by Lance Turner
Posted 11/19/2012 05:19 pm
Updated 1 year ago
America's Car-Mart Inc. of Bentonville said Monday that second-quarter net income fell to $7.3 million, down about 5 percent from the same quarter last year.
Quarterly revenues also fell, hitting $110 million, down from $111 million from the same quarter last year. On a same-store basis, sales were down 4.8 percent, the company said.
America's Car-Mart, a publicly traded company (Nasdaq: CRMT) that operates used car lots based on the buy-here, pay-here model, said it repurchased 119,308 shares of common stock during the quarter, or about 1.3 percent of the company, for $5.25 million. The company has now invested about $85 million to repurchase 24.2 percent of its outstanding shares.
William H. "Hank" Henderson, the company's president and CEO, said in a news release that Car-Mart is facing "some near-term revenue challenges."
"The amount of funding for the sub-prime auto industry has increased recently and appears to have had somewhat of a negative effect on our overall revenues during the second quarter, especially in some of our older, more established markets," Henderson said.
"This is not the first time we have seen this situation over our 31-year history, and we are making adjustments to help retain our better repeat customers who now may have a few more options than they have had in the recent past," he said.
The company reported a retail unit sales decrase of 1.1 percent, to 9,814 in the second quarter from 9,919 during the same quarter last year. Average retail sales price also dropped, down $42 from the same quarter last year and $69 from the first quarter of this year.
Still, executives said their focus is on cultivating repeat customers.
"Lower unit sales combined with the fact that we have seen three consecutive sequential quarter decreases in our average retail sales price has had somewhat of a negative short-term effect on gross margin dollars, selling, general and administrative expense leveraging and overall credit losses as a percentage of sales," Jeff Williams, chief financial officer, said. "However, we believe that over the long-term, lower selling prices increase affordability and resulting customer success.
"The current macroeconomic environment continues to be challenging and all of our efforts will be aimed at creating value over the long-term. When we look to the future we are convinced that the business model will support significant volume expansion," he said.
During the quarter, the company opened a new dealership in Oxford, Miss., its 117th.