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Jax Daily Record Monday, Apr. 16, 201212:00 PM EST

CarMax plans second Jacksonville superstore

by: Mark Basch Contributing Writer

As it released its fourth-quarter earnings, CarMax Inc. also announced that it plans to open a second Jacksonville superstore in the current fiscal year.

Richmond, Va.-based CarMax, which says it is the nation’s largest used-car retailer, announced it will open 10 new stores this year, including one at 7438 Blanding Blvd. The new Jacksonville store is projected to open in the fourth quarter of this fiscal year, which is the period from December through February.

The company apparently considers this to be a significant store. In its quarterly conference call, when CEO Tom Folliard told analysts that CarMax will open 10 stores, Jacksonville was the only location he named (the other nine were announced in its news release).

The 13,500-square-foot store will be built on a 4.9-acre lot. A CarMax spokeswoman said she had no other details on the new store.

CarMax opened its first store in Richmond in September 1993 and currently operates 109 used-car superstores in 54 markets. Its first Jacksonville store opened in 2005 on Atlantic Boulevard.

CarMax says it is “a retail concept, not an auto dealer,” featuring “no-haggle prices.”

The company retailed 408,080 used cars and sold 316,649 vehicles wholesale in the fiscal year that ended Feb. 29, producing $10 billion in revenue, up 11 percent from fiscal 2011.

CarMax’s earnings rose 10 percent in fiscal 2012 to $413.8 million, or $1.79 per share.

Analyst sees second-half rebound for Stein Mart stock

Stein Mart Inc. reported another lackluster sales month in March, with total sales rising 0.4 percent to $127.5 million but comparable-store sales falling 0.3 percent.

The company’s stock has been stuck around the $7 level for about eight months as investors look for signs that its revamped sales strategy is paying off. Avondale Partners analyst Mark Montagna thinks investors might see those signs in the second half of this year, which “may prove to be the inflection point of a steady upward trend in sales, margin and EPS.”

“We do not anticipate a rocket ship of a rebound,” Montagna said in his research report on Stein Mart. He said several trends could work in the Jacksonville-based fashion retailer’s favor.

One is a continuing decline in recent years in comparable-store sales, or sales at stores that have been open for at least one year. That makes it easier to record an improvement in sales this year.

Stein Mart’s comparable-store sales declined by 2.9 percent in the third quarter and 2.2 percent in the fourth quarter last year.

“If comparable-store sales can turn positive, it represents a powerful opportunity to leverage the stellar job Stein Mart has done reducing SGA (selling, general and administrative expenses) and managing inventory,” Montagna said.

Last year’s third quarter was hurt by “the $1.2 million marketing mistake of marketing to younger customers and the subsequent hit to sales caused by not focusing on its core customer base,” he said.

Stein Mart has been working for months to return to its original everyday low price strategy and turning away from coupons to lure in customers.

“We expect Stein Mart’s customer to be easily re-educated to the reduced couponing since the couponing kick had only been in place for 1.5 years,” Montagna said.

Besides the opportunity for sales improvements, Montagna also cited the strong balance sheet that “reinforces the investment merits of Stein Mart for value investors.” He speculates that the company might pay a special cash dividend to shareholders this year, which Stein Mart has done twice in recent years.

Montagna maintains a “market perform” rating on the stock with a $7 price target, but he says investors should monitor Stein Mart “for definitive positive progress on sales and margins.”

Bloomin’ Brands files for IPO

It’s not headquartered here, but you might be interested to know that Tampa-based Bloomin’ Brands Inc. filed a registration statement with the Securities and Exchange Commission for an initial public offering.

If you haven’t already guessed what Bloomin’ Brands is, it’s the company that owns Outback Steakhouse and four other restaurant chains: Carrabba’s Italian Grill, Bonefish Grill, Roy’s and Fleming’s Prime Steakhouse and Wine Bar.

Outback is the biggest chain in the company, accounting for nearly two-thirds of its 1,248 company-owned and operated restaurants.

Bloomin’ Brands was formed by buyout firms Bain Capital Partners LLC and Catterton Management Company LLC to buy the restaurant company then known as OSI Restaurant Partners Inc. in 2007.

OSI was publicly traded before the buyout and as is typical of these deals, the buyers are now looking to cash in on their investment by selling shares to the public again, now that the company has turned profitable.

The IPO filing said that Bain and Catterton will retain a controlling interest in the company after the stock sale, but it doesn’t say how many shares will be sold.

The filing said the company has turned around from a $64.5 million net loss three years ago to a $100 million profit last year. Comparable-restaurant sales grew by 4.9 percent last year, with total sales reaching $3.8 billion.

Vulcan and Martin Marietta in proxy fight

Vulcan Materials Co. last week filed a preliminary proxy statement for its annual meeting that said “this year’s annual meeting is especially important.” The proxy did not say when the meeting will take place.

The Birmingham, Ala.-based company did say why the meeting will be important, though.

“Martin Marietta Materials, Inc. is continuing its hostile campaign to acquire Vulcan for far less than we believe it is worth and is seeking to place their own hand-picked candidates on your board in an ‘important step toward a possible transaction’ (to use their own words), a transaction that your board has unanimously determined is inadequate, substantially undervalues Vulcan and is not in the best interests of Vulcan and its shareholders,” the proxy said.

After unsuccessful negotiations to arrange a merger of the two construction materials companies, Martin Marietta launched a hostile takeover bid in December by taking its $4.8 billion offer directly to Vulcan shareholders. Last month, Martin Marietta filed its own proxy seeking to elect four representatives to Vulcan’s 10-member board.

“We are soliciting your vote because we believe, based on Vulcan’s outright rejection of our proposal and refusal, as of the date of this preliminary proxy statement, to engage with us to discuss our business combination, that the current directors of Vulcan are not acting, and will not act, in your best interests with respect to our proposal for a business combination between Vulcan and Martin Marietta,” Martin Marietta’s proxy filing said.

Vulcan is asking its shareholders to reject the four Martin Marietta nominees and vote instead for the four existing Vulcan board members who are up for re-election this year.

CSX begins earnings season

It seems like we just finished with an earnings season when a few Jacksonville-based companies filed their year-end reports at the end of March. But another earnings season kicks off this week for local public companies when CSX Corp. reports its first-quarter results after the stock market closes Tuesday.

You will recall that many investors were concerned about CSX’s earnings because of fears that reduced coal shipments will hurt the results. But Chief Financial Officer Fredrik Eliasson told an investor conference last month that the company expects record first-quarter earnings.

“This is due to solid performances in most other segments, leading to an expectation of growth in over 70 percent of the company’s total business in 2012,” Dahlman Rose & Co. analyst Jason Seidl said in a research note.

“Indeed, as the macroeconomic environment continues to improve, growth in intermodal and merchandise should offset the utility coal weakness,” Seidl said.

ParkerVision raises additional capital

After saying the previous week that it was seeking to raise additional capital, Jacksonville-based ParkerVision Inc. announced Friday the sale of about 8.1 million shares of stock for $1.05 each to unnamed investors.

ParkerVision expects the net proceeds from the sale to be about $8.4 million.

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