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Letter to the Editor

CarMax Announces Growth Plan Details

RICHMOND, Va. -- The CarMax Group has announced details of its growth plan and provided updated store economics for its used-car superstore prototypes to help investors assess the impact of new- store growth on CarMax profitability.

"Assuming that our used-car business continues to meet our expectations, we intend to gradually ramp up store growth over the next several years," said W. Austin Ligon, president of CarMax. "We believe the store growth expectations we are releasing today could result in a 15 percent to 20 percent annual growth rate on our installed base, allowing us to double sales to approximately $5 billion over the next five years and, with leverage from sales growth, increase our operating margins."

For the next several years, the company plans to focus its geographic growth on single-store markets and satellite fill-in stores in its existing multi-store markets. "We believe the approximately 35 single-store markets that we have not yet entered provide the most attractive near-term expansion opportunity for us," said Ligon. "We also believe that we can add 10 satellite stores in our existing multi-store markets." CarMax currently operates in the multi-store markets Washington/Baltimore, Chicago, Atlanta, Dallas, Houston, Miami and Tampa.

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