CarMax Stock Down 47% This Past Year, But One Fund Is Betting $6 Million on a Turnaround

Core Insights - BML Capital Management disclosed a new position in CarMax, acquiring 155,000 shares valued at approximately $5.99 million [1][2] - The new position represents 5.18% of BML Capital's reported 13F assets under management [3] Company Overview - CarMax is a retailer of used vehicles in the United States, utilizing a nationwide footprint and a multi-channel sales approach [6] - The company reported a revenue of $25.94 billion and a net income of $457.84 million [4] - As of February 2, CarMax's market capitalization was $6.58 billion, with shares priced at $44.78, reflecting a 46.84% decline over the past year [3][4] Financial Performance - CarMax's third-quarter results indicated a decline in retail used unit sales by 8% year over year and comparable sales down 9% [11] - Earnings per share fell to $0.43 from $0.81 a year earlier, with gross profit per retail unit declining to $2,235 [11] - Despite lower volumes, CarMax generated $590 million in gross profit and $174.7 million in income from CarMax Auto Finance, which grew over 9% year over year [12] Strategic Initiatives - Management is targeting at least $150 million in SG&A run-rate savings by fiscal 2027 while continuing aggressive stock buybacks, having repurchased $201.6 million of stock in the last quarter [12] - BML Capital's investment in CarMax indicates a structural choice to allocate capital to a cash-generative retailer amidst a portfolio dominated by early-stage biotech and asymmetric growth names [10]