We’re rounding the track on Friday as we cover CarMax’s latest bumpy road. We also talk about Ford’s truck wave as well as a massive nine figure trick shot from creators Dude Perfect.
Show Notes with links:
CarMax is facing significant headwinds amidst high interest rates and fewer cars purchased directly from customers. The company reported a marginal increase in comparable store used-car unit sales of 0.1% for Q4, underperforming against analyst expectations of 0.36% growth.
Net income for the quarter fell by 27%, sharply contrasting with analysts’ forecasts of an 8.4% increase, leading to a 13% drop in CarMax shares.
High interest rates have deterred buyers, pushing them towards newer and more affordable cars, exacerbated by a supply shortage of newer used cars, which isn't expected to improve until late 2025.
CarMax has focused on preserving profitability rather than market share expansion, with CarMax Auto Finance seeing a 19% growth in income due to reduced loan loss provisions.
Originally planning to hit the 2M cars per year mark by 2026, the company has now pushed that target out to 2030
"Affordability will be the key driver of our future success," noted CarMax executives, as the company revises its vehicle sales targets amidst ongoing economic challenges.
Ford has announced it will finally be shipping 144,000 redesigned F-150 and Ranger pickup trucks to North American dealers, following a quality assurance delay.
The automaker is also resuming shipments of the F-150 Lightning electric trucks, with price cuts on some variants by up to $5,500.
Originally Initiated due to past warranty costs ($4.8 billion in 2023), this cautious approach was intended to avoid electronic issues detected in pre-shipment inspections.
These shipments are pivotal for Ford to meet its ambitious 2024 pre-tax profit goal of $10 to $12 billion, reinforcing confidence expressed last month
And for the $100 million dollar trick shot, YouTube sensation Dude Perfect is scoring a massive investment to expand their empire into a Texas-sized headquarters and beyond. With plans to transform digital fun into a family-friendly destination, the group is setting up to score big, not just online, but in real-world entertainment, merch, beverages and beyond.
The investment will fund a new headquarters in Frisco, Texas, featuring a trick-shot tower, museum, mini-golf, and more, aiming to create a family-friendly entertainment hub.
Initiatives include an international tour, a new streaming app, and an ESPN "30 for 30" documentary premiering on April 25.
Known for their faith-based mission and philanthropic efforts, Dude Perfect continues to focus on "serving families with the most trusted entertainment on earth."
Dude Perfect Member, Cody Cotton said "This partnership will help us transform digital experiences into tangible ones for families,"
I knew that was going to happen that happens every once in a while. And I think that's just the perfect way to start the show and Kyle's back in the office after three days just threw me off, but I'm not used to seeing you there. It's Friday, April 12. Today we're talking about Carmax recalibration. Ford starting to ship Rangers a nine figure nudes.
Unknown:
People want to be a nine figure, dude,
Kyle Mountsier:
I'll take a nine figure dude.
Paul J Daly:
Actually, being a nine figure, dude, in the way we're gonna talk about the end of the show, in my opinion, maybe the best job in the world. It's unreal. It's talking about like, it's just I mean, I love the auto industry. I love the auto industry so much. But I think you'd be few and far between, like, perhaps trade for a mantra
Kyle Mountsier:
at Look, look, we're trying to get a little bit out
Paul J Daly:
of balance. I know we're trying to harness our inner nine figure dude. And in a nine, maybe one day if you count the name of our company, and I figured dudes Welcome back to the office. How does it feel to like, wake up and be in your
Kyle Mountsier:
studio? Well, look, it's not even just about waking up as you as you know, it, it. It. It is about sleeping in your bed. Right? That is the that is the real thing. But there's a certain Zen about just being in your environment, knowing where you sit and knowing that Mike's gonna work for you. Nice, so nice.
Paul J Daly:
Our producer Nathan, just give us a show no set. It sounds like we were saying nine finger dudes like I only have nine fingers. But we're saying figure FYI, G U R E as in money as in Miami cash. Like, I don't think it'd be cool to be a nine finger dude. That would probably be a little bit challenging. That's good. Well, it's good that you're home. You just got the I'm so jealous, because you every time I like looked on LinkedIn and saw the came families and friends. I was like,
Kyle Mountsier:
Look, I got to go last year, I got to go this year. No, I didn't get to go last year. That Oh, you know, special puffle Eddie, he's the CEO of NCM. And he came up to me and he said, What about this event makes it special? And I said, it's it's actually that when you come to this event, everybody assumes the posture of David. Right? So like this absolutely humble, smiley. Like, like carrying posture. Even if you maybe don't see that posture from some of these people that you see in the normally at other events. Yeah, they assume that posture for the event. And it is, gosh,
Paul J Daly:
that's so true. It's that's true of any anything you think of like a wedding, even you go to a wedding. And if the bride and groom are reserved and sitting down, the whole wedding is reserved, and sitting down either. Or like, even though some people are like, Can we just dance right? Like if the bride and groom are out there doing it? Even people that would usually be out there dancing on the floor or out there on the floor?
Kyle Mountsier:
That's made me think I was like, what is the what is the posture that people are assuming when they come to us? So do I
Paul J Daly:
mean the shoe, the shoe fits if you were at ASOTU CON last year or the year before you understand our general posture and the posture of the whole asoto team is happy welcoming, open handed, right? I'm not trying to like give us all these compliments, but these are the things that we aspire to. And I think ASOTU CON reflects that. So if you want to, I mean, you can't go to Kane families and friends. You missed that one. But you didn't miss a soda on right coming up in just 32 days from now. May 15 and 16th and little on 17th Little on the 14th kind of sandwiched in there. We have an insane lineup. We're selling a lot of dealer tickets now. Because you know why? Because we're close to 30 days. Yeah, it's a 30 day cycle. And the next month doesn't exist. The only thing that exists is this 30 day cycle. And so it was funny what we sold one dealer ticket last night, you know, I wake up in the morning, we have all you know alerts set up and and it was a fixed ops director for a corporate group, a corporate fixed ops director, bought that ticket at 3:23am Come on now that that that person was working and what was on their
mind at 3:
23am ASOTU CON so God made me so happy so we hope that you will check out a soda con.com Our presenting sponsor is Reynolds and Reynolds Gugu. Collab co presenting sponsor, they have just done a great job helping us make this whole event possible. Nothing but love for them hope you get to meet some of the great people at the event they surely will be there along with a number of other great industry partners. You go to the site and see some of them. See the 60 Plus speakers and dealers who are going to be there Maryland auto dealer Association Have their meeting. Well, Canada's having their special breakfast meet up. I'm bringing my personal therapist for a parenting session on morning. I mean, it's the whole thing. You can go home, run a better store, make more money, be a better parent have all the smile and let's we, I mean, it's not the reason people come, but we give out really great swag. Oh,
Kyle Mountsier:
that's that is fact.
Paul J Daly:
I mean, really great. We'll talk about all the sweat. Yeah, we got to tell some stories because we're gonna jump into David's Lauren fall, all things use cardroom. Here, we're talking about Carmax today. So they're facing significant headwinds. Among high interest rates and fewer cars purchased directly from consumers. They reported a marginal increase in year over year sales for q4 while their q4 but it underperformed analyst expectations net income though for the Quarter fell 27% When analysts were expecting a 13% drop so or no, we're expecting an 8.4% increase. major difference their shares were down 13% on the news, they're still about 10% down as of right now, saying high interest rates to turn buyers back to affordability, shortage of use cars now that new cars are coming back in in full availability, they don't see that shifting until 2025. Maybe they did originally have a plan to hit 2 million cars by 2026. And now they've punted that sucker all the way out to 2030 or below. Yep, a car maket Carmax executive said affordability will be the key driver of our future success.
Kyle Mountsier:
This is where I see like Brian Kramer over in a corner like hey, Sue, and now the dealers are buying the cars from customers. Like he's all Yeah, I think there's a reality probably to that in some particular markets, where dealers have looked at the model and said, Hey, I'm gonna go after that. And so they're buying more of these used cars off the street because they haven't, because car Max hasn't bought that many as many cars directly from customers. You know, we we all know I it kind of surprises me that that analysts were saying that they were gonna see an 8.4% increase in in net income because everybody knew margin compression was coming in that was gonna serve its way all the way to the US cars. It's interesting. Yeah, right. Imagine being a solely used car dealer right now and not having a plan for profitability. That's different than it was the last two years.
Paul J Daly:
Well, speaking of a plan for profitability, so big way. So Ford has announced it will finally be shipping 144,000 redesigned f150 and Ranger pickup trucks to North American dealers following a quality assurance delay. We remember they stopped shipments of these vehicles, they're resuming the F 150 lightnings. And on the lightnings are issuing some price cuts of almost $6,000. In some cases, this is really roll backing rolling back some price increases that happened. The stock was initially initiated due to past warranty costs. And they're being very cautious that they don't walk themselves into another situation. And we're talking like 4.8 billion in 2023. So they said they detected some electrical issues, they stopped shipments, they fix the issues avoided the warranty thing, so a little patients might just pay off in the profitability line. So they want to meet their 2024 pre tax profit goal of 10 to 12 billion. And Ford engineers emphasized our proactive quality checks ensure only the best for our customers.
Kyle Mountsier:
Can I guys say OEMs? Need wholesales? Can a guy say that? You know what I mean? They do? Yeah, they absolutely do. It's gonna be interesting what 144,000 trucks over a very short timeline pushed into the market actually does to the market.
Paul J Daly:
You know, hey, well, the rangers to like the Rangers like not a super. Alright, it's a strong segment. I think like coming back the midsize trucks small midsize truck segment. So I wonder what that's going to take sales from you have to I mean, probably a little from full size trucks for the people don't need all the juice. And then probably some people who are in that like mid size SUV that are like you know what?
Kyle Mountsier:
Yeah, maybe pick up that there's a few other pickup trucks in that range. You know,
Paul J Daly:
now you get the Nissan. What is that? Frontier? Yep, yep. And Tacoma. Tacoma. Yeah, so, Ford. Good job Ford. says Good job Ford. It sounds like a good thing. Speaking a good job.
Kyle Mountsier:
Segway made me happy and sad at the same time snaps and claps for this one. So the 100 million dollar chick shot now. That Dude Perfect has put up there they are a YouTube sensation that has expanded and grown since the very first chick shot in 2009 has secured $100 million or at least $100 million investment into the expansion of their empire. A now growing empire both on YouTube and they're gonna push into other media properties part of the investment is meant to go toward their massive new facility that has like a three story tricks. Shot thing. A a full on mini golf course. So real I, one day we're going there, Paul. Absolutely. Other initiatives that they're working on is an international tour a new streaming app. They've got the their 30 for 30 ESPN documentary premiering on April 25.
Paul J Daly:
In Dallas Film Festival, they're going to do just that run in the world right now. Yeah,
Kyle Mountsier:
so they're known for their faith based mission and philanthropic efforts. Their focus is to serve families with the most trusted entertainment on Earth. Dude, dude, perfect member Cody Cotton said, This partnership will help us transform digital experiences into tangible ones for families.
Paul J Daly:
I love it. They call the most trusted entertainment on Earth. I don't know who doesn't love watching a great trick shot. And, and they're just and they're just good guys. Right? If you watch the content, I mean, sometimes they yell a little bit too much for me like and get a little grating. Right? My kids love it. It's constantly like when the new video drops my kids, right? They've just been good guys that have made it from the beginning. They've become very savvy business people, which we're seeing from a lot of YouTube creators. I also think we're seeing some of this in the automotive space, as some YouTube and social media creators are now finding ways to monetize their content they make for salespeople, et cetera, et cetera. So you know, it's hard not to love these guys. We'll meet them one day, we'll show them our lame trick shot compared to their trick shots. And we'll keep you know, I have I've had one trick shot in mind that I really want to try to execute once because I worked in service. I worked with wheels, and having a car on a rack and then bouncing the wheel off the ground and having it land on the car. Like land right on the lug nuts. Now that would be that's a hard trick shot. But I mean, they've done some hard trick shots. Just why not?
Kyle Mountsier:
I mean, if you got the time, like cars,
Paul J Daly:
I don't, but maybe maybe one day I will and that's what we'll do. We'll do automotive related trick shots, a whatever you're doing today on Friday. We hope you really lean into what you're doing your job, your vocation, your mission, your purpose. Serve some people, sell some cars. Go buy tickets to a soda