Car-Mart earnings surpass forecast

Net income dips to $26.7M in 4Q

Rogers-based America’s Car-Mart reported strong fourth-quarter earnings Monday, posting revenue and profits that beat analysts’ expectations in an environment the company called challenging.

The buy-here pay-here used-car company posted net income of $26.7 million, or $4.01 per share, for the quarter that ended April 30, down when compared with $43.5 million, or $6.19 a share, for the year-ago period. A consensus of four analysts had predicted net income of $3.10 per share for the quarter, according to Yahoo Finance.

Speaking of the company’s net income for the quarter, company Chief Financial Officer Vickie Judy said the results were “especially impressive” in light of inflation and wage pressures.

Car-Mart booked revenue of $352 million for the quarter, up more than 26% when compared with $279 million a year ago. The four analysts’ estimates had called for an average revenue of $297.2 million.

“We are increasing market share while facing challenges stemming from ongoing supply and demand imbalances in the used car

market, inflation, and declining consumer confidence. We expect to see additional productivity improvements as we leverage our investments and competitive strengths,” Jeff Williams, Car-Mart’s president and chief executive officer, said in a statement.

For the year, Car-Mart saw profit of $93.3 million, or $13.67 a share, for its fiscal 2022, compared with $104.1 million, or $14.95 per share, for fiscal 2021. Revenue for the year was $1.2 billion compared with $918.6 million for fiscal 2021.

Car-Mart released earnings Monday after the market closed. It will host a conference call with analysts today at 10 a.m. The live audio of the call may be accessed by calling (877) 776-4031 with the conference ID 6579153. The call will also be webcast on the company’s investor relations page.

Shares of Car-Mart closed at $72.46 in trading Monday, down $1.71, or about 2%, on the Nasdaq exchange. Shares have traded as low as $72.50 and as high as $177.45 over the past year.

“We are mindful that inflation is a headwind for all of our customers; fortunately, significant increases in compensation for lower wage earners provide some offset,” Williams said in a statement. “Our best weapon against inflationary operating cost pressures is a combination of higher volumes and greater efficiency. We believe that we would be selling a significantly greater number of vehicles if we had sufficient availability at lower price points.”

For the fourth quarter, Car-Mart sold 16,426 vehicles, down less than 1% when compared with 16,555 vehicles sold for the same period a year ago. The average retail price was up 24% at $17,860. Gross profit per unit sold was also up at $6,887 compared with $6,032 for the same time last year, a more than 14% gain.

In a release, Williams also indicated the company expected further expansion by adding lots and potentially through acquisitions.

During the quarter, the company repurchased 92,000 shares of its common stock at an average price of approximately $89 per share for a total of $8.2 million.

Car-Mart operates 154 dealerships in 12 states — Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas.