, 2024 and 2023, we capitalized interest of $3.1 million and $2.9 million, respectively. 

Financial Covenants.  The credit facility, term loan and senior note agreements contain representations and warranties, conditions and covenants.  We must also meet financial covenants in conjunction with certain financing obligations.  The agreements governing our non-recourse funding vehicles contain representations and warranties, as well as financial covenants and performance triggers related to events of default.  As of August 31, 2024, we were in compliance with these financial covenants and our non-recourse funding vehicles were in compliance with these performance triggers.

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Stock and Stock-Based Incentive Plans

6 Months Ended

Aug. 31, 2024

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Stock and Stock-Based Incentive Plans

Stock and Stock-Based Incentive Plans

(A)Share Repurchase Program

As of August 31, 2024, a total of $4.0 billion of board authorizations for repurchases of our common stock was outstanding, with no expiration date, of which $2.15 billion remained available for repurchase.

Common Stock Repurchases

	Three Months Ended				Six Months Ended
	August 31				August 31
	2024		2023		2024		2023
Number of shares repurchased (in thousands)	1,376.7		—		2,822.4		—
Average cost per share	$	77.04	$	—	$	74.41	$	—
Available for repurchase, as of end of period (in millions)	$	2,150.1	$	2,451.3	$	2,150.1	$	2,451.3

(B)Share-Based Compensation

Composition of Share-Based Compensation Expense

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2024		2023		2024		2023
Cost of sales	$	1,639	$	1,195	$	2,648	$	2,585
CarMax Auto Finance income	1,449		1,198		2,134		1,647
Selling, general and administrative expenses	32,133		31,294		79,234		66,598
Share-based compensation expense, before income taxes	$	35,221	$	33,687	$	84,016	$	70,830

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2024		2023		2024		2023
Nonqualified stock options	$	9,174	$	13,650	$	28,118	$	27,727
Cash-settled restricted stock units (RSUs)	17,277		12,804		28,667		27,915
Stock-settled market stock units (MSUs)	4,187		3,884		11,767		10,108
Other share-based incentives:
Stock-settled performance stock units (PSUs)	2,117		797		12,301		1,538
Restricted stock (RSAs)	—		76		—		307
Stock-settled deferred stock units (DSUs)	1,850		1,850		1,850		1,850
Employee stock purchase plan	616		626		1,313		1,385
Total other share-based incentives	$	4,583	$	3,349	$	15,464	$	5,080
Share-based compensation expense, before income taxes	$	35,221	$	33,687	$	84,016	$	70,830

(C)Stock Incentive Plan Information

Share/Unit Activity

	Six Months Ended August 31, 2024
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 29, 2024	7,393		383		195		1,297
Granted	1,230		238		263		918
Exercised or vested and converted	(485)		(75)		(47)		(556)
Cancelled	(111)		(11)		—		(65)
Outstanding as of August 31, 2024	8,027		535		411		1,594
Weighted average grant date fair value per share/unit:
Granted	$	29.20	$	95.73	$	69.43	$	67.22
Ending outstanding	$	28.07	$	104.28	$	75.26	$	71.19
	As of August 31, 2024
Unrecognized compensation (in millions)	$	46.6	$	24.5	$	4.7

Schedule of Share Per Unit Activity

Share/Unit Activity

	Six Months Ended August 31, 2024
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 29, 2024	7,393		383		195		1,297
Granted	1,230		238		263		918
Exercised or vested and converted	(485)		(75)		(47)		(556)
Cancelled	(111)		(11)		—		(65)
Outstanding as of August 31, 2024	8,027		535		411		1,594
Weighted average grant date fair value per share/unit:
Granted	$	29.20	$	95.73	$	69.43	$	67.22
Ending outstanding	$	28.07	$	104.28	$	75.26	$	71.19
	As of August 31, 2024
Unrecognized compensation (in millions)	$	46.6	$	24.5	$	4.7

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Net Earnings Per Share

6 Months Ended

Aug. 31, 2024

Earnings Per Share [Abstract]

Net Earnings Per Share

Net Earnings Per Share

Basic net earnings per share is computed by dividing net earnings available for basic common shares by the weighted average number of shares of common stock outstanding.  Diluted net earnings per share is computed by dividing net earnings available for diluted common shares by the sum of weighted average number of shares of common stock outstanding and dilutive potential common stock.  Diluted net earnings per share is calculated using the “if-converted” treasury stock method.

Basic and Dilutive Net Earnings Per Share Reconciliations

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands except per share data)	2024		2023		2024		2023
Net earnings	$	132,809	$	118,635	$	285,249	$	346,933
Weighted average common shares outstanding	155,866		158,479		156,513		158,298
Dilutive potential common shares:
Stock options	349		581		316		373
Stock-settled stock units and awards	311		178		287		229
Weighted average common shares and dilutive potential common shares	156,526		159,238		157,116		158,900
Basic net earnings per share	$	0.85	$	0.75	$	1.82	$	2.19
Diluted net earnings per share	$	0.85	$	0.75	$	1.82	$	2.18

Certain options to purchase shares of common stock were outstanding and not included in the calculation of diluted net earnings per share because their inclusion would have been antidilutive.  On a weighted average basis, for the three months ended August 31, 2024 and 2023, options to purchase 5,083,556 shares and 3,508,300 shares of common stock, respectively, were not included. For the six months ended August 31, 2024 and 2023, options to purchase 5,133,763 shares and 5,518,543 shares of common stock, respectively, were not included.

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Aug. 31, 2024

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income

Changes in Accumulated Other Comprehensive Income By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income
Balance as of February 29, 2024	$	(37,116)	$	96,395	$	59,279
Other comprehensive loss before reclassifications	—		(28,828)		(28,828)
Amounts reclassified from accumulated other comprehensive income	169		(21,563)		(21,394)
Other comprehensive income (loss)	169		(50,391)		(50,222)
Balance as of August 31, 2024	$	(36,947)	$	46,004	$	9,057

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2024		2023		2024		2023
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	49	$	58	$	99	$	116
CarMax Auto Finance income	3		3		7		7
Selling, general and administrative expenses	58		68		115		135
Total amortization reclassifications recognized in net pension expense	110		129		221		258
Tax expense	(25)		(31)		(52)		(62)
Amortization reclassifications recognized in net pension expense, net of tax	85		98		169		196
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	85		98		169		196
Cash Flow Hedges (Note 5):
Changes in fair value	(55,748)		35,002		(38,239)		(1,005)
Tax benefit (expense)	13,639		(8,535)		9,411		336
Changes in fair value, net of tax	(42,109)		26,467		(28,828)		(669)
Reclassifications to CarMax Auto Finance income	(14,010)		(12,295)		(28,508)		(24,859)
Tax benefit	3,413		2,997		6,945		6,060
Reclassification of hedge gains, net of tax	(10,597)		(9,298)		(21,563)		(18,799)
Net change in cash flow hedge unrecognized gains, net of tax	(52,706)		17,169		(50,391)		(19,468)
Total other comprehensive (loss) income, net of tax	$	(52,621)	$	17,267	$	(50,222)	$	(19,272)

Changes in the funded status of our retirement plans and changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in accumulated other comprehensive income. The cumulative balances are net of deferred taxes of $3.0 million as of August 31, 2024 and $19.3 million as of February 29, 2024.

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Leases (Notes)

6 Months Ended

Aug. 31, 2024

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

Leases

Our leases primarily consist of operating and finance leases related to retail stores, office space, land and equipment. We also have stores subject to sale-leaseback transactions that do not qualify for sale accounting and are accounted for as financing obligations. For more information on these financing obligations see Note 9.

The initial term for real property leases is typically 5 to 20 years. For equipment leases, the initial term generally ranges from 3 to 8 years. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 20 years or more. We include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise that option.

ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. We include variable lease payments in the initial measurement of ROU assets and lease liabilities only to the extent they depend on an index or rate. Changes in such indices or rates are accounted for in the period the change occurs, and do not result in the remeasurement of the ROU asset or liability. We are also responsible for payment of certain real estate taxes, insurance and other expenses on our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. We generally account for non-lease components, such as maintenance, separately from lease components. For certain equipment leases, we apply a portfolio approach to account for the lease assets and liabilities.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.

The components of lease expense were as follows:

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2024		2023		2024		2023
Operating lease cost (1)	$	22,873	$	22,239	$	46,101	$	44,186
Finance lease cost:
Depreciation of lease assets	2,976		4,907		6,798		9,442
Interest on lease liabilities	6,920		6,407		13,591		12,502
Total finance lease cost	9,896		11,314		20,389		21,944
Total lease cost	$	32,769	$	33,553	$	66,490	$	66,130

(1)    Includes short-term leases and variable lease costs, which are immaterial.

Supplemental balance sheet information related to leases was as follows:

		As of August 31		As of February 29
(In thousands)	Classification	2024		2024
Assets:
Operating lease assets	Operating lease assets	$	495,783	$	520,717
Finance lease assets	Property and equipment, net (1)	191,774		174,998
Total lease assets		$	687,557	$	695,715
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	57,959	$	57,161
Finance leases	Accrued expenses and other current liabilities	23,608		20,877
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	473,158		496,210
Finance leases	Other liabilities	211,590		198,759
Total lease liabilities		$	766,315	$	773,007

(1)    Finance lease assets are recorded net of accumulated depreciation of $62.3 million as of August 31, 2024 and $55.5 million as of February 29, 2024.

Lease term and discount rate information related to leases was as follows:

	As of August 31		As of February 29
Lease Term and Discount Rate	2024		2024
Weighted Average Remaining Lease Term (in years)
Operating leases	16.01		16.07
Finance leases	13.17		11.43
Weighted Average Discount Rate
Operating leases	5.10	%	5.05	%
Finance leases	15.79	%	17.16	%

Supplemental cash flow information related to leases was as follows:

	Six Months Ended August 31
(In thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	47,610	$	44,182
Operating cash flows from finance leases	$	12,642	$	12,076
Financing cash flows from finance leases	$	9,056	$	7,810
Lease assets obtained in exchange for lease obligations:
Operating leases	$	4,189	$	22,277
Finance leases	$	24,497	$	43,684

Maturities of lease liabilities were as follows:

	As of August 31, 2024
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2025, remaining	$	42,579	$	21,194
Fiscal 2026	78,928		48,763
Fiscal 2027	72,607		45,167
Fiscal 2028	68,493		38,332
Fiscal 2029	46,682		31,118
Thereafter	518,131		288,506
Total lease payments	827,420		473,080
Less: interest	(296,303)		(237,882)
Present value of lease liabilities	$	531,117	$	235,198

(1)    Lease payments exclude $4.7 million of legally binding minimum lease payments for leases signed but not yet commenced.

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Contingent Liabilities

6 Months Ended

Aug. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Contingent Liabilities

Contingent Liabilities

Litigation.  The company is a class member in a consolidated and settled class action lawsuit (In re: Takata Airbag Product Liability Litigation (U.S. District Court, Southern District of Florida)) against Toyota, Mazda, Subaru, BMW, Honda, Nissan, Ford and Volkswagen related to the economic loss associated with defective Takata airbags installed as original equipment in certain model vehicles from model years 2000-2019. In April 2020, CarMax received $40.3 million in net recoveries from the Toyota, Mazda, Subaru, BMW, Honda and Nissan settlement funds. In January 2022, CarMax received $3.8 million in net recoveries from the Ford settlement funds. On April 21, 2023, CarMax received $59.3 million in net recoveries from residual undisbursed funds in the Toyota, Mazda, Subaru, BMW, Honda and Nissan settlements. On August 9, 2023, CarMax received $7.9 million in additional residual funds in the BMW, Mazda, and Nissan settlements. CarMax remains a class member for residual funds in the Ford settlement. The Volkswagen settlement has not yet been resolved. We are unable to make a reasonable estimate of the amount or range of gain that could result from CarMax’s participation in the Ford residual or Volkswagen matters.

We are involved in various other legal proceedings in the normal course of business. Based upon our evaluation of information currently available, we believe that the ultimate resolution of any such proceedings will not have a material adverse effect, either individually or in the aggregate, on our financial condition, results of operations or cash flows.

Other Matters.  In accordance with the terms of real estate lease agreements, we generally agree to indemnify the lessor from certain liabilities arising as a result of the use of the leased premises, including environmental liabilities and repairs to leased property upon termination of the lease.  Additionally, in accordance with the terms of agreements entered into for the sale of properties, we generally agree to indemnify the buyer from certain liabilities and costs arising subsequent to the date of the sale, including environmental liabilities and liabilities resulting from the breach of representations or warranties made in accordance with the agreements.  We do not have any known material environmental commitments, contingencies or other indemnification issues arising from these arrangements.

As part of our customer service strategy, we guarantee the used vehicles we retail with a 90-day/4,000 mile limited warranty.  A vehicle in need of repair within this period will be repaired free of charge.  As a result, each vehicle sold has an implied liability associated with it.  Accordingly, based on historical trends, we record a provision for estimated future repairs during the guarantee period for each vehicle sold.  The liability for this guarantee was $31.0 million as of August 31, 2024, and $30.9 million as of February 29, 2024, and is included in accrued expenses and other current liabilities.

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Background Basis of Accounting (Policies)

6 Months Ended

Aug. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background

Business. CarMax, Inc. (“we,” “our,” “us,” “CarMax” and “the company”), including its wholly owned subsidiaries, is the nation’s largest retailer of used vehicles.  We operate in two reportable segments:  CarMax Sales Operations and CarMax Auto Finance (“CAF”).  Our CarMax Sales Operations segment consists of all aspects of our auto merchandising and service operations, excluding financing provided by CAF.  Our CAF segment consists solely of our own finance operation that provides financing to customers buying retail vehicles from CarMax.

On June 1, 2021, we completed the acquisition of Edmunds Holding Company (“Edmunds”). At that time, Edmunds was identified as a non-reportable operating segment and has been presented as “Other” in the Segment Information footnote in our prior period financial statements. Since the acquisition, Edmunds’ business strategy has become increasingly integrated with that of CarMax Sales Operations. Beginning in the first quarter of fiscal 2025, the chief operating decision maker (“CODM”) assessed the financial performance related to Edmunds’ operations together with the rest of the CarMax Sales Operations segment. As a result, as of May 31, 2024, the company realigned its operating segments to be consistent with the manner in which the CODM assesses performance and makes resource allocations. The company now operates in two operating segments, CarMax Sales Operations and CAF, both of which continue to be reportable segments.

The operating segment change did not impact the company’s consolidated financial statements but did impact our previous segment footnote disclosure. The Segment Information footnote is no longer presented, as the previous disclosures were for the purpose of presenting the Edmunds operating segment separate from CarMax Sales Operations. The current and prior period required disclosures related to our reportable segments are included elsewhere within the consolidated financial statements and related footnotes. The performance of our CarMax Sales Operations segment is reviewed by our CODM at the gross profit level, the components of which are presented within the consolidated statement of earnings. The required segment information related to our CAF segment is presented in Note 3. Additionally, asset information by segment is not utilized for purposes of assessing performance or allocating resources and, as a result, such information has not been presented.

We deliver an unrivaled customer experience by offering a broad selection of quality used vehicles and related products and services at competitive, no-haggle prices using a customer-friendly sales process.  Our omni-channel platform, which gives us the largest addressable market in the used car industry, empowers our retail customers to buy a car on their terms – online, in-store or an integrated combination of both. We offer customers a range of related products and services, including the appraisal and purchase of vehicles directly from consumers and dealers; the financing of retail vehicle purchases through CAF and third-party finance providers; the sale of extended protection plan (“EPP”) products, which include extended service plans (“ESPs”) and guaranteed asset protection (“GAP”); advertising and subscription services; and vehicle repair service.  Vehicles purchased through the appraisal process that do not meet our retail standards are sold to licensed dealers through on-site or virtual wholesale auctions.

Basis of Presentation

Basis of Presentation and Use of Estimates. The accompanying interim unaudited consolidated financial statements include the accounts of CarMax and our wholly owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.  These interim unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, such interim consolidated financial statements reflect all normal recurring adjustments considered necessary to present fairly the financial position and the results of operations and cash flows for the interim periods presented.  The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.  

The accounting policies followed in the presentation of our interim financial results are consistent with those included in the company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2024 (the “2024 Annual Report”), with the exception of those related to recent accounting pronouncements adopted in the current fiscal year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in our 2024 Annual Report.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.  Actual results could differ from those estimates.  Certain prior year amounts have been reclassified to conform to the current year’s presentation.  Amounts and percentages may not total due to rounding

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Revenue (Tables)

6 Months Ended

Aug. 31, 2024

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

Disaggregation of Revenue

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2024		2023		2024		2023
Used vehicle sales	$	5,677.1	$	5,591.1	$	11,354.6	$	11,592.6
Wholesale vehicle sales	1,154.5		1,322.0		2,410.9		2,836.3
Other sales and revenues:
Extended protection plan revenues	121.4		101.7		240.2		212.9
Third-party finance income/(fees), net	1.4		(1.5)		(0.2)		(1.2)
Advertising & subscription revenues (1)	34.3		33.5		69.0		64.9
Service revenues	21.7		21.4		44.4		43.5
Other	3.2		5.6		8.1		11.8
Total other sales and revenues	182.0		160.7		361.5		331.9
Total net sales and operating revenues	$	7,013.5	$	7,073.8	$	14,126.9	$	14,760.9

(1)    Excludes intercompany sales and operating revenues that have been eliminated in consolidation.

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CarMax Auto Finance (Tables)

6 Months Ended

Aug. 31, 2024

CarMax Auto Finance Income [Abstract]

Components Of CarMax Auto Finance Income

Components of CAF Income

	Three Months Ended August 31						Six Months Ended August 31
(In millions)	2024		% (1)	2023		% (1)	2024		% (1)	2023		% (1)
Interest margin:
Interest and fee income	$	464.5	10.5	$	416.9	9.6	$	917.0	10.4	$	817.4	9.5
Interest expense	(193.7)		(4.4)	(152.0)		(3.5)	(376.0)		(4.3)	(294.6)		(3.4)
Total interest margin	270.8		6.1	264.9		6.1	541.0		6.1	522.8		6.1
Provision for loan losses	(112.6)		(2.5)	(89.8)		(2.1)	(193.8)		(2.2)	(170.7)		(2.0)
Total interest margin after provision for loan losses	158.2		3.6	175.1		4.0	347.2		3.9	352.1		4.1
Direct expenses:
Payroll and fringe benefit expense	(19.0)		(0.4)	(16.8)		(0.4)	(37.6)		(0.4)	(33.4)		(0.4)
Depreciation and amortization	(4.3)		(0.1)	(4.1)		(0.1)	(8.5)		(0.1)	(8.2)		(0.1)
Other direct expenses	(19.3)		(0.4)	(19.3)		(0.4)	(38.5)		(0.4)	(38.2)		(0.4)
Total direct expenses	(42.6)		(1.0)	(40.2)		(0.9)	(84.6)		(1.0)	(79.8)		(0.9)
CarMax Auto Finance income	$	115.6	2.6	$	135.0	3.1	$	262.6	3.0	$	272.3	3.2
Total average managed receivables	$	17,728.8		$	17,315.6		$	17,640.0		$	17,159.5

(1)    Annualized percentage of total average managed receivables.

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Auto Loan Receivables (Tables)

6 Months Ended

Aug. 31, 2024

Receivables [Abstract]

Auto Loan Receivables, Net

Auto Loans Receivable, Net

	As of August 31		As of February 29
(In millions)	2024		2024
Asset-backed term funding	$	12,801.5	$	12,638.2
Warehouse facilities	3,743.6		3,744.6
Overcollateralization (1)	775.9		790.9
Other managed receivables (2)	448.4		218.1
Total ending managed receivables	17,769.4		17,391.8
Accrued interest and fees	103.6		90.9
Other	41.4		11.9
Less: allowance for loan losses	(500.8)		(482.8)
Auto loans receivable, net	$	17,413.6	$	17,011.8

(1)    Represents receivables restricted as excess collateral for the non-recourse funding vehicles.

(2)    Other managed receivables includes receivables not funded through the non-recourse funding vehicles.

Ending Managed Receivables By Major Credit Grade

Ending Managed Receivables by Major Credit Grade

	As of August 31, 2024
	Fiscal Year of Origination (1)
(In millions)	2025		2024		2023		2022		2021		Prior to 2021		Total		% (2)
Core managed receivables (3):
A	$	2,432.5	$	3,204.6	$	2,137.6	$	1,237.3	$	410.1	$	139.3	$	9,561.4	53.8
B	1,194.6		1,987.3		1,432.4		968.0		358.6		155.7		6,096.6		34.3
C and other	252.0		330.0		404.1		314.3		141.6		66.8		1,508.8		8.5
Total core managed receivables	3,879.1		5,521.9		3,974.1		2,519.6		910.3		361.8		17,166.8		96.6
Other managed receivables (4):
C and other	167.8		214.0		144.2		58.3		7.1		11.2		602.6		3.4
Total ending managed receivables	$	4,046.9	$	5,735.9	$	4,118.3	$	2,577.9	$	917.4	$	373.0	$	17,769.4	100.0
Gross charge-offs	$	3.9	$	97.7	$	106.5	$	59.6	$	16.9	$	12.3	$	296.9

	As of February 29, 2024
	Fiscal Year of Origination (1)
(In millions)	2024		2023		2022		2021		2020		Prior to 2020		Total		% (2)
Core managed receivables (3):
A	$	3,922.7	$	2,660.6	$	1,635.1	$	614.0	$	268.7	$	40.0	$	9,141.1	52.6
B	2,370.8		1,738.8		1,225.9		493.3		233.4		61.3		6,123.5		35.2
C and other	344.1		498.6		400.3		192.2		86.6		26.9		1,548.7		8.9
Total core managed receivables	6,637.6		4,898.0		3,261.3		1,299.5		588.7		128.2		16,813.3		96.7
Other managed receivables (4):
C and other	299.0		176.3		72.6		9.3		12.1		9.2		578.5		3.3
Total ending managed receivables	$	6,936.6	$	5,074.3	$	3,333.9	$	1,308.8	$	600.8	$	137.4	$	17,391.8	100.0
Gross charge-offs	$	111.0	$	248.6	$	129.8	$	41.0	$	19.7	$	11.4	$	561.5

(1)    Classified based on credit grade assigned when customers were initially approved for financing.

(2)    Percent of total ending managed receivables.

(3)    Represents CAF’s Tier 1 originations.

(4)    Represents CAF’s Tier 2 and Tier 3 originations.

Allowance For Loan Losses

Allowance for Loan Losses

	Three Months Ended August 31, 2024
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	396.6	$	96.5	$	493.1	2.79
Charge-offs	(131.1)		(32.7)		(163.8)
Recoveries (2)	52.1		6.8		58.9
Provision for loan losses	99.7		12.9		112.6
Balance as of end of period	$	417.3	$	83.5	$	500.8	2.82

	Three Months Ended August 31, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	427.5	$	107.9	$	535.4	3.11
Charge-offs	(118.7)		(24.5)		(143.2)
Recoveries (2)	48.5		7.5		56.0
Provision for loan losses	75.7		14.1		89.8
Balance as of end of period	$	433.0	$	105.0	$	538.0	3.08

	Six Months Ended August 31, 2024
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	389.7	$	93.1	$	482.8	2.78
Charge-offs	(244.1)		(52.8)		(296.9)
Recoveries (2)	106.0		15.1		121.1
Provision for loan losses	165.7		28.1		193.8
Balance as of end of period	$	417.3	$	83.5	$	500.8	2.82

	Six Months Ended August 31, 2023
(In millions)	Core		Other		Total		% (1)
Balance as of beginning of period	$	401.5	$	105.7	$	507.2	3.02
Charge-offs	(211.8)		(41.2)		(253.0)
Recoveries (2)	99.0		14.1		113.1
Provision for loan losses	144.3		26.4		170.7
Balance as of end of period	$	433.0	$	105.0	$	538.0	3.08

(1)    Percent of total ending managed receivables.

(2)    Net of costs incurred to recover vehicle.

Past Due Receivables

Past Due Receivables

	As of August 31, 2024
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,506.6	$	5,609.7	$	1,204.3	$	16,320.6	$	465.1	$	16,785.7	94.47
Delinquent loans:
31-60 days past due	33.1		279.3		160.2		472.6		68.6		541.2		3.04
61-90 days past due	16.6		170.4		122.0		309.0		58.3		367.3		2.07
Greater than 90 days past due	5.1		37.2		22.3		64.6		10.6		75.2		0.42
Total past due	54.8		486.9		304.5		846.2		137.5		983.7		5.53
Total ending managed receivables	$	9,561.4	$	6,096.6	$	1,508.8	$	17,166.8	$	602.6	$	17,769.4	100.00

	As of February 29, 2024
	Core Receivables								Other Receivables		Total
(In millions)	A		B		C & Other		Total		C & Other		$		% (1)
Current	$	9,088.1	$	5,666.3	$	1,243.7	$	15,998.1	$	447.1	$	16,445.2	94.56
Delinquent loans:
31-60 days past due	32.1		271.3		162.9		466.3		68.1		534.4		3.07
61-90 days past due	15.1		149.4		118.5		283.0		53.0		336.0		1.93
Greater than 90 days past due	5.8		36.5		23.6		65.9		10.3		76.2		0.44
Total past due	53.0		457.2		305.0		815.2		131.4		946.6		5.44
Total ending managed receivables	$	9,141.1	$	6,123.5	$	1,548.7	$	16,813.3	$	578.5	$	17,391.8	100.00

(1)    Percent of total ending managed receivables.

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Fair Value Measurements (Tables)

6 Months Ended

Aug. 31, 2024

Fair Value Disclosures [Abstract]

Schedule Of Items Measured At Fair Value On A Recurring Basis

Items Measured at Fair Value on a Recurring Basis

	As of August 31, 2024
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,166,588		$	—		$	1,166,588
Mutual fund investments	28,185			—			28,185
Derivative instruments designated as hedges	—			16,100			16,100
Derivative instruments not designated as hedges	—			5,351			5,351
Total assets at fair value	$	1,194,773		$	21,451		$	1,216,224
Percent of total assets at fair value	98.2		%	1.8		%	100.0		%
Percent of total assets	4.4		%	0.1		%	4.5		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(23,868)		$	(23,868)
Total liabilities at fair value	$	—		$	(23,868)		$	(23,868)
Percent of total liabilities	—		%	0.1		%	0.1		%

	As of February 29, 2024
(In thousands)	Level 1			Level 2			Total
Assets:
Money market securities	$	1,164,270		$	—		$	1,164,270
Mutual fund investments	24,312			—			24,312
Derivative instruments designated as hedges	—			45,761			45,761
Derivative instruments not designated as hedges	—			13,064			13,064
Total assets at fair value	$	1,188,582		$	58,825		$	1,247,407
Percent of total assets at fair value	95.3		%	4.7		%	100.0		%
Percent of total assets	4.4		%	0.2		%	4.6		%
Liabilities:
Derivative instruments designated as hedges	$	—		$	(2,302)		$	(2,302)
Total liabilities at fair value	$	—		$	(2,302)		$	(2,302)
Percent of total liabilities	—		%	—		%	—		%

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

(In thousands)	As of August 31, 2024		As of February 29, 2024
Carrying value	$	400,000	$	400,000
Fair value	$	388,795	$	380,249

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Cancellation Reserves (Tables)

6 Months Ended

Aug. 31, 2024

Cancellation Reserves [Abstract]

Schedule Of Cancellation Reserves Accrual

Cancellation Reserves

	Three Months Ended August 31				Six Months Ended August 31
(In millions)	2024		2023		2024		2023
Balance as of beginning of period	$	131.3	$	138.7	$	128.3	$	139.2
Cancellations	(22.6)		(23.2)		(43.9)		(47.8)
Provision for future cancellations	25.0		21.1		49.3		45.2
Balance as of end of period	$	133.7	$	136.6	$	133.7	$	136.6

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Debt (Tables)

6 Months Ended

Aug. 31, 2024

Debt Disclosure [Abstract]

Schedule Of Debt

(In thousands)		As of August 31		As of February 29
Debt Description (1)	Maturity Date	2024		2024
Revolving credit facility (2)	June 2028	$	—	$	—
Term loan (2)	June 2024	—		300,000
Term loan (2)	October 2026	699,703		699,633
4.17% Senior notes	April 2026	200,000		200,000
4.27% Senior notes	April 2028	200,000		200,000
Financing obligations	Various dates through February 2059	510,744		516,544
Non-recourse notes payable	Various dates through January 2031	17,095,229		16,866,972
Total debt		18,705,676		18,783,149
Less: current portion		(571,816)		(797,449)
Less: unamortized debt issuance costs		(28,657)		(26,044)
Long-term debt, net		$	18,105,203	$	17,959,656

(1)    Interest is payable monthly, with the exception of our senior notes, which are payable semi-annually.

(2)    Borrowings accrue interest at variable rates based on SOFR, the federal funds rate, or the prime rate, depending on the type of borrowing.

Schedule of Funding Vehicles [Table Text Block]

(In billions)	Capacity
Warehouse facilities:
December 2024 expiration	$	0.70
March 2025 expiration	3.10
August 2025 expiration	2.30
Combined warehouse facility limit	$	6.10
Unused capacity	$	2.36
Non-recourse notes payable outstanding:
Warehouse facilities	$	3.74
Asset-backed term funding transactions	13.36
Non-recourse notes payable	$	17.10

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Stock and Stock-Based Incentive Plans (Tables)

6 Months Ended

Aug. 31, 2024

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Schedule of Common Stock Repurchases

Common Stock Repurchases

	Three Months Ended				Six Months Ended
	August 31				August 31
	2024		2023		2024		2023
Number of shares repurchased (in thousands)	1,376.7		—		2,822.4		—
Average cost per share	$	77.04	$	—	$	74.41	$	—
Available for repurchase, as of end of period (in millions)	$	2,150.1	$	2,451.3	$	2,150.1	$	2,451.3

Composition of Share-Based Compensation Expense

Composition of Share-Based Compensation Expense

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2024		2023		2024		2023
Cost of sales	$	1,639	$	1,195	$	2,648	$	2,585
CarMax Auto Finance income	1,449		1,198		2,134		1,647
Selling, general and administrative expenses	32,133		31,294		79,234		66,598
Share-based compensation expense, before income taxes	$	35,221	$	33,687	$	84,016	$	70,830

Composition Of Share-Based Compensation Expense - By Grant Type

Composition of Share-Based Compensation Expense – By Grant Type

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands)	2024		2023		2024		2023
Nonqualified stock options	$	9,174	$	13,650	$	28,118	$	27,727
Cash-settled restricted stock units (RSUs)	17,277		12,804		28,667		27,915
Stock-settled market stock units (MSUs)	4,187		3,884		11,767		10,108
Other share-based incentives:
Stock-settled performance stock units (PSUs)	2,117		797		12,301		1,538
Restricted stock (RSAs)	—		76		—		307
Stock-settled deferred stock units (DSUs)	1,850		1,850		1,850		1,850
Employee stock purchase plan	616		626		1,313		1,385
Total other share-based incentives	$	4,583	$	3,349	$	15,464	$	5,080
Share-based compensation expense, before income taxes	$	35,221	$	33,687	$	84,016	$	70,830

Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award

Share/Unit Activity

	Six Months Ended August 31, 2024
	Equity Classified						Liability Classified
(Shares/units in thousands)	Options		MSUs		Other		RSUs
Outstanding as of February 29, 2024	7,393		383		195		1,297
Granted	1,230		238		263		918
Exercised or vested and converted	(485)		(75)		(47)		(556)
Cancelled	(111)		(11)		—		(65)
Outstanding as of August 31, 2024	8,027		535		411		1,594
Weighted average grant date fair value per share/unit:
Granted	$	29.20	$	95.73	$	69.43	$	67.22
Ending outstanding	$	28.07	$	104.28	$	75.26	$	71.19
	As of August 31, 2024
Unrecognized compensation (in millions)	$	46.6	$	24.5	$	4.7

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Net Earnings Per Share (Tables)

6 Months Ended

Aug. 31, 2024

Earnings Per Share [Abstract]

Basic And Dilutive Net Earnings Per Share Reconciliations

Basic and Dilutive Net Earnings Per Share Reconciliations

	Three Months Ended				Six Months Ended
	August 31				August 31
(In thousands except per share data)	2024		2023		2024		2023
Net earnings	$	132,809	$	118,635	$	285,249	$	346,933
Weighted average common shares outstanding	155,866		158,479		156,513		158,298
Dilutive potential common shares:
Stock options	349		581		316		373
Stock-settled stock units and awards	311		178		287		229
Weighted average common shares and dilutive potential common shares	156,526		159,238		157,116		158,900
Basic net earnings per share	$	0.85	$	0.75	$	1.82	$	2.19
Diluted net earnings per share	$	0.85	$	0.75	$	1.82	$	2.18

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Aug. 31, 2024

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Changes In Accumulated Other Comprehensive Loss By Component

Changes in Accumulated Other Comprehensive Income By Component

					Total
	Net		Net		Accumulated
	Unrecognized		Unrecognized		Other
	Actuarial		Hedge		Comprehensive
(In thousands, net of income taxes)	Losses		Gains		Income
Balance as of February 29, 2024	$	(37,116)	$	96,395	$	59,279
Other comprehensive loss before reclassifications	—		(28,828)		(28,828)
Amounts reclassified from accumulated other comprehensive income	169		(21,563)		(21,394)
Other comprehensive income (loss)	169		(50,391)		(50,222)
Balance as of August 31, 2024	$	(36,947)	$	46,004	$	9,057

Changes In And Reclassifications Out Of Accumulated Other Comprehensive Loss

Changes In and Reclassifications Out of Accumulated Other Comprehensive Income

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2024		2023		2024		2023
Retirement Benefit Plans:
Actuarial loss amortization reclassifications recognized in net pension expense:
Cost of sales	$	49	$	58	$	99	$	116
CarMax Auto Finance income	3		3		7		7
Selling, general and administrative expenses	58		68		115		135
Total amortization reclassifications recognized in net pension expense	110		129		221		258
Tax expense	(25)		(31)		(52)		(62)
Amortization reclassifications recognized in net pension expense, net of tax	85		98		169		196
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	85		98		169		196
Cash Flow Hedges (Note 5):
Changes in fair value	(55,748)		35,002		(38,239)		(1,005)
Tax benefit (expense)	13,639		(8,535)		9,411		336
Changes in fair value, net of tax	(42,109)		26,467		(28,828)		(669)
Reclassifications to CarMax Auto Finance income	(14,010)		(12,295)		(28,508)		(24,859)
Tax benefit	3,413		2,997		6,945		6,060
Reclassification of hedge gains, net of tax	(10,597)		(9,298)		(21,563)		(18,799)
Net change in cash flow hedge unrecognized gains, net of tax	(52,706)		17,169		(50,391)		(19,468)
Total other comprehensive (loss) income, net of tax	$	(52,621)	$	17,267	$	(50,222)	$	(19,272)

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Leases (Tables)

6 Months Ended

Aug. 31, 2024

Leases [Abstract]

Lease, Cost [Table Text Block]

	Three Months Ended August 31				Six Months Ended August 31
(In thousands)	2024		2023		2024		2023
Operating lease cost (1)	$	22,873	$	22,239	$	46,101	$	44,186
Finance lease cost:
Depreciation of lease assets	2,976		4,907		6,798		9,442
Interest on lease liabilities	6,920		6,407		13,591		12,502
Total finance lease cost	9,896		11,314		20,389		21,944
Total lease cost	$	32,769	$	33,553	$	66,490	$	66,130

(1)    Includes short-term leases and variable lease costs, which are immaterial.

Supplemental Balance Sheet Disclosures [Text Block]

		As of August 31		As of February 29
(In thousands)	Classification	2024		2024
Assets:
Operating lease assets	Operating lease assets	$	495,783	$	520,717
Finance lease assets	Property and equipment, net (1)	191,774		174,998
Total lease assets		$	687,557	$	695,715
Liabilities:
Current:
Operating leases	Current portion of operating lease liabilities	$	57,959	$	57,161
Finance leases	Accrued expenses and other current liabilities	23,608		20,877
Long-term:
Operating leases	Operating lease liabilities, excluding current portion	473,158		496,210
Finance leases	Other liabilities	211,590		198,759
Total lease liabilities		$	766,315	$	773,007

(1)    Finance lease assets are recorded net of accumulated depreciation of $62.3 million as of August 31, 2024 and $55.5 million as of February 29, 2024.

Other Lease Disclosures [Table Text Block]

	As of August 31		As of February 29
Lease Term and Discount Rate	2024		2024
Weighted Average Remaining Lease Term (in years)
Operating leases	16.01		16.07
Finance leases	13.17		11.43
Weighted Average Discount Rate
Operating leases	5.10	%	5.05	%
Finance leases	15.79	%	17.16	%

	Six Months Ended August 31
(In thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	47,610	$	44,182
Operating cash flows from finance leases	$	12,642	$	12,076
Financing cash flows from finance leases	$	9,056	$	7,810
Lease assets obtained in exchange for lease obligations:
Operating leases	$	4,189	$	22,277
Finance leases	$	24,497	$	43,684

Schedule Of Future Minimum Lease Obligations [Table Text Block]

	As of August 31, 2024
(In thousands)	Operating Leases (1)		Finance Leases (1)
Fiscal 2025, remaining	$	42,579	$	21,194
Fiscal 2026	78,928		48,763
Fiscal 2027	72,607		45,167
Fiscal 2028	68,493		38,332
Fiscal 2029	46,682		31,118
Thereafter	518,131		288,506
Total lease payments	827,420		473,080
Less: interest	(296,303)		(237,882)
Present value of lease liabilities	$	531,117	$	235,198

(1)    Lease payments exclude $4.7 million of legally binding minimum lease payments for leases signed but not yet commenced.

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Background (Narrative) (Details)	6 Months Ended
	Aug. 31, 2024 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reportable segments	2

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Revenue (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 7,013.5	$ 7,073.8	$ 14,126.9	$ 14,760.9
Used vehicle sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	5,677.1	5,591.1	11,354.6	11,592.6
Wholesale vehicle sales
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1,154.5	1,322.0	2,410.9	2,836.3
Extended protection plan revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	121.4	101.7	240.2	212.9
Third-party finance income/(fees), net
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	1.4	(1.5)	(0.2)	(1.2)
Advertising & subscription revenues [Domain]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	34.3	33.5	69.0	64.9
Service revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	21.7	21.4	44.4	43.5
Other
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	3.2	5.6	8.1	11.8
Total other sales and revenues
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	$ 182.0	$ 160.7	$ 361.5	$ 331.9

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CarMax Auto Finance (Components Of CarMax Auto Finance Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Auto Finance Income [Line Items]
Interest and fee income	$ 464,500	$ 416,900	$ 917,000	$ 817,400
Interest expense	(193,700)	(152,000)	(376,000)	(294,600)
Total interest margin	270,800	264,900	541,000	522,800
Provision for loan losses	(112,600)	(89,800)	(193,800)	(170,700)
Total interest margin after provision for loan losses	158,200	175,100	347,200	352,100
Payroll and fringe benefit expense	(19,000)	(16,800)	(37,600)	(33,400)
Other Depreciation and Amortization	(4,300)	(4,100)	(8,500)	(8,200)
Other direct expenses	(19,300)	(19,300)	(38,500)	(38,200)
Total direct expenses	(42,600)	(40,200)	(84,600)	(79,800)
CarMax Auto Finance income	115,580	134,987	262,550	272,345
Total average managed receivables	$ 17,728,800	$ 17,315,600	$ 17,640,000	$ 17,159,500
Interest and fee income, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	10.50%	9.60%	10.40%	9.50%
Interest expense, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(4.40%)	(3.50%)	(4.30%)	(3.40%)
Total interest margin, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	6.10%	6.10%	6.10%	6.10%
Provision for loan losses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(2.50%)	(2.10%)	(2.20%)	(2.00%)
Total interest margin after provision for loan losses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	3.60%	4.00%	3.90%	4.10%
Payroll and fringe benefit expense, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.40%)	(0.40%)	(0.40%)	(0.40%)
Other Depreciation and Amortization
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.10%)	(0.10%)	(0.10%)	(0.10%)
Other direct expenses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(0.40%)	(0.40%)	(0.40%)	(0.40%)
Total direct expenses, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	(1.00%)	(0.90%)	(1.00%)	(0.90%)
CarMax Auto Finance income, percent
Auto Finance Income [Line Items]
Item as percent of total average managed receivables	2.60%	3.10%	3.00%	3.20%

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Auto Loan Receivables (Auto Loan Receivables, Net) (Details) - USD ($) $ in Thousands	Aug. 31, 2024	May 31, 2024	Feb. 29, 2024	Aug. 31, 2023	May 31, 2023	Feb. 28, 2023
Non-recourse Notes Payable	$ 17,095,229		$ 16,866,972
Financing Receivable, before Allowance for Credit Loss	17,769,400		17,391,800
Interest Receivable	103,600		90,900
Other	41,400		11,900
Financing Receivable, Allowance for Credit Loss	500,834	$ 493,100	482,790	$ 538,000	$ 535,400	$ 507,200
Financing Receivable, after Allowance for Credit Loss	17,413,589		17,011,844
Asset-backed term funding
Financing Receivable, before Allowance for Credit Loss	12,801,500		12,638,200
Warehouse facilities
Financing Receivable, before Allowance for Credit Loss	3,743,600		3,744,600
Overcollateralization
Financing Receivable, before Allowance for Credit Loss	775,900		790,900
Other managed receivables
Financing Receivable, before Allowance for Credit Loss	$ 448,400		$ 218,100

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Auto Loan Receivables (Ending Managed Receivables By Major Credit Grade) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023	Feb. 29, 2024
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 4,046.9		$ 4,046.9		$ 6,936.6
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	5,735.9		5,735.9		5,074.3
Financing Receivable, Originated Two Years before Latest Fiscal Year	4,118.3		4,118.3		3,333.9
Financing Receivable, Originated Three Years before Latest Fiscal Year	2,577.9		2,577.9		1,308.8
Financing Receivable, Originated Four Years before Latest Fiscal Year	917.4		917.4		600.8
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	373.0		373.0		137.4
Financing Receivable, before Allowance for Credit Loss	$ 17,769.4		$ 17,769.4		$ 17,391.8
Total ending managed receivables as percentage by major credit grade	100.00%		100.00%		100.00%
Financing Receivable, Allowance for Credit Loss, Writeoff	$ 163.8	$ 143.2	$ 296.9	$ 253.0	$ 561.5
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			106.5		129.8
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			97.7		248.6
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			59.6		41.0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			16.9		19.7
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			12.3		11.4
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			3.9		111.0
Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	3,879.1		3,879.1		6,637.6
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	5,521.9		5,521.9		4,898.0
Financing Receivable, Originated Two Years before Latest Fiscal Year	3,974.1		3,974.1		3,261.3
Financing Receivable, Originated Three Years before Latest Fiscal Year	2,519.6		2,519.6		1,299.5
Financing Receivable, Originated Four Years before Latest Fiscal Year	910.3		910.3		588.7
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	361.8		361.8		128.2
Financing Receivable, before Allowance for Credit Loss	$ 17,166.8		$ 17,166.8		$ 16,813.3
Total ending managed receivables as percentage by major credit grade	96.60%		96.60%		96.70%
Financing Receivable, Allowance for Credit Loss, Writeoff	$ 131.1	118.7	$ 244.1	211.8
Other managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Allowance for Credit Loss, Writeoff	32.7	$ 24.5	52.8	$ 41.2
Credit Grade A | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	2,432.5		2,432.5		$ 3,922.7
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	3,204.6		3,204.6		2,660.6
Financing Receivable, Originated Two Years before Latest Fiscal Year	2,137.6		2,137.6		1,635.1
Financing Receivable, Originated Three Years before Latest Fiscal Year	1,237.3		1,237.3		614.0
Financing Receivable, Originated Four Years before Latest Fiscal Year	410.1		410.1		268.7
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	139.3		139.3		40.0
Financing Receivable, before Allowance for Credit Loss	$ 9,561.4		$ 9,561.4		$ 9,141.1
Total ending managed receivables as percentage by major credit grade	53.80%		53.80%		52.60%
Credit Grade B | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 1,194.6		$ 1,194.6		$ 2,370.8
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	1,987.3		1,987.3		1,738.8
Financing Receivable, Originated Two Years before Latest Fiscal Year	1,432.4		1,432.4		1,225.9
Financing Receivable, Originated Three Years before Latest Fiscal Year	968.0		968.0		493.3
Financing Receivable, Originated Four Years before Latest Fiscal Year	358.6		358.6		233.4
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	155.7		155.7		61.3
Financing Receivable, before Allowance for Credit Loss	$ 6,096.6		$ 6,096.6		$ 6,123.5
Total ending managed receivables as percentage by major credit grade	34.30%		34.30%		35.20%
Credit Grade C And Other | Core managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 252.0		$ 252.0		$ 344.1
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	330.0		330.0		498.6
Financing Receivable, Originated Two Years before Latest Fiscal Year	404.1		404.1		400.3
Financing Receivable, Originated Three Years before Latest Fiscal Year	314.3		314.3		192.2
Financing Receivable, Originated Four Years before Latest Fiscal Year	141.6		141.6		86.6
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	66.8		66.8		26.9
Financing Receivable, before Allowance for Credit Loss	$ 1,508.8		$ 1,508.8		$ 1,548.7
Total ending managed receivables as percentage by major credit grade	8.50%		8.50%		8.90%
Credit Grade C And Other | Other managed receivables
Financing Receivable, By Major Credit Grade [Line Items]
Financing Receivable, Originated in Current Fiscal Year	$ 167.8		$ 167.8		$ 299.0
Financing Receivable, Originated in Fiscal Year before Latest Fiscal Year	214.0		214.0		176.3
Financing Receivable, Originated Two Years before Latest Fiscal Year	144.2		144.2		72.6
Financing Receivable, Originated Three Years before Latest Fiscal Year	58.3		58.3		9.3
Financing Receivable, Originated Four Years before Latest Fiscal Year	7.1		7.1		12.1
Financing Receivable, Originated Five or More Years before Latest Fiscal Year	11.2		11.2		9.2
Financing Receivable, before Allowance for Credit Loss	$ 602.6		$ 602.6		$ 578.5
Total ending managed receivables as percentage by major credit grade	3.40%		3.40%		3.30%

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Auto Loan Receivables (Allowance for Loan Losses) (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023	Feb. 29, 2024	May 31, 2024	May 31, 2023	Feb. 28, 2023
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	$ 500,834,000	$ 538,000,000.0	$ 500,834,000	$ 538,000,000.0	$ 482,790,000	$ 493,100,000	$ 535,400,000	$ 507,200,000
Financing Receivable, Allowance for Credit Loss, Writeoff	(163,800,000)	(143,200,000)	(296,900,000)	(253,000,000.0)	$ (561,500,000)
Financing Receivable, Allowance for Credit Loss, Recovery	58,900,000	56,000,000.0	121,100,000	113,100,000
Provision for Loan, Lease, and Other Losses	$ 112,600,000	$ 89,800,000	193,800,000	$ 170,700,000
Item As Percent Of Total Ending Managed Receivables, Period Increase (Decrease)			$ 4
Allowance For Loan Losses, percent
Financing Receivable, Allowance for Credit Loss [Line Items]
Item as percent of total ending managed receivables	2.82%	3.08%	2.82%	3.08%	2.78%	2.79%	3.11%	3.02%
Core managed receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	$ 417,300,000	$ 433,000,000.0	$ 417,300,000	$ 433,000,000.0	$ 389,700,000	$ 396,600,000	$ 427,500,000	$ 401,500,000
Financing Receivable, Allowance for Credit Loss, Writeoff	(131,100,000)	(118,700,000)	(244,100,000)	(211,800,000)
Financing Receivable, Allowance for Credit Loss, Recovery	52,100,000	48,500,000	106,000,000.0	99,000,000.0
Provision for Loan, Lease, and Other Losses	99,700,000	75,700,000	165,700,000	144,300,000
Other managed receivables
Financing Receivable, Allowance for Credit Loss [Line Items]
Financing Receivable, Allowance for Credit Loss	83,500,000	105,000,000.0	83,500,000	105,000,000.0	$ 93,100,000	$ 96,500,000	$ 107,900,000	$ 105,700,000
Financing Receivable, Allowance for Credit Loss, Writeoff	(32,700,000)	(24,500,000)	(52,800,000)	(41,200,000)
Financing Receivable, Allowance for Credit Loss, Recovery	6,800,000	7,500,000	15,100,000	14,100,000
Provision for Loan, Lease, and Other Losses	$ 12,900,000	$ 14,100,000	$ 28,100,000	$ 26,400,000

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Auto Loan Receivables (Past Due Receivables) (Details) - USD ($) $ in Millions	Aug. 31, 2024	Feb. 29, 2024
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	$ 16,785.7	$ 16,445.2
Past due receivables as a percentage of total ending managed receivables	5.53%	5.44%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 983.7	$ 946.6
Financing Receivable, before Allowance for Credit Loss	$ 17,769.4	$ 17,391.8
Item As A Percent Of Total Ending Managed Receivables	100.00%	100.00%
One to Thirty Days Past Due
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	94.47%	94.56%
Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	3.04%	3.07%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 541.2	$ 534.4
Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	2.07%	1.93%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 367.3	$ 336.0
Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Past due receivables as a percentage of total ending managed receivables	0.42%	0.44%
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 75.2	$ 76.2
Core managed receivables
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	16,320.6	15,998.1
Financing Receivable, before Allowance for Credit Loss, Noncurrent	846.2	815.2
Financing Receivable, before Allowance for Credit Loss	17,166.8	16,813.3
Core managed receivables | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	472.6	466.3
Core managed receivables | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	309.0	283.0
Core managed receivables | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	64.6	65.9
Core managed receivables | Credit Grade A
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	9,506.6	9,088.1
Financing Receivable, before Allowance for Credit Loss, Noncurrent	54.8	53.0
Financing Receivable, before Allowance for Credit Loss	9,561.4	9,141.1
Core managed receivables | Credit Grade A | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	33.1	32.1
Core managed receivables | Credit Grade A | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	16.6	15.1
Core managed receivables | Credit Grade A | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	5.1	5.8
Core managed receivables | Credit Grade B
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	5,609.7	5,666.3
Financing Receivable, before Allowance for Credit Loss, Noncurrent	486.9	457.2
Financing Receivable, before Allowance for Credit Loss	6,096.6	6,123.5
Core managed receivables | Credit Grade B | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	279.3	271.3
Core managed receivables | Credit Grade B | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	170.4	149.4
Core managed receivables | Credit Grade B | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	37.2	36.5
Core managed receivables | Credit Grade C And Other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	1,204.3	1,243.7
Financing Receivable, before Allowance for Credit Loss, Noncurrent	304.5	305.0
Financing Receivable, before Allowance for Credit Loss	1,508.8	1,548.7
Core managed receivables | Credit Grade C And Other | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	160.2	162.9
Core managed receivables | Credit Grade C And Other | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	122.0	118.5
Core managed receivables | Credit Grade C And Other | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	22.3	23.6
Other managed receivables | Credit Grade C And Other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Current	465.1	447.1
Financing Receivable, before Allowance for Credit Loss, Noncurrent	137.5	131.4
Financing Receivable, before Allowance for Credit Loss	602.6	578.5
Other managed receivables | Credit Grade C And Other | Thirty One To Sixty Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	68.6	68.1
Other managed receivables | Credit Grade C And Other | Sixty One To Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	58.3	53.0
Other managed receivables | Credit Grade C And Other | Greater Than Ninety Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss, Noncurrent	$ 10.6	$ 10.3

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Derivative Instruments And Hedging Activities (Narrative) (Details) - Interest Rate Swaps - Cash Flow Hedging - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Aug. 31, 2024	Aug. 31, 2024	Feb. 29, 2024
Designated As Hedging Instrument
Derivative [Line Items]
Additional reclassification from AOCL to CAF income within the next 12 months		$ 35.0
Derivative, Notional Amount	$ 5,120.0	5,120.0	$ 5,210.0
Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Derivative, Gain (Loss) on Derivative, Net	(4.6)	(7.7)
Derivative, Notional Amount	$ 386.1	$ 386.1	$ 704.0

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Fair Value Measurements (Schedule Of Items Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands	Aug. 31, 2024	Feb. 29, 2024
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market securities	$ 1,166,588	$ 1,164,270
Mutual fund investments	28,185	24,312
Total assets at fair value	$ 1,216,224	$ 1,247,407
Percent of total assets at fair value	100.00%	100.00%
Percent of total assets	4.50%	4.60%
Total liabilities at fair value	$ (23,868)	$ (2,302)
Percent of total liabilities	0.10%	0.00%
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market securities	$ 1,166,588	$ 1,164,270
Mutual fund investments	28,185	24,312
Total assets at fair value	$ 1,194,773	$ 1,188,582
Percent of total assets at fair value	98.20%	95.30%
Percent of total assets	4.40%	4.40%
Total liabilities at fair value	$ 0	$ 0
Percent of total liabilities	0.00%	0.00%
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market securities	$ 0	$ 0
Mutual fund investments	0	0
Total assets at fair value	$ 21,451	$ 58,825
Percent of total assets at fair value	1.80%	4.70%
Percent of total assets	0.10%	0.20%
Total liabilities at fair value	$ (23,868)	$ (2,302)
Percent of total liabilities	0.10%	0.00%
Designated As Hedging Instrument
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	$ 16,100	$ 45,761
Liabilities: Derivative instruments	(23,868)	(2,302)
Designated As Hedging Instrument | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	0	0
Liabilities: Derivative instruments	0	0
Designated As Hedging Instrument | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	16,100	45,761
Liabilities: Derivative instruments	(23,868)	(2,302)
Not Designated as Hedging Instrument [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	5,351	13,064
Not Designated as Hedging Instrument [Member] | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	0	0
Not Designated as Hedging Instrument [Member] | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	$ 5,351	$ 13,064

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Fair Value Measurements Fair Value Measurements (Schedule of Carrying Values and Estimated Fair Values of Debt Instruments) (Details) - USD ($) $ in Thousands	Aug. 31, 2024	Feb. 29, 2024
Fair Value Disclosures [Abstract]
Senior Notes	$ 400,000	$ 400,000
Debt Instrument, Fair Value Disclosure	$ 388,795	$ 380,249

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Cancellation Reserves (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2024	Feb. 29, 2024
Cancellation Reserves [Abstract]
Cancellation reserves, current portion	$ 72.3	$ 69.7

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Cancellation Reserves (Schedule Of Cancellation Reserves Accrual) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance as of beginning of period	$ 131.3	$ 138.7	$ 128.3	$ 139.2
Cancellations	(22.6)	(23.2)	(43.9)	(47.8)
Provision for future cancellations	25.0	21.1	49.3	45.2
Balance as of end of period	$ 133.7	$ 136.6	$ 133.7	$ 136.6

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2024	Feb. 29, 2024
Federal Income Tax Note
Unrecognized tax benefits, gross	$ 31.3	$ 28.8
Decrease in Unrecognized Tax Benefits is Reasonably Possible	$ 14.0

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Debt (Schedule Of Debt) (Details) - USD ($) $ in Thousands	Aug. 31, 2024	Feb. 29, 2024
Debt Instrument [Line Items]
Long-term Debt	$ 18,105,203	$ 17,959,656
Financing Obligations	510,744	516,544
Non-recourse Notes Payable	17,095,229	16,866,972
Total debt	18,705,676	18,783,149
Less: current portion	(571,816)	(797,449)
Unamortized Debt Issuance Expense	(28,657)	(26,044)
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Debt	0	0
Term Loan [Member]
Debt Instrument [Line Items]
Long-term Debt	0	300,000
4.17% senior notes due 2026 [Member]
Debt Instrument [Line Items]
Long-term Debt	200,000	200,000
4.27% senior notes due 2028 [Member]
Debt Instrument [Line Items]
Long-term Debt	200,000	200,000
October 2021 Term Loan
Debt Instrument [Line Items]
Long-term Debt	$ 699,703	$ 699,633

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Debt (Schedule of Funding Vehicles) (Details) - USD ($) $ in Thousands	Aug. 31, 2024	Feb. 29, 2024
Debt Instrument [Line Items]
Non-recourse Notes Payable	$ 17,095,229	$ 16,866,972
Warehouse Facility Three
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	2,300,000
Warehouse Facility Two
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	3,100,000
Warehouse Facility One
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	700,000
Warehouse Facilities [Member]
Debt Instrument [Line Items]
Warehouse Facilities Maximum Borrowing Capacity	6,100,000
Debt Instrument, Unused Borrowing Capacity, Amount	2,360,000
Non-recourse Notes Payable	3,740,000
Term Securitizations Debt [Member]
Debt Instrument [Line Items]
Non-recourse Notes Payable	$ 13,360,000

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Debt (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Jul. 23, 2024	Jun. 26, 2024	Feb. 29, 2024
Debt Instrument [Line Items]
Outstanding Balance	$ 18,105,203				$ 17,959,656
Capitalized interest	3,100	$ 2,900
Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	2,000,000
Unused capacity	2,000,000
Senior Notes [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 400,000
Financing obligation | Minimum
Debt Instrument [Line Items]
Initial lease terms, in years	15 years
Financing obligation | Maximum
Debt Instrument [Line Items]
Initial lease terms, in years	20 years
October 2021 Term Loan
Debt Instrument [Line Items]
Outstanding Balance	$ 700,000
Long-Term Debt, Percentage Bearing Variable Interest, Percentage Rate	6.35%
Asset-Backed Securities | Prime Auto Loans Receivable
Debt Instrument [Line Items]
Asset-Backed Securities, at Carrying Value			$ 1,400,000
Asset-Backed Securities | Non-Prime Auto Loans Receivable
Debt Instrument [Line Items]
Asset-Backed Securities, at Carrying Value				$ 625,000

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Stock and Stock-Based Incentive Plans (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2024	Aug. 31, 2023
Stock and Stock-Based Incentive Plans
Stock Repurchase Program, Authorized Amount	$ 4,000.0
Share Repurchase Program
Stock and Stock-Based Incentive Plans
Available for repurchase, as of end of period	$ 2,150.1	$ 2,451.3

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Stock and Stock-Based Incentive Plans (Schedule of Common Stock Repurchases) (Details) - Share Repurchase Program - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares repurchased	1,376,700	0	2,822,400	0
Average Cost Per Share	$ 77.04	$ 0	$ 74.41	$ 0
Available for repurchase, as of end of period	$ 2,150.1	$ 2,451.3	$ 2,150.1	$ 2,451.3

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Stock and Stock-Based Incentive Plans (Composition of Share-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	$ 35,221	$ 33,687	$ 84,016	$ 70,830
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	1,639	1,195	2,648	2,585
Carmax Auto Finance Income
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	1,449	1,198	2,134	1,647
Selling, general and administrative expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based compensation expense, before income taxes	$ 32,133	$ 31,294	$ 79,234	$ 66,598

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Stock and Stock-Based Incentive Plans (Composition of Share-Based Compensation Expense - By Grant Type) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	$ 35,221	$ 33,687	$ 84,016	$ 70,830
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	9,174	13,650	28,118	27,727
Cash-settled restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	17,277	12,804	28,667	27,915
Stock-settled market stock units (MSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	4,187	3,884	11,767	10,108
Stock-settled performance stock units (PSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	2,117	797	12,301	1,538
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	0	76	0	307
Stock-settled deferred stock units (DSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	1,850	1,850	1,850	1,850
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	616	626	1,313	1,385
Other share-based incentives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense, before income taxes	$ 4,583	$ 3,349	$ 15,464	$ 5,080

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Stock and Stock-Based Incentive Plans (Stock Incentive Plan Information) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	6 Months Ended
	Aug. 31, 2024	Feb. 29, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	8,027	7,393
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	1,230
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	(485)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period	(111)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 29.20
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value	$ 28.07
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 46.6
Stock-settled market stock units (MSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	535	383
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	238
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(75)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(11)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 95.73
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 104.28
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 24.5
Other share-based incentives
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	411	195
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	263
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(47)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 69.43
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 75.26
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 4.7
Cash-settled restricted stock units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	1,594	1,297
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	918
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(556)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(65)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 67.22
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 71.19

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Net Earnings Per Share (Basic And Dilutive Net Earnings Per Share Reconciliations) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Aug. 31, 2024	May 31, 2024	Aug. 31, 2023	May 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Net earnings	$ 132,809	$ 152,440	$ 118,635	$ 228,298	$ 285,249	$ 346,933
Weighted average common shares outstanding, shares	155,866		158,479		156,513	158,298
Weighted average common shares and dilutive potential common shares, shares	156,526		159,238		157,116	158,900
Basic net earnings per share (in dollars per share)	$ 0.85		$ 0.75		$ 1.82	$ 2.19
Diluted net earnings per share (in dollars per share)	$ 0.85		$ 0.75		$ 1.82	$ 2.18
Stock options
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Dilutive potential common shares, shares	349		581		316	373
Stock-settled stock units and awards
Schedule of Basic and Dilutive Net Earnings Per Share Reconciliation [Line Items]
Dilutive potential common shares, shares	311		178		287	229

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Net Earnings Per Share (Narrative) (Details) - shares	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Earnings Per Share [Abstract]
Anti-dilutive securities not included in calculation of diluted net earnings per share	5,083,556	3,508,300	5,133,763	5,518,543

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Aug. 31, 2024	May 31, 2024	Aug. 31, 2023	May 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		$ 59,279			$ 59,279
Other comprehensive loss before reclassifications					(28,828)
Amounts reclassified from accumulated other comprehensive income					(21,394)
Other comprehensive income (loss), net of taxes	$ (52,621)	2,399	$ 17,267	$ (36,539)	(50,222)	$ (19,272)
Ending balance	9,057				9,057
Net Unrecognized Actuarial Losses
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		(37,116)			(37,116)
Other comprehensive loss before reclassifications					0
Amounts reclassified from accumulated other comprehensive income					169
Other comprehensive income (loss), net of taxes					169
Ending balance	(36,947)				(36,947)
Net Unrecognized Hedge Gains (Losses)
Schedule of Accumulated Other Comprehensive Loss [Line Items]
Beginning balance		$ 96,395			96,395
Other comprehensive loss before reclassifications					(28,828)
Amounts reclassified from accumulated other comprehensive income					(21,563)
Other comprehensive income (loss), net of taxes					(50,391)
Ending balance	$ 46,004				$ 46,004

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Accumulated Other Comprehensive Income (Loss) (Changes In and Reclassifications Out of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Total amortization reclassifications recognized in net pension expense	$ 110	$ 129	$ 221	$ 258
Tax expense	(25)	(31)	(52)	(62)
Amortization reclassifications recognized in net pension expense, net of tax	85	98	169	196
Net change in retirement benefit plan unrecognized actuarial losses, net of tax	85	98	169	196
Changes in fair value	(55,748)	35,002	(38,239)	(1,005)
Tax benefit (expense)	13,639	(8,535)	9,411	336
Changes in fair value, net of tax	(42,109)	26,467	(28,828)	(669)
Reclassifications to CarMax Auto Finance income	(14,010)	(12,295)	(28,508)	(24,859)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax	3,413	2,997	6,945	6,060
Reclassification of hedge gains, net of tax	(10,597)	(9,298)	(21,563)	(18,799)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	(52,706)	17,169	(50,391)	(19,468)
Total other comprehensive (loss) income, net of tax	(52,621)	17,267	(50,222)	(19,272)
Cost of sales
Total amortization reclassifications recognized in net pension expense	49	58	99	116
CarMax Auto Finance income
Total amortization reclassifications recognized in net pension expense	3	3	7	7
Selling, general and administrative expenses
Total amortization reclassifications recognized in net pension expense	$ 58	$ 68	$ 115	$ 135

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Accumulated Other Comprehensive Income (Loss) (Narrative) (Details) - USD ($) $ in Millions	Aug. 31, 2024	Feb. 29, 2024
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Deferred tax	$ 3.0	$ 19.3

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Leases Narrative (Details)	6 Months Ended
	Aug. 31, 2024
Minimum
Lessee, Lease, Description [Line Items]
Lease renewal term	1 year
Real Estate Lease Term	5 years
Equipment Lease Term	3 years
Maximum
Lessee, Lease, Description [Line Items]
Lease renewal term	20 years
Real Estate Lease Term	20 years
Equipment Lease Term	8 years

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Leases Components of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023	Aug. 31, 2024	Aug. 31, 2023
Leases [Abstract]
Operating Lease, Cost	$ 22,873	$ 22,239	$ 46,101	$ 44,186
Finance Lease, Right-of-Use Asset, Amortization	2,976	4,907	6,798	9,442
Finance Lease, Interest Expense	6,920	6,407	13,591	12,502
Finance Lease, Cost	9,896	11,314	20,389	21,944
Lease, Cost	$ 32,769	$ 33,553	$ 66,490	$ 66,130

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Leases - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands	Aug. 31, 2024	Feb. 29, 2024
Leases [Abstract]
Operating lease assets	$ 495,783	$ 520,717
Finance Lease, Right-of-Use Asset	191,774	174,998
Total lease assets	687,557	695,715
Current portion of operating lease liabilities	57,959	57,161
Finance Lease, Liability, Current	23,608	20,877
Operating lease liabilities, excluding current portion	473,158	496,210
Finance Lease, Liability, Noncurrent	211,590	198,759
Total lease liabilities	766,315	773,007
Finance Lease Accumulated Depreciation	$ 62,300	$ 55,500

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Lease Term and Discount Rate (Details)	Aug. 31, 2024 Rate	Feb. 29, 2024 Rate
Leases [Abstract]
Operating Lease, Weighted Average Remaining Lease Term	16 years 3 days	16 years 25 days
Finance Lease, Weighted Average Remaining Lease Term	13 years 2 months 1 day	11 years 5 months 4 days
Operating Lease, Weighted Average Discount Rate, Percent	5.10%	5.05%
Finance Lease, Weighted Average Discount Rate, Percent	15.79%	17.16%

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Lease Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2024	Aug. 31, 2023
Leases [Abstract]
Operating Lease, Payments	$ 47,610	$ 44,182
Finance Lease, Interest Payment on Liability	12,642	12,076
Finance Lease, Principal Payments	9,056	7,810
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	4,189	22,277
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability	$ 24,497	$ 43,684

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Leases Maturities of Lease Liabilities (Details) $ in Thousands	Aug. 31, 2024 USD ($)
Leases [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	$ 42,579
Lessee, Operating Lease, Liability, Payments, Due Year Two	78,928
Lessee, Operating Lease, Liability, Payments, Due Year Three	72,607
Lessee, Operating Lease, Liability, Payments, Due Year Four	68,493
Lessee, Operating Lease, Liability, Payments, Due Year Five	46,682
Lessee, Operating Lease, Liability, Payments, Due after Year Five	518,131
Lessee, Operating Lease, Liability, Payments, Due	827,420
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(296,303)
Operating Lease, Liability	531,117
Finance Lease, Liability, Payments, Remainder of Fiscal Year	21,194
Finance Lease, Liability, Payments, Due Year Two	48,763
Finance Lease, Liability, Payments, Due Year Three	45,167
Finance Lease, Liability, Payments, Due Year Four	38,332
Finance Lease, Liability, Payments, Due Year Five	31,118
Finance Lease, Liability, Payments, Due after Year Five	288,506
Finance Lease, Liability, Payment, Due	473,080
Finance Lease, Liability, Undiscounted Excess Amount	(237,882)
Finance Lease, Liability	235,198
lessee, minimum lease payments for leases not yet commenced	$ 4,700

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Contingent Liabilities (Details) - USD ($) $ in Millions	Aug. 31, 2024	Feb. 29, 2024
Commitments and Contingencies Disclosure [Abstract]
Liability associated with guarantee	$ 31.0	$ 30.9