CarMax Inc. (KMX - Free Report) announced that its board of directors has approved a share repurchase program worth $300 million. The authorization is effective instantly and will expire on December 31, 2013.
The repurchase will take place either in open market or privately. Meanwhile, the transaction is expected to comply with Securities and Exchange Commission Rule 10b-18. With this share repurchase program, the company seeks to enhance shareholders value and achieve the targeted growth plan.
The company continues to focus on its plan of opening 10 superstores in fiscal 2013 and 10 to 15 superstores during each of the three fiscal years after fiscal 2013. In the second quarter of fiscal 2013, the company has opened three used car superstores; two in Ft. Myers, Florida, and the other in Nashville, Tennessee.
In the second quarter of fiscal 2013 (ended on August 31, 2012), CarMax, reported a profit of $111.6 million, which was flat compared to the prior year. The company’s earnings of 48 cents per share in the quarter missed the Zacks Consensus Estimate of 52 cents.
Net sales and operating revenues increased 6.6% year over year to $2.76 billion, surpassing the Zacks Consensus Estimate of $2.74 billion. Used vehicle sales improved 8.8% to $2.2 billion due to higher unit sales. Unit sales went up 8.3% to 111,316 vehicles and average selling price marginally increased 0.4% to $19,494.
CarMax is one of the largest retailers of used vehicles. The company pioneered the used car superstore concept with the inauguration of its first store in 1993. It operated around 115 used car superstores in 57 markets as of October 18, 2012.
CarMax, which competes with AutoNation Inc. (AN - Free Report) and Penske Automotive Group (PAG - Free Report) , maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. Currently, we have a long-term Neutral recommendation on its shares.