CarMax Inc. plans to open 11 used-vehicle stores in its fiscal year that begins March 1. Those additions would increase the number of CarMax stores by almost 16 percent.
New outlets in Hartford and New Haven, Conn., will represent the retailer's first foray into the northeastern United States.
CarMax CEO Austin Ligon says his company has avoided the Northeast largely because of its sluggish growth in used-vehicle sales and the high cost of advertising in the New York market. But he says the two Connecticut stores "will give us good media efficiency."
"It's a good opportunity to test out the Northeast," Ligon told industry analysts during a conference call late last month.
CarMax, of Richmond, Va., also plans to open a store in Charlottesville, Va. -- its first in a small market.
Ligon says the company expects "to learn quite a bit" from the Charlottesville store about how to operate in small stand-alone markets within larger regions. Charlottesville is near the Washington, D.C., and Richmond areas, where the company has stores.
The Charlottesville store will have an inventory of about 150 used vehicles, Ligon says. A standard CarMax store typically stocks 350 to 500 vehicles.
During its next fiscal year, CarMax also plans to enter the Columbus, Ohio, market with two stores and the Oklahoma City market with one store.
The company also intends to add two stores in Los Angeles and one store each in Austin, Texas; Charlotte, N.C.; and Fredericksburg, Va.
The new operations "will help us continue our growth plan," Ligon says.
During its fiscal third quarter, which ended Nov. 30, CarMax reported sales of $1.42 billion. That was a 17.1 percent increase over the year-ago period.
The company's quarterly profits rose by 46.4 percent, to $26.4 million.
The company's sales for the first nine months of its current fiscal year were $4.63 billion, up 20.0 percent over the year-ago period. Its profits for those nine months were $107.7 million -- a 29.3 percent increase.
CarMax sold 66,680 used vehicles in its fiscal third quarter, 13.2 percent more than in the year-ago quarter.
In the nine months that ended Nov. 30, the company sold 216,439 used vehicles, a 17.8 percent increase over the same period last year.
CarMax says it wants to increase annual sales to $10 billion by 2010.
The company has 67 used-vehicle stores in 31 U.S. markets. It also operates seven new-vehicle franchises.
You may e-mail Arlena Sawyers at [email protected]