Car-Mart Earnings Dip On Competitive Pressures

America’s Car-Mart reported higher sales and lower profits as company officials noted that competitive pressures continue to squeeze margins.

The Bentonville-based “buy here, pay here” used car dealer posted net income of $5.8 million in its second quarter, down from $7.3 million one year ago.

Revenues climbed higher to $121 million compared to $110 million for the prior year’s quarter.

Same-store sales, a key sales metric, increased 3.8%; however, the average number of retail units sold per dealership per month fell to 27.6, down from 28.2 one year ago.

“We believe that many companies that are competing for our customers on the funding side are not focused on earning repeat business tied to customer success,” said CEO Hank Henderson. “This is a reality that is having a negative effect on our business especially on the provision for credit loss line. We remain committed to the belief that the only way to run this business for the long-term is to do everything possible to help customers successfully complete the terms of their contracts.”

America’s Car-Mart has been on an expansion mode in recent quarters. The company has been adding about one new dealership a month, and now boasts 129 locations.

“We are pleased with our top line growth in this presently challenging competitive environment. We are excited about our future and proud of the great work of our associates as they take care of our customers. We are highly focused on increasing customer success and tightening expenses while ensuring that our infrastructure remains solid to support the business,” Henderson said.

America’s Car-Mart shares (NASDAQ: CRMT) closed trading on Tuesday at $42.75. The company’s stock has traded between $35.89 and $50.59 per share during the past year.