CarMax Reports Record Second Quarter Sales; Raises Second Quarter Earnings Expectations
RICHMOND, Va., Sept. 5 -- CarMax, Inc. today reported record sales for the second quarter ended August 31, 2003.
* Total sales rose 14% to $1.24 billion from $1.08 billion in the same
period last year.
* Comparable store used unit sales rose 6% for the quarter.
* The company now expects second quarter earnings to be approximately 36
cents per share, above the previously anticipated range of 33 cents to
35 cents.
Sales Commentary
"We are pleased to have achieved second quarter used unit comp growth of 6%, particularly in light of somewhat higher-than-expected cannibalization by our new stores of roughly 1 to 2%," said Austin Ligon, president and chief executive officer of CarMax. "Our emphasis on continually improving execution continues to pay off, and we are happy that our new stores are performing within the range of our expectations.
"For the third quarter, we estimate used unit comp growth of 5 to 7%," Ligon said, "with fourth quarter used unit comp growth somewhat higher."
Second Quarter Earnings Expectations
"We experienced higher-than-anticipated margins in service, wholesale vehicle and used vehicle sales during the quarter," Ligon said. "The positive earnings effect of these higher margins will, we expect, be partially offset by lower-than-anticipated income from CarMax Auto Finance. Though still within the range of our annual expectations, our cost of funds rose somewhat faster than predicted, compressing the spreads at CAF more than we had projected for the quarter. Even so, with our higher margins we are anticipating second quarter earnings of approximately 36 cents per share, modestly above our previous expectations in the range of 33 to 35 cents." In the prior year's second quarter, CarMax reported net earnings per share of 30 cents, including 2 cents of costs associated with the separation from Circuit City. Excluding these separation costs, the prior year's second quarter earnings per share were 32 cents.
Comparable Store Retail Vehicle Sales Change
Three Months Ended Six Months Ended
August 31 August 31
2003 2002 2003 2002
Vehicle units:
Used vehicles 6 % 12 % 8 % 12 %
New vehicles (9)% 5 % (4)% 1 %
Total 4 % 11 % 7 % 10 %
Vehicle dollars:
Used vehicles 7 % 12 % 8 % 13 %
New vehicles (8)% 8 % (3)% 2 %
Total 5 % 11 % 6 % 11 %
Percent Retail Vehicle Sales
Three Months Ended Six Months Ended
August 31 August 31
2003 2002 2003 2002
Vehicle units:
Used vehicles 91 % 89 % 91 % 89 %
New vehicles 9 11 9 11
Total 100 % 100 % 100 % 100 %
Vehicle dollars:
Used vehicles 87 % 84 % 87 % 84 %
New vehicles 13 16 13 16
Total 100 % 100 % 100 % 100 %
Retail Unit Sales
Three Months Ended Six Months Ended
August 31 August 31
2003 2002 2003 2002
Used vehicles 60,150 50,877 118,195 98,187
New vehicles 5,842 6,489 11,725 12,225
Total 65,992 57,366 129,920 110,412
Average Retail Selling Prices
Three Months Ended Six Months Ended
August 31 August 31
2003 2002 2003 2002
Used vehicles $15,484 $15,378 $15,377 $15,437
New vehicles $23,723 $23,361 $23,392 $23,206
Weighted average $16,214 $16,281 $16,100 $16,297
Store Openings
CarMax opened 2 superstores during the second quarter, entering the Birmingham, Ala., market with a standard superstore and adding a satellite superstore in Sanford, Fla., in the Orlando market. The company has opened 4 superstores thus far in fiscal 2004 and plans to add 4 or 5 superstores during the second half of the fiscal year.
Earnings Release and Conference Call Information
CarMax will release second quarter earnings on Friday, September 19, 2003. The company will host a conference call for investors at 10:00 a.m. Eastern time on that date. Domestic investors may access the call at 1-888-298-3261 (conference I.D.: 2632529). International investors should dial 1-706-679- 7457 (conference I.D.: 2632529). 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.
A replay of the call will be available beginning at approximately 2:00 p.m. Eastern time on September 19 and will run through midnight, September 26, 2003. Domestic investors may access the recording at 1-800-642-1687 (conference I.D.: 2632529) and international investors at 1-706-645-9291 (conference I.D.: 2632529). A replay of the call also will be available on the company's investor information home page or at www.streetevents.com.
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 percent of the total 232,003 vehicles the company sold during that period. For more information, access the CarMax Web site at www.carmax.com.