Car-Mart 2Q Profit Falls 6.19 Percent

America’s Car-Mart Inc. posted net income of $7.28 million, or 76 cents per share, for the quarter that ended Oct. 31, down from $7.76 million, or 77 cents per share, a year earlier.

The Bentonville-based used-car dealer missed the average earnings estimate of 87 cents per share from four analysts surveyed by Thomson Reuters.

Revenue, from both sales and interest income, fell 0.5 percent to $110.22 million.

The results, posted Nov. 19, sent Car-Mart’s shares plummeting. They were down 12 percent, or $5.03, at press time, trading at $36.88 on the Nasdaq. Shares have traded between $33.04 and $49.20 in the past year.

Car-Mart 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 117th dealership last month, in Oxford, Miss.

The number of cars sold fell 1.1 percent in the quarter, from 9,919 a year earlier to 9,814. The average sale prices slipped 0.4 percent, from $9,557 to $9,515.

Acknowledging the company is facing some “near-term revenue challenges,” Car-Mart president and CEO William H. “Hank” Henderson said in a news release that “we are convinced that the direction we are going will provide significant profitable long-term opportunities for America’s Car-Mart.”

He added that increased funding in the subprime market has given buyers more financing options, but Car-Mart is taking steps to retain its better customers.

“We believe that Car-Mart’s local presence and face-to-face relationships give us the ability to work with customers far more effectively than subprime finance companies,” he said in the release.