Car-Mart Scores Revenue Increase Despite Economy

Like its Bentonville-brother Wal-Mart Stores Inc., America’s Car-Mart Inc. managed to outperform the broader economy even during a brutal second quarter ended Oct. 31 that encompassed the full brunt of the stock market collapse.

Car-Mart reported net income of $3.9 million during the second quarter, up from $3.5 million in the first quarter ended July 31. The company posed 5.5 percent revenue growth for the period year-over-year, with revenues of $72 million versus $68.24 million in 2007.

During the past two quarters, Car-Mart reported, revenues have increased 16.3 percent to $147.64 million from $126.95 million in the year-ago period.

Provisions for credit losses and charge-offs have also declined, the company reported.

After its year-end report beat expectations and showed a tripling of profit from $2.1 million to $6 million, Car-Mart’s shares rocketed from $14.79 on June 24 to $22.67 on Sept. 9, a week before Lehman Brothers collapsed and AIG was bailed out. The widespread market turmoil sent shares as low as $7.92 on Nov. 21, but Car-Mart has recovered somewhat to reach $13.01 on Dec. 4.

Car-Mart CEO Hank Henderson noted the company’s 0.6 percent increase in retail sales during the second quarter.

“It was an increase,” he said in the earnings report. “And we are extremely pleased as we believe we are doing a better job with regard to the quality of our deals as we continue to take a disciplined approach to the structure of our deals and continue to improve our credit scoring system.

“Going forward, contrary to what other auto retailers are forecasting, we believe our sales will continue to increase.”