Car-Mart’s 3Q Profit Up 9.31 Percent
by February 19, 2013 10:23 am 146 views
America’s Car-Mart Inc. shares were climbing Tuesday on news of the company’s gain in third-quarter profit.
The Bentonville-based used-car retailer released earnings late Monday, reporting net profit of $7.98 million, or 84 cents per share, for the quarter that ended Jan. 31. That’s up 9.31 percent from earnings of $7.3 million, or 73 cents per share, in the same period a year ago.
At mid-morning Tuesday, Car-Mart’s shares were trading at $46.82, up $5.26 or 12.66 percent, on the Nasdaq. Shares have traded between $35.81 and $49.20 in the past year.
The company’s earnings surpassed the average estimate of 73 cents per share from four analysts surveyed by Thomson Reuters.
Revenue rose 12.86 percent to $118.92 million.
Car-Mart saw retail unit sales grew 16.04 percent to 10,403 from 8,965 in the same quarter last year. Operating in 10 states, it has opened eight locations since last year’s third quarter. It opened its 120th store, in Bethel Heights, on Jan. 31.
The company focuses on the “buy here, pay here” segment of the used-car market, providing financing for most of its customers.
Despite increased competition in the sub-prime auto lending market that put pressure on sales earlier in the year, president and CEO William H. “Hank” Henderson said in a news release, “our general managers stepped up to the challenge and delivered.”
“We strongly believe that Car-Mart’s local presence and face-to-face relationships give us the ability to work with customers most effectively,” Henderson said.
CFO Jeff Williams said in the release that revenue at stores open at least a year grew 8 percent, “and the performance of our older, more mature dealerships improved significantly from the previous quarter.”
“When we look to the future, we are convinced that the business model will continue to support significant unit volume expansion,” he said.