CarMax Reports Record Fourth Quarter Sales
RICHMOND, Va., March 4 -- CarMax, Inc. today reported record sales for the fourth quarter ended February 28, 2005.
* Total sales increased 25% to $1.40 billion from $1.12 billion in the
fourth quarter last year.
* Comparable store used unit sales rose 12% for the quarter.
* Total used unit sales grew 27% for the quarter.
* The company now expects fourth quarter earnings of approximately 28
cents per share compared with 21 cents per share in the fourth quarter
last year.
Commentary
"The fourth quarter sales performance was a terrific finish to a fiscal year that was more difficult than we have seen in a while," said Austin Ligon, president and chief executive officer. "In the fourth quarter, we experienced the strongest sales growth of the fiscal year. Stronger sales occurred both in our more established stores and in our newer superstores, as well as in all our geographic regions. All regions benefited from the seasonal increase in subprime-financed sales that we discussed in our February 22 news release, and all regions also benefited from additional strength in used car sales overall." As anticipated by the company on February 22, 2005, subprime- financed sales contributed an incremental 5 percentage points to comparable store used unit growth in the fourth quarter. CarMax rolled out subprime financing to its full superstore base in August 2004.
"Even during our first and second quarters, when sales performance was disappointing, we believe we continued to gain market share," Ligon said. "For the fiscal year, our used unit comp growth of 1% compares with the estimated industry used car unit decline of approximately 2% in 2004 and a used unit comp performance by the publicly traded new car retailers that we estimate averaged approximately minus 5% in 2004.
"We now expect fourth quarter earnings to be approximately 28 cents per share, up about 33% from fourth quarter EPS last year, " said Ligon. CarMax reported fourth quarter earnings per share of 21 cents in the prior year, which included approximately 1 cent realized from the sale of a new car franchise.
Used Car Store Openings and New Car Franchise Disposals
CarMax opened one superstore during the fourth quarter, a satellite superstore in the Miami, Fla., market on December 1. The company opened nine superstores in fiscal 2005, an 18% increase in the used car superstore base. In December, CarMax announced that in fiscal 2006, ending February 28, 2006, the company expects to open nine superstores, a 16% increase in its used car superstore base.
During the fourth quarter, the company returned to the manufacturer its two remaining Mitsubishi franchises, one at its Dulles superstore in northern Virginia and one in Kenosha, Wis. Following these actions, CarMax has seven new car franchises, consisting of 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.
Retail Vehicle Sales Changes
Three Months Ended Years Ended
February 28 or 29 February 28 or 29
2005 2004 2005 2004
Comparable store vehicle
sales:
Used vehicle units 12 % 5 % 1 % 6 %
New vehicle units (2)% 3 % 8 % (1)%
Total vehicle units 11 % 5 % 1 % 5 %
Used vehicle dollars 14 % 9 % 3 % 7 %
New vehicle dollars (2)% 7 % 8 % 1 %
Total vehicle dollars 13 % 9 % 3 % 6 %
Total vehicle sales:
Used vehicle units 27 % 17 % 13 % 18 %
New vehicle units (12)% (5)% (5)% (3)%
Total vehicle units 24 % 15 % 11 % 16 %
Used vehicle dollars 30 % 21 % 15 % 19 %
New vehicle dollars (11)% (1)% (5)% (1)%
Total vehicle dollars 25 % 18 % 13 % 16 %
Retail Vehicle Sales Mix
Three Months Ended Years Ended
February 28 or 29 February 28 or 29
2005 2004 2005 2004
Vehicle units:
Used vehicles 94 % 92 % 92 % 91 %
New vehicles 6 8 8 9
Total 100 % 100 % 100 % 100 %
Vehicle dollars:
Used vehicles 91 % 88 % 89 % 87 %
New vehicles 9 12 11 13
Total 100 % 100 % 100 % 100 %
Retail Unit Sales
Three Months Ended Years Ended
February 28 or 29 February 28 or 29
2005 2004 2005 2004
Used vehicles 69,511 54,543 253,168 224,099
New vehicles 4,271 4,837 20,636 21,641
Total 73,782 59,380 273,804 245,740
Average Retail Selling Prices
Three Months Ended Years Ended
February 28 or 29 February 28 or 29
2005 2004 2005 2004
Used vehicles $15,698 $15,370 $15,663 $15,379
New vehicles $24,089 $23,942 $23,671 $23,650
Weighted average $16,184 $16,068 $16,267 $16,107
About CarMax
CarMax, a Fortune 500 company and one of the Fortune 2005 "100 Best Companies to Work For," 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 seven new car franchises, all of which are integrated or co-located with its used car superstores. During the twelve month period ended February 28, 2005, the company retailed 253,168 used cars, which is 92 percent of the total 273,804 vehicles the company retailed during that period. For more information, access the CarMax website at http://www.carmax.com/.