In this segment from the Motley Fool Money radio show, host Chris Hill, Million Dollar Portfolio's Jason Moser, Total Income's Ron Gross, and Motley Fool Pro and Options' Jeff Fischer look under the hood to see what drove second-quarter profits up a remarkable 17% at Carmax (NYSE:KMX), despite the figurative headwinds from the hurricanes that struck Texas and Florida. The answer is, in large part, its Web tactics.
A full transcript follows the video.
This video was recorded on Sept. 22, 2017.
Chris Hill: Second quarter profits for CarMax rose nearly 17%, and shares of CarMax on the rise as well, Jeff.
Jeff Fischer: Yeah. CarMax up 15% year to date. A little better than the S&P 500. Chris, they did really well despite the hurricanes in Florida and Houston affecting business, closing some locations there. What's happening, though, comes right back around to what we talked about so far this entire show. It's all about online. It's fascinating to see that that is their focus. They said results are stronger because of their work on search optimization online, and their work on their online website as a whole driving traffic, driving sales. And then, the first few questions in the conference call were not about hurricanes, like I expected, but about how they're photographing their cars and presenting them online, and what else they're adding to their online presentations to drive more volume. So it's really the direction our world is going, even for giant, heavy items like an automobile.
Hill: When you talk about how some of their locations, particularly in the Houston area, were closed as a result of the hurricanes, are they moving to a world where they're having fewer locations, and more centralized, huge parking lots or something, where they're essentially storing their cars and driving more of the business online?
Fischer: Interesting question. I could see them going that way down the road. Right now, they're closing underperforming stores, but they're still opening new locations. They're still in growth mode. But really, online is changing everything, Chris.