CARMAX REPORTS RECORD THIRD QUARTER SALES AND
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ANNOUNCES FISCAL 2006 STORE OPENING PLAN;
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Expects Third Quarter EPS of Approximately 17 Cents
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Richmond, Va., December 6, 2004 - CarMax, Inc. (NYSE: KMX) today reported record
sales for the third quarter ended November 30, 2004.
o Total sales increased 13% to $1.22 billion from $1.07 billion in the same
period last year.
o Total used unit sales grew 15% for the quarter.
o Comparable store used unit sales rose 2% for the quarter.
o The company now expects third quarter earnings of approximately 17 cents per
share.
o The company announced plans to open approximately nine used car superstores in
the next fiscal year, expanding its superstore base by approximately 16%.
Sales Commentary
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"As we noted in our November 16 release, our third quarter used car sales trends
were stronger than the performance we experienced during the late spring and
summer," said Austin Ligon, president and chief executive officer. "In the
quarter, used car wholesale prices fell in line with what we generally see
during the autumn model-year-changeover period, and we believe this contributed
to the stronger sales performance. We also believe we recovered some of the
sales lost during the second quarter to severe weather in Florida and the
southeastern U.S. In addition, as we originally expected, DRIVE Financial
Services, a new finance provider focused on subprime customers, contributed
approximately 3% to used unit comps."
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Third Quarter Earnings Expectations
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"For the third quarter, we now expect earnings per share of approximately 17
cents, which includes a benefit of about 1 cent from the adjustment in the
valuation of our retained interests in securitized receivables," Ligon said. "We
plan to offer guidance for our fourth quarter and current fiscal year when we
release third quarter earnings on December 17."
Used Car Store Openings and New Car Franchise Disposals
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CarMax opened two superstores during the third quarter, entering the
Albuquerque, N. M., market with a standard superstore and adding a satellite
superstore in Richmond, Va. CarMax also opened a satellite superstore in the
Miami, Fla., market on December 1. The company has opened nine superstores thus
far in fiscal 2005, an increase of 18% in the used car superstore base. No
additional superstore openings are planned during the balance of the fiscal
year.
During the third quarter, the company completed the sale of its Ford franchise
in Kenosha, Wis., and returned its Mitsubishi franchise in Atlanta, Ga., to the
manufacturer. In addition, the company expects to return its remaining two
Mitsubishi franchises to the manufacturer in the fourth quarter, one at its
Dulles superstore in northern Virginia and one in Kenosha. Following these
actions, CarMax will have seven new car franchises, including three Chrysler
franchises, two Toyota franchises, one Nissan franchise, and one Chevrolet
franchise. The company plans to operate this core group of new car franchises
for the foreseeable future.
Fiscal 2006 Store Opening Plan
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During the fiscal year ending February 28, 2006, the company plans to expand its
used car superstore base by approximately 16%, consistent with CarMax's used car
superstore annual growth target in the range of 15% to 20%. The company expects
to open approximately nine used car superstores, including five standard
superstores and four satellite superstores. Planned entries into mid-sized
markets include Jacksonville, Fla.; Salt Lake City, Utah; Wichita, Kan.; and
Virginia Beach, Va. Satellite superstore additions are planned for
Independence, Mo.; Miami, Fla.; and Nashville, Tenn. CarMax also plans to add
one standard and one satellite superstore to the Los Angeles, Calif., market,
bringing the total number of stores in this large market to five.
Earnings Release and Conference Call Information
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CarMax will release third quarter earnings on Friday, December 17, 2004, before
the opening of the New York Stock Exchange. 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.: 2632626). International
investors should dial 1-706-679-7457 (conference I.D.: 2632626). 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 December 17 and will run through midnight, December 24, 2004.
Domestic investors may access the recording at 1-800-642-1687 (conference I.D.:
2632626) and international investors at 1-706-645-9291 (conference I.D.:
2632626). 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 Changes
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Three Months Ended Nine Months Ended
November 30 November 30
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2004 2003 2004 2003
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Comparable store vehicle sales:
Used vehicle units.......... 2 % 2% (3)% 6 %
New vehicle units........... 11 % 2% 12 % (2)%
Total vehicle units......... 2 % 2% (2)% 5 %
Used vehicle dollars........ 3 % 4% (1)% 7 %
New vehicle dollars......... 9 % 5% 11 % 0 %
Total vehicle dollars....... 4 % 4% 0 % 6 %
Total vehicle sales:
Used vehicle units.......... 15 % 13% 8 % 18 %
New vehicle units........... (6)% 1% (3)% (3)%
Total vehicle units......... 13 % 12% 7 % 16 %
Used vehicle dollars........ 16 % 16% 10 % 19 %
New vehicle dollars......... (7)% 4% (3)% (1)%
Total vehicle dollars....... 13 % 14% 9 % 16 %
Retail Vehicle Sales Mix
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Three Months Ended Nine Months Ended
November 30 November 30
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2004 2003 2004 2003
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Vehicle units:
Used vehicles................ 93% 91% 92% 91%
New vehicles................. 7 9 8 9
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Total........................ 100% 100% 100% 100%
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Vehicle dollars:
Used vehicles................ 89% 87% 88% 87%
New vehicles................. 11 13 12 13
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Total........................ 100% 100% 100% 100%
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Retail Unit Sales
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Three Months Ended Nine Months Ended
November 30 November 30
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2004 2003 2004 2003
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Used vehicles..................... 58,908 51,361 183,657 169,556
New vehicles...................... 4,765 5,079 16,365 16,804
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Total............................. 63,673 56,440 200,022 186,360
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Average Retail Selling Prices
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Three Months Ended Nine Months Ended
November 30 November 30
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2004 2003 2004 2003
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Used vehicles..................... $15,591 $15,393 $15,650 $15,382
New vehicles...................... $23,804 $23,968 $23,562 $23,566
Weighted average.................. $16,205 $16,165 $16,297 $16,120
About CarMax
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CarMax, a Fortune 500 company, is the nation's leading specialty retailer of
used cars. Headquartered in Richmond, Va., CarMax currently operates 58 used car
superstores in 27 markets. CarMax also operates nine new car franchises, all of
which are integrated or co-located with its used car superstores. During the
twelve month period ended November 30, 2004, the company sold 238,200 used cars,
which is 92% of the total 259,402 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 29, 2004, and its
quarterly or current reports as filed with or furnished to the Securities and
Exchange Commission.
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Contacts:
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Investors and Financial Media:
Dandy Barrett, Assistant Vice President, Investor Relations, (804) 935-4591
Celeste Gunter, Manager, Investor Relations, (804) 935-4597
General Media:
Lisa Van Riper, Assistant Vice President, Public Affairs, (804) 935-4594