CarMax Mulling New Store At Raleigh
Used car retailer CarMax Inc. (NYSE:KMX) is planning to launch a store in northeast Raleigh. The store is well spread out occupying around 18 acres of land. It is located at the intersection of Capital Boulevard and Perry Creek Road, which is about a mile north of Interstate 540.
Currently, the company has a store on Glenwood Avenue located at Ebenezer Church Road and another at Capital Boulevard in Raleigh. These stores are exclusively geared for buying vehicles and for not selling.
CarMax, in April 2012, opened its first auto superstore in Bakersfield, California, thereby expanding its footprint in the state. Located at 6801 Colony Street, the store covers over 41,800 square-feet of area. This new superstore with a capacity of 300 used vehicles has provided job opportunities to more than 80 employees.
The company’s superstores offer customers a great deal of satisfaction with no hassles and haggling on prices; offering a wide range of choice; high quality vehicles; and a customer-friendly sales process. CarMax believes that long-term growth opportunities will stem essentially from higher sales of vehicles, both from the new stores and stores included in the comparable store base.
The company has plans to open around 10 superstores in fiscal 2013. In the next three fiscal years as many as 10 to 15 stores would be launched. In accordance with the plan, the locations of the new stores, in fiscal 2013, are in or around Lancaster in Pennsylvania (opened in March), Bakersfield in California (opened in April), Nashville in Tennessee, Fort Myers in Florida, Naples in Florida, Oxnard in California, Des Moines in Iowa and two stores in Denver at Colorado and Jackonsville in Florida.
CarMax is the one of the largest retailers of used vehicles. The company pioneered the used car superstore concept with the inauguration of the first store in I993. As of February 29, 2012, the company operated around 108 used car superstores in 53 markets.
CarMax currently retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. We appreciate its focus on the used-car market, which helps it to outperform the industry. The automotive retailer is among the strongest operators in its peer group, which includes AutoNation Inc. (NYSE:AN) and Penske Automotive Group (NYSE:PAG).
However, the company faces increased competition. We currently have a long-term (more than 6 months) Neutral recommendation on the stock.