CARMAX REDUCES THIRD QUARTER EXPECTATIONS


Richmond, Va., October 15, 2003 - CarMax, Inc. (NYSE: KMX) today announced that
it is lowering its expectations for third quarter comparable store used unit
sales growth to a range of 0% to 2% from the prior range of 4% to 6%. Earnings
per share expectations have also been revised downward to a range of 16(cent) to
18(cent) from the prior range of 19(cent) to 21(cent).

"We noted at the time of our second quarter earnings release that sales in early
September were softer than expected and that we also lost sales in seven
mid-Atlantic stores due to Hurricane Isabel," said Austin Ligon, president and
chief executive officer. "Sales in the last week of September recovered to a
level roughly consistent with our expectations. Nonetheless, sales in the first
two weeks of October, while stronger than those in early September, have been
consistently below our expectations. We believe it is prudent at this time to
revise our sales expectations for the quarter to a level that assumes a
continuation of the early October trend through the balance of the quarter.

"This slower sales trend has been broadly felt across most of our markets,"
Ligon said. "We believe the major reason for this trend has been that wholesale
used car prices have remained flatter than we normally expect to see through
mid-October. Consequently, we believe retail used car prices are likely less
competitive with new car closeout models than usual. In response to this trend,
we have reduced our margin targets even more than we normally do during the fall
quarter in order to improve our price position and, hopefully, improve sales.
This combination of reduced sales expectations and sharper pricing results in
our lowered earnings expectations.

"It is also worth noting that, looking back over a two year period, our third
quarter comparable store growth comparisons are the toughest of the year -
comparing to a 29% comp used unit increase two years ago in the post-September
11 sales boom, followed by another 8% last year," said Ligon. "Thus we may also
be seeing a return to a more `normalized' fall seasonality that is at a lower
level than we expected. We do not see any evidence that the softer sales trends
are related to credit availability, either from our prime or non-prime sources.

"We are not at this point updating our fourth quarter sales or earnings per
share expectations," said Ligon. "While we are very disappointed with the
current sales trend, we do not believe it represents any fundamental change in
our business. As we have noted on many previous occasions, the new car model
year transition period has always made the third quarter the most volatile for
our business both in terms of sales and margin. This is true because late model
used cars typically experience roughly half their annual price depreciation
during this period,


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CarMax, Inc.
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with the pattern of price adjustment often varying from year to year. Our
historical experience would suggest that these seasonal transition issues will
have largely resolved themselves by the beginning of the fourth quarter.
Further, our comparable store growth comparisons in the fourth quarter compared
to the last two years are the easiest quarterly comparisons of this fiscal year.
Even if our disappointing October sales trend continues throughout the fourth
quarter, used unit comp growth in the fourth quarter would be roughly 5%.

"We plan to update our fourth quarter and full year sales and earnings
expectations at the time of our third quarter earnings release in mid-December,"
said Ligon. "However, we are adjusting our full year comp growth range and
earnings expectations to be consistent with the lowered outlook for the third
quarter. We now expect the full year used unit comp growth to be in a range of
5% to 7% and full year earnings per share to be in a range of $1.08 to $1.13."

ABOUT CARMAX
CarMax is the nation's leading specialty retailer of used cars. Headquartered in
Richmond, Va., CarMax currently operates 44 used car superstores in 21 markets.
CarMax also operates 15 new car franchises, 13 of which are integrated or
co-located with its used car superstores. During the twelve month period ended
August 31, 2003, the company sold 210,143 used cars, which is 91% of the total
232,003 vehicles the company sold during that period. For more information,
access the CarMax Web site at www.carmax.com.

FORWARD-LOOKING STATEMENTS
The company cautions readers that the statements contained in this news release
regarding the company's future business plans, operations, opportunities or
prospects, including without limitation any statements or factors regarding
expected sales, margins or earnings, are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements are based upon management's
current knowledge and assumptions about future events and involve risks and
uncertainties that could cause actual results to differ materially from
anticipated results. For more details on factors that could affect expectations,
see the company's Annual Report on Form 10-K for the fiscal year ended February
28, 2003, and its quarterly and current reports as filed with or furnished to
the Securities and Exchange Commission.

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Contacts:         Dandy Barrett, Director of Investor Relations, (804) 935-4591
                  Celeste Gunter, Manager, Investor Relations, (804) 935-4597