CARMAX REPORTS RECORD SALES
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FOR THE FISCAL 2004 FOURTH QUARTER AND FULL YEAR
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Richmond, Va., March 4, 2004 - CarMax, Inc. (NYSE: KMX) today reported record
sales for the fourth quarter and fiscal year ended February 29, 2004.
o Comparable store used unit sales rose 5% in the fourth quarter and
6% for the fiscal year.
o Total used unit sales grew 17% in the fourth quarter and 18% for the
fiscal year.
o Fourth quarter total sales increased 18% to $1.12 billion from
$946.6 million in the prior year's quarter. Fiscal 2004 total sales
of $4.60 billion grew 16% compared with $3.97 billion in fiscal 2003.
o CarMax continues to expect fourth quarter earnings per share in the
range of 19 cents to 22 cents, bringing expected fiscal 2004 earnings
per share to a range of $1.08 to $1.11.
Sales Commentary
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"We are pleased by our continuing ability to grow market share in a challenging
used car market," said Austin Ligon, president and chief executive officer. "Our
6% used unit comp growth in fiscal 2004 maintains a double-digit spread versus
our estimate of negative 5% average used unit comps for the publicly traded new
car dealer groups in calendar 2003.
"Used unit comp growth of 5% for the quarter and 6% for the year were both
within our expected ranges," said Ligon. "Our stores experienced fewer major
winter storms than in last year's fourth quarter. Though less severe, disruptive
winter weather occurred with more frequency and was more widespread than last
year. We believe the weather had a generally dampening effect on this quarter's
sales.
"As expected, the quarter benefited from an extra Saturday in January compared
with last year and one extra selling day in February," said Ligon. "These
calendar differences added approximately 2 percentage points to this quarter's
used unit comp sales growth. The quarter also benefited from the gradual return
to historical approval rates by our non-prime, third-party lenders.
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"We note that some analysts have been attempting to predict our monthly or
quarterly used unit comps based on data from state departments of motor
vehicles," said Ligon. "We caution that using DMV data to estimate short-term
performance of individual stores, markets, or companies is highly unreliable.
Not all states make available title registration data by dealer. There are wide
variations in state and county reporting practices, in the time lag between a
sale and title registration, in the aggregation of sales data in multi-store
markets, and so forth. DMV data can be useful over the long term to help
estimate market share or to gauge the longer-term directional performance of the
used vehicle market. However, in our view, the data should not be used to try to
estimate short-term sales performance."
Fourth Quarter Earnings Expectations
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"We continue to expect fourth quarter earnings per share in the range of 19
cents to 22 cents," Ligon said. "Our confidence in meeting this expectation is
based on as-predicted comp unit growth and our new superstores as a group
continuing to perform somewhat above expectations."
Store Openings and New Car Franchise Disposals
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CarMax opened two superstores during the fourth quarter, entering the Louisville
market with a standard superstore and adding a satellite superstore in Las
Vegas. Also during the fourth quarter, the company co-located its two remaining
stand-alone new car franchises in Los Angeles with a new satellite used car
superstore. Including the Los Angeles satellite, the company opened a total of
nine superstores in fiscal 2004, including five standard superstores in new,
mid-sized markets and four satellite superstores in existing markets.
During the fourth quarter, CarMax sold an integrated Chrysler franchise that had
been located at the Southlake used car superstore in Atlanta. During fiscal
2004, the company exited a total of four new car franchises. Disposal plans
remain for four Mitsubishi franchises and a Ford franchise. As of February 29,
2004, CarMax had 12 new car franchises, all of which were integrated or
co-located with its used car superstores.
In the first quarter of fiscal 2005, CarMax plans to open three standard-sized
used car superstores. The company will enter the Indianapolis and Columbia
markets and add its third superstore in the Los Angeles market.
Earnings Release and Conference Call Information
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CarMax will release fourth quarter earnings on Tuesday, March 30, 2004, before
the market opens. The company will host a conference call for investors at 9:00
a.m. Eastern time on that date. Domestic investors may access the call at
1-888-298-3261 (conference I.D.: 5979279). International investors should dial
1-706-679-7457 (conference I.D.: 5979279). A live Web cast of the call will be
available on the company's investor information home page at
http://investor.carmax.com or at www.streetevents.com.
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A replay of the call will be available beginning at approximately 1:00 p.m.
Eastern time on March 30 and will run through midnight, April 6, 2004. Domestic
investors may access the recording at 1-800-642-1687 (conference I.D.: 5979279)
and international investors at 1-706-645-9291 (conference I.D.: 5979279). A
replay of the call also will be available on the company's investor information
home page or at www.streetevents.com.
Retail Vehicle Sales Change
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Three Months Ended Year Ended
February 29 or 28 February 29 or 28
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2004 2003 2004 2003
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Comparable store vehicle sales:
Used vehicle units........... 5 % 0 % 6 % 8 %
New vehicle units............ 3 % 3 % (1)% (3)%
Total units.................. 5 % 0 % 5 % 6 %
Used vehicle dollars......... 9 % (1)% 7 % 8 %
New vehicle dollars.......... 7 % 3 % 1 % (3)%
Total dollars................ 9 % 0 % 6 % 6 %
Total vehicle sales:
Used vehicle units........... 17 % 12 % 18 % 16 %
New vehicle units............ (5)% 3 % (3)% (7)%
Total units.................. 15 % 11 % 16 % 13 %
Used vehicle dollars......... 21 % 11 % 19 % 17 %
New vehicle dollars.......... (1)% 3 % (1)% (7)%
Total dollars................ 18 % 10 % 16 % 12 %
Percent Retail Vehicle Sales
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Three Months Ended Year Ended
February 29 or 28 February 29 or 28
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2004 2003 2004 2003
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Vehicle units:
Used vehicles................. 92% 90% 91% 89%
New vehicles.................. 8 10 9 11
--------------- ---------------- --------------- ---------------
Total............................. 100% 100% 100% 100%
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Vehicle dollars:
Used vehicles................. 88% 86% 87% 85%
New vehicles.................. 12 14 13 15
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Total............................. 100% 100% 100% 100%
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Retail Unit Sales
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Three Months Ended Year Ended
February 29 or 28 February 29 or 28
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2004 2003 2004 2003
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Used vehicles..................... 54,543 46,674 224,099 190,135
New vehicles...................... 4,837 5,084 21,641 22,360
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Total............................. 59,380 51,758 245,740 212,495
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Average Retail Selling Price
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Three Months Ended Year Ended
February 29 or 28 February 29 or 28
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2004 2003 2004 2003
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Used vehicles..................... $15,370 $14,900 $15,379 $15,243
New vehicles...................... $23,942 $23,070 $23,650 $23,183
Weighted average.................. $16,068 $15,703 $16,107 $16,078
About CarMax
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CarMax is the nation's leading specialty retailer of used cars. Headquartered in
Richmond, Va., CarMax currently operates 49 used car superstores in 23 markets.
CarMax also operates 12 new car franchises, all of which are integrated or
co-located with its used car superstores. During the twelve month period ended
February 29, 2004, the company sold 224,099 used cars, which is 91 percent of
the total 245,740 vehicles the company sold during that period. For more
information, access the CarMax Web site at www.carmax.com.
Forward-Looking Statements
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The company cautions readers that the statements contained herein 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 or current reports as filed with or furnished to the Securities and
Exchange Commission.
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Contacts:
Investors and Financial Media:
Dandy Barrett, Director of Investor Relations, (804) 935-4591
Celeste Gunter, Manager, Investor Relations, (804) 935-4597
General Media:
Lisa VanRiper, Director of Public Affairs, (804) 935-4594