CarMax Inc.

Date: Mar 30, 2005
Contributor: Selena Kloster

CarMax Profit Up Sharply As Sales Climb

CarMax Inc., the country's largest used-car dealer, Wednesday said its profit rose sharply in the latest quarter as sales accelerated.
The Richmond-based company said that for the fiscal fourth quarter ended Feb. 28, net earnings increased 32 percent to $29.7 million, or 28 cents a share. That compares with the prior year's $22.5 million, or 21 cents a share.

Earnings per share matched the average analyst forecast in a Thomson First Call survey.

The latest result also matched a forecast that CarMax had raised three times in little more than a month.

Revenue for fourth quarter jumped 25 percent to $1.4 billion from $1.12 billion, matching analysts' average estimate. Same-store sales, or sales generated at stores open at least a year, increased 11 percent, CarMax said.

"Our superstores just kept beating their bonus targets, even as we continued to raise the targets in response to the improving sales trends," Chief Executive Officer Austin Ligon said in a statement.

There has been renewed sales strength at both the company's established and newer stores and in all geographic regions, he said.

CarMax shares fell $1.70, or 5.1 percent, to $31.50 in early trading Wednesday on the New York Stock Exchange.

For all of fiscal 2005, net earnings declined to $112.9 million, or $1.07 a share, from the previous year's $116.5 million, or $1.10 a share.

Revenue rose about 15 percent to $5.3 billion from $4.6 billion.

The company currently operates 59 used-car superstores in 27 markets. CarMax also operates seven new-car franchises as part of used-car superstores.






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