Car-Mart Shares Fall on Dip in 1Q Profit

America’s Car-Mart Inc.’s report of a 1.81 percent drop in first-quarter profit sent share prices down nearly 10 percent Friday morning.

The Bentonville-based used-car dealer, reporting late Thursday, said it earned $8.11 million, or 83 cents per share, for the quarter that ended July 31, compared to $8.27 million, or 78 cents per share, a year earlier.

The company missed the average earnings estimate of 87 cents per share from four analysts surveyed by Thomson Reuters.

Revenue, from both sales and interest income, rose 9.4 percent to $110 million.

The number of cars sold grew 7.8 percent in the quarter, to 9,753 from 9,049 a year earlier. However, the average retail sale price of its vehicles dropped $200, or 2 percent, from the fourth quarter.

President and CEO William H. “Hank” Henderson said in a news release that he was pleased with the quarter’s results, especially in light of the drop in average sale price, which he said helps keep Car-Mart’s vehicles affordable.

In the release, chief financial officer Jeff Williams said, “The fact that we saw a significant sequential decrease in our average retail sales price did have somewhat of a negative short-term effect on gross margin dollars, selling, general and administrative expense leveraging and the overall credit loss percentage, but once again, when we look to the long term, we are convinced that we are moving in the right direction to maximize customer success and, as a result, shareholder value.”

The company focuses on the “buy here, pay here” segment of the used-car market, providing financing for most of its customers. Operating in nine states in the South and Midwest, Car-Mart opened its 116th dealership in July, in St. Joseph, Mo.

Car-Mart’s shares were at $43.90, down $4.70 or 9.67 percent, in late-morning trading on the Nasdaq. Shares have traded between $25.81 and $49.20 in the past year.