CarMax 2011 Annual Report Download - page 9

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CarMax 2011 7
CARMAX MARKETS
DISCOVERING EFFICIENCIES
Despite our return to measured store growth in fi scal
2011, we maintained the momentum we achieved when
we temporarily suspended growth by continuing our focus
on BUILDING A BETTER CARMAX and putting in place a
multi-year process for becoming a leaner company.
Our process engineering and service operations groups
partnered to ELIMINATE WASTE through a greater focus
on problem solving and the systemwide standardiza-
tion of processes, while still MAINTAINING OUR QUALITY
standard. As of the end of fi scal 2011, we estimate our
efforts over recent years have allowed us to achieve a
sustainable reduction in average reconditioning costs
of approximately $250 per vehicle, on a cumulative
basis. We believe that further application of what we’ve
learned will allow us to continue identifying opportuni-
ties to streamline our systems and reduce waste.
Since its establishment in late 2008, the CarMax
OPERATIONAL EXCELLENCE TEAM has led over 700
associates in approximately 100 kaizen problem-
solving events that have contributed to our collective
EFFICIENCY GAINS and signifi cant OVERHEAD SAVINGS.
We expect that these events will continue to identify
opportunities and develop solutions for process improve-
ments that not only could result in time and cost savings
but also enhance the experience of our customers, our
associates and our other partners. And as we grow,
we will further leverage these improvements and effi -
ciencies, and we believe they will have an even greater
positive effect on the way we run our business.
As a result of these events and successful cost
man age ment, and despite our return to store growth,
we were able to achieve modest selling, general and
administrative (SG&A) leverage during fi scal 2011.
We were especially pleased with this performance
given the fact that commissions and other variable
costs rise as sales grow. We also increased our
advertising along with sales growth and added back
some previously delayed initiatives we believe will
support the LONG-TERM HEALTH AND COMPETITIVENESS
of CarMax.
Existing Markets
Opening in Fiscal 2012
ALABAMA
Birmingham
Huntsville
ARIZONA
Tucson
Phoenix (2)
CALIFORNIA
Fresno
Los Angeles (9)
Sacramento (2)
San Diego (2)*
COLORADO
Colorado Springs
CONNECTICUT
Hartford /
New Haven (2)
FLORIDA
Jacksonville
Miami (5)
Orlando (2)
Tampa (2)
CARMAX USED CAR SUPERSTORES
GEORGIA
Atlanta (5)
Augusta
ILLINOIS
Chicago (8)
INDIANA
Indianapolis
KANSAS
Kansas City (2)
Wichita
KENTUCKY
Lexington*
Louisville
LOUISIANA
Baton Rouge*
MASSACHUSETTS
North Attleborough*
MISSISSIPPI
Jackson
NEBRASKA
Omaha
NEVADA
Las Vegas (2)
NEW MEXICO
Albuquerque
NORTH
CAROLINA
Charlotte (4)
Greensboro (2)
Raleigh (2)
OHIO
Cincinnati
Columbus (2)
Dayton
OKLAHOMA
Oklahoma City
Tulsa
SOUTH
CAROLINA
Charleston
Columbia
Greenville
TENNESSEE
Chattanooga*
Knoxville
Memphis
Nashville (2)
TEXAS
Austin (2)
Dallas /
Fort Worth (4)
Houston (4)
San Antonio (2)
UTAH
Salt Lake City
VIRGINIA
Charlottesville
Norfolk / Virginia
Beach (2)
Richmond (2)
WASHINGTON, D.C./
BALTIMORE (7)
WISCONSIN
Milwaukee (2)
*Opening in fi scal 2012 (including one store in San Diego)