America's Car-Mart Profit Plunges in Final Quarter of Tough Fiscal Year

America's Car-Mart Profit Plunges in Final Quarter of Tough Fiscal Year
America's Car-Mart CEO Jeff Williams (Bob Coleman)

America’s Car-Mart Inc. of Rogers (Nasdaq: CRMT) reported declining profits Wednesday in the final quarter of a tough fiscal year. 

The company reported net income of $2.1 million for the quarter, down 92% from $26.4 million in the same quarter a year ago. Earnings per share came to 32 cents, down from $3.97.

It was the fifth consecutive quarter of declining profits for the auto retailer.

The results fell short of Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of $1.13 per share.

Quarterly revenue for the quarter was $388.3 million, up 12.2% from $346.2 million. But the increase didn’t translate into profits because of higher costs for the company and its customers.

“Ongoing disruption in the used car market challenges us to purchase quality vehicles at affordable prices,” CEO Jeff Williams said. “Our customers face higher living costs due to persistent inflation, higher interest rates, and higher fuel and rent expenses. In response to these challenges, we have had to extend our contract terms to keep payments affordable, however we still face less favorable customer payment behavior and lower gross profit margin.”

For the fiscal year, America’s Car-Mart reported revenue of $1.4 billion, up from $1.08 billion. Income was $20.4 million, down from $95 million, and earnings per share of $3.11, down from $13.92.

America’s Car-Mart reported it had 102,305 customers in fiscal 2023, an increase from 95,107 in 2022. The company has steadily increased its customer count, a key metric internally, from 75,609 in 2018 when it first reported the statistic.

The company reported selling 17,655 vehicles in the fourth quarter, up from 16,426 in the same quarter the year before. The average sale price was $18,133, up from $17,519.

Same-store revenue growth for the quarter was down to 12% from 23.4% the year before.

For the fiscal year, the company reported selling 63,584 vehicles, up from 60,595, at an average price of $18,080, up from $16,372.

Same-store revenue growth was 16.6% for the year, down from 30% in 2022.

“We are currently at a unique time with an unprecedented number of factors impacting both our industry and our company,” Williams said. “While we face certain challenges — which we feel are primarily short-term — the opportunities in front of us have never been greater.”

Williams said America’s Car-Mart has almost completed its technological investments that include software installation for its loan origination system. The company invested $22 million in fiscal 2023 on capital expenditures and expects its entire network of nearly 160 dealerships to be on the LOS by next quarter.

“[W]e have nearly completed the extensive long-term investments we have made over the past several years,” Williams said. “We believe these investments will enable us to operate efficiently and at scale, ultimately leading to higher long-term returns for our shareholders.”

Shares of the company were down 10% Wednesday morning. For the year to date, shares were up 14%.

The Associated Press contributed information to this report.

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