Enrique Mayor-Mora
Executive Vice President, Chief Financial Officer at CarMax
Thanks, Bill and good morning everyone. As Bill noted, we drove another quarter of sequential improvement and year-over-year performance across key financial metrics, including unit sales, wholesale margins, gross profit, SG&A and EPS.
Second quarter net earnings per diluted share was $0.75 versus $0.79 a year-ago. Total gross profit was $697 million, down 5% from last year's second quarter. Used retail margin declined by 9% to $452 million, driven by lower volume at similar per unit margins. Wholesale vehicle margin declined by 3% to $137 million, with a decrease in volume, partially offset by stronger per unit margin performance.
Other gross profit was $108 million, up 6% from last year's second-quarter. This increase was driven by service, which delivered a $20 million improvement over last year. With this quarter -- this year's quarter, reporting $14 million less. As we communicated in our last two earnings calls, our expectation is that service will deliver improved year-over-year performance for FY '24 as a result of the efficiency and cost coverage measures that we put in place. The extent of the improvement will also depend on sales performance given the leverage, deleverage nature of service. The improvement in service was partially offset by reduction in extended protection plan for EPP revenues and third party finance fees.
EPP revenues were down $8 million, primarily due to lower sales and were to a lesser degree impacted by slightly lower penetration rates, partially due to recent pricing increases taken to offset cost pressures experienced by our third party providers. These items were partially offset by favorability in year-over-year reserve adjustments. Third-party finance fees were down $4 million from last year's second quarter, driven by lower volume in Tier two, for which we received a fee.
On the SG&A front, expenses for the second quarter were $586 million, down 12% from the prior year's quarter as we continue to see the benefits of our cost management efforts. To a lesser degree, we also had some timing favorability in the quarter. SG&A as a percent of gross profit was 84%, a leverage of 6.3 points as compared to last year's second quarter. The decrease in SG&A dollars over last year was mainly due to the following. First, other overhead decreased by $41 million. This decrease was driven by several factors, including continued favorability and non-CAF uncollectible receivables, favorability in costs associated with lower staffing levels, and from reductions in spend for our technology platforms and strategic initiatives, which including which included a timing benefit this quarter. We also had two smaller items in the quarter that largely offset each other. These consisted of additional settlement dollars from the same class action lawsuit we spoke to in the first quarter, offset by unfavorable self-insured losses related to multiple hailstorm events.
Second, total compensation and benefits decreased $28 million, excluding a $7 million increase in share base compensation. This decrease was primarily driven by our continued focus on driving efficiency gains and aligning staffing levels in stores and CECs to sales. Third, we reduced advertising by $17 million. This decrease was due to a reduction in per unit spend as compared to last year's peak per unit spend, lower volume and timing.
As we communicated on our fourth quarter call, as we enter the back half of FY '24 we will have largely anniversaried over the year-over-year benefits from our cost management efforts. With that said, we remain disciplined with our spend. We also expect timing and marketing and technology spend to impact the back half of FY '24. In regards to marketing, we still expect our full-year spend on a per unit basis to be similar to FY '23 spend level. Accordingly, our spend in the back half of FY '24 will exceed the per unit spend from the front half. Regarding technology spend approximately $10 million of the year-to-date year-over-year favorability experienced in other overhead will hit the back half of FY '24. We remain committed to effectively managing our cost structure. Our performance in the first half of the year has us on track to deliver on our goal of low-single digit gross profit growth to lever SG&A for the full-year, even when excluding the benefits from this year's legal settlements.
Regarding capital structure, while we paused the repurchase of our common stock during the third quarter of fiscal 2023, we intend to restart our share repurchase program this quarter. We expect a modest initial pace that would be below the average quarterly pace as prior to our pause. Our objective is to appropriately manage our net leverage to maintain financial flexibility and to efficiently access capital markets for both CAF and CarMax as a whole, while also returning capital back to shareholders. As of the end-of-the quarter, we had $2.45 billion of repurchase authorization remaining.
Now I'd like to turn the call over to John.