America’s Car Mart Navigating Competitive Environment
by August 20, 2014 6:51 pm 165 views
Net income dipped slightly from one year ago for Bentonville-based America’s Car-Mart as the “buy here, pay here” used car dealer chain continued to navigate a highly competitive environment.
Car-Mart posted first quarter profits of $7.3 million on revenue of $127 million. One year ago, the company reported $7.5 million in net income on revenue of $123 million. Same store sales decreased 1.5%.
“We are pleased with our results for the quarter, especially the sequential improvement in per store productivity. We continue to get better with our lot level execution on the sales side and will push hard with our 33+ year effort to attract good, hard-working customers looking for quality vehicles, affordable payment terms and excellent service,” said William “Hank” Henderson, President and CEO.
Car-Mart has previously singled out “competitive pressures” in its market space, primarily from sub-prime lenders who compete aggressively for financing and sales of used vehicles.
Car-Mart sold 11,482 cars during the quarter, a 7.9% increase from the previous year. The average retail units sold per store per month was 28.4, which the company said was “healthy.”
“We remain convinced that the business model will continue to support significant unit volume expansion. We are excited about our future,” Henderson said.
Other financial highlights for the quarter included:
- Average retail sales price decreased $372 to $9,464 or 3.8% from the prior year quarter and decreased $321 or 3.3% sequentially;
- Collections as a percentage of average Finance Receivables increased to 14.1% from 13.8% for the prior year quarter; and
- Provisions for credit losses of 24.6% of sales vs. 24.3% for prior year quarter.
Car-Mart finished the quarter with 136 dealerships, up 10 locations from one year ago. The company said it planned to open 8 new dealerships in the current fiscal year and would return to a more “historical store opening rate” — which would include more store openings — in 2016 and beyond.
America’s Car-Mart shares (NASDAQ: CRMT) closed trading on Wednesday at $37.19. The company’s stock has traded between $34.56 and $47.93 during the past year.