Investing in Inventory, America’s Car-Mart 3Q Profit Rises 16%

America’s Car-Mart Inc. of Bentonville on Wednesday reported third-quarter net income of $12.7 million, up 16% from $10.9 million in the same quarter last year. 

The publicly traded auto dealer (Nasdaq: CRMT) reported earnings per share was $1.83, up from $1.55 in the third quarter of 2019. Revenue was $186.7 million, up 16% from $161.1 million in the same quarter a year ago.

America’s Car-Mart said it invested $6 million during the quarter to improve vehicle inventory and provide customers with better selection. The company had 145 locations open during the quarter.

“The revenue increases we are experiencing are the direct result of improving operational execution in the field, starting with inventory management,” said CEO and President Jeff Williams. “To pick up market share in this very competitive environment, we will continue to focus on quality vehicles and a broad selection, as customers have many choices. Competition is intense but we are up to the challenge.”

Car-Mart said it sold 13,314 vehicles in the quarter, an increase from 11,963 in the same quarter a year. The average sale price was $11,750, an increase from $11,146.

Same-store revenue growth was 15.1%; a year ago it was 8.5%. The company said it had increased its active customer base to 80,250, up from 75,101 in the same quarter a year ago.

“As we have said, we believe that most all of our dealerships, under the direction of our talented general managers, can support a higher number of customers over time,” Williams said. “We have significant growth opportunities by leveraging our current footprint. The top-line growth we are experiencing supports this view.”

Williams said the company plans to open a dealership in Cabot in the next quarter, which would be America’s Car-Mart’s sixth new site in fiscal 2020. The company announced in December that it was purchasing the Taylor Motor Co. and Auto Credit of Southern Illinois to give the company facilities in its 12th state. 

Williams said the deal hasn’t been finalized because of paperwork delays. Taylor has three dealerships and a reconditioning facility.

“New dealership openings are an important part of our growth plans and we will continue to add locations at a rate that matches our ability to support this high touch business,” Williams said.