Hank Henderson
America’s Car-Mart Inc. of Bentonville reported a loss of $485,000 in the second quarter of fiscal 2016.
The income was a decrease from $7.5 million in the same quarter of 2015. Revenue was down slightly to $133 million from $133.8 million in the same quarter.
The company said it took a $3 million hit for a non-cash, after-tax charge because of credit losses. Earnings per share were reported at a loss of 6 cents, compared to 83 cents in the same quarter previously.
Car-Mart said without the $3 million write-off it would have had earnings per share of 29 cents. Car-Mart reported an increase in net charge-off — writing off a debt it believes it won’t collect — from 7 percent to 7.8 percent, as measured against the company’s average financial receivables.
The company opened three new dealerships in the quarter for a total of 146 but saw same-store sales decline 3.4 percent. Car-Mart sold 10,881 vehicles, a decrease from the 12,084 sold in the same quarter of 2015.
There was also a significant drop in vehicles sold per store per month, from 29.6 in 2015 to 25.3 this quarter.
Car-Mart CEO Hank Henderson said the company had a decent August but sales “softened” in September and October. He said Car-Mart revised its underwriting reviews and made inventory changes that hurt sales in the short term.
Car-Mart continues to have problems with operations at some dealerships, Henderson said.
“The competitive landscape remains intense, and we have to get much better and more consistent operationally,” Henderson said in a statement. “Credit losses for the quarter were certainly higher than anticipated and relate in part to the quality of our inventory as well as the competitive environment.
“Our first order of business at this time, however, is to address our current operational challenges. Our inventory continues to improve, and we expect sales volumes to pick back up as we move forward.”
For the year, Car-Mart’s revenue was $275.7 million, up from $261.2 million in the first two quarters of 2015. Income was $4.1 million, down from $14.8 million.
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