CarMax Inc. (NYSE:KMX) Q2 2021 Earnings Conference Call - Final Transcript
Sep 24, 2020 • 09:00 am ET
Thank you. [Operator Instructions] Our first question this morning comes from John Murphy from Bank of America. Please go ahead.
Good morning, guys. And great execution in this environment, it is really impressive stuff. Bill, there is one statement in the press release that is kind of intriguing. You're saying inventory was a headwind to sales in the quarter. I'm just curious if you kind of expand upon that, if you think that will be relieved here -- in near term it sounds like in September it was to some degree, but also as all these omni-channel efforts bear fruit and bring customers in, how do you think about sort of the change in inventory management as your addressable market grows dramatically? And do you need to inventory more or think about inventory in a different way than you have historically?
Yeah, thank you John. Well, first of all I think omni or not omni, it won't change how we manage our inventory. I think it's one of the strengths of the company that we fine-tuned over the last 27 years and we continue and I can't say enough about the team, I mean bumping up our inventory during the quarter by 50% is truly tremendous. And I think in any normal environment having that amount of inventory shortage would be a significant headwind to sales. Now having said that, we're far from a normal environment and I think it's hard to quantify the exact degree of how much it impacted our sales other than it absolutely had an impact of sales. But in the COVID environment, there are lot of other competitors that were light on inventory, you had some stimulus money out there, so it's hard to know kind of what the offsets were to that -- to that headwind, but again, I just go back to saying that the team has done a remarkable job both buying and producing to get us into the spot where we are today. We ended the quarter -- we were still light on inventory when we ended the quarter, but as of today we feel really good about our total inventory position.
Okay. I'm sorry just one follow-up real quick, I mean on the -- in the future as omni-channel expands, I mean would you think you need to bump up your inventories, you have to go with that or would you just be turning and be much more efficient on inventory? Just trying to gauge if inventory would go up 10%, 20%, 30%, 40%, 50%, as these efforts really take off and if there were needed to be something else in the mix? Or are you just look [Speech Overlap]
Yeah, I mean we went down the omni path because we expect this. This is a better customer experience, and we expect to sell more cars. And if we are selling more cars that will also be reflected in our inventory. We'll have -- we'll have more inventory. So, and I