RICHMOND, VA-CarMax Inc. is on a roll. It opened four superstores during first quarter, including a standard superstore format in Hartford, CT, representing its first foray into the Northeast. The others were a standard and a satellite superstore in Columbus, OH and the standard version in Oklahoma City.

It also opened its first CarMax Car Buying Center, a test site in Atlanta, which focuses on appraisals and vehicle purchases. The opening is part of the locally based car dealer company’s long-term effort to increase appraisal traffic and achieve retail vehicle sourcing self-sufficiency, according to Austin Ligon, president and CEO.

Another seven superstore openings are planned for the back half of the year. The company currently operates 71 used car superstores in 34 markets and seven new car franchises, which are either integrated or co-located with the used car facilities.

Comp sales at used car units were up 6% for the quarter, “modestly ahead of our expectations,” Ligon said during a conference call. New vehicle sales dropped 11.7% compared with the same quarter a year ago. Ligon said the drop reflected “the softer new car industry trends, particularly for the domestic manufacturers that we represent, and our strategic decision to increase targeted gross margin dollars per unit on new vehicles.”

Yet, total sales reached nearly $1.9 billion, up 19% compared with the same quarter the previous year. Net earnings for the most recent quarter rose to $56.8 million, a 54% increase over the same quarter a year ago to set a record for the company.

Overall, Ligon said, “we are very pleased with our first quarter sales performance. We benefited from stronger traffic and continued excellent execution by our store teams. Also, we did not see a repeat of the unusually volatile sales patterns that we experienced in the first quarter of the two previous fiscal years.”

Looking forward, CarMax allows for a wide range of possibilities, but all call for positive increases in performance. “For the year, we continue to expect comparable store used unit growth in the range of 2% to 8%,” Ligon said. “Although our first quarter earnings were significantly stronger than expected, we think it is premature to change our fiscal year earnings so early in the year. If sales trends were to continue as we have seen them in the first quarter, we would expect to hit the upper end of the $1.25 to $1.47 (per share) range. However, based on the volatility we’ve seen in recent years, we are not willing to adjust our estimate until we are further into the fiscal year.”

Following the June 19 conference call, shares of KMX bucked the Dow’s downward trend to trade at $34.14 a share, up nearly 8.4% since the NYSE’s opening for the day. The 52-week low of $25.31 a share occurred on June 27, 2005, and the 52-week high of $36.40 a share was struck on March 15 this year.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

 

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.