CarMax Inc. (KMX - Free Report) recently purchased a 25 acre Carnegie Row plot on the AutoMile in Norwood, Massachusetts, according to a source. The company has invested $20 million for the acquisition and intends to build an auto superstore there.
The superstore will be build after demolishing the existing 115,000-square-foot building, formerly a Home Quarters Warehouse. The store will be serving as a showroom and service centre for 400 vehicles. CarMax currently has a dealership in North Attleboro, Massachusetts.
The company continues to focus on its plan of opening 10 superstores in fiscal 2013 and 10 to 15 superstores during each of the following three fiscal years . In the second quarter of fiscal 2013, the company opened three used car superstores - two in Ft. Myers, Florida, and the other in Nashville, Tennessee.
CarMax reported a profit of $111.6 million in the second quarter of fiscal 2013 (ended on August 31, 2012), which was flat compared with the prior-year quarter. 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 by 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 November 8, 2012.
CarMax competes with AutoNation Inc. (AN - Free Report) and Penske Automotive Group (PAG - Free Report) . The company 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.