Ahead of its third-quarter earnings release Monday (Feb. 19), America’s Car-Mart has stopped selling vehicles at two of its Arkansas dealerships.
The Bentonville-based buy here, pay here used car dealer recently changed management for its Discount Auto dealership in Bethel Heights, and started serving those customers through the company’s Rogers dealership, said Car-Mart president and CEO Jeff Williams. “We have stopped selling cars from that [Bethel Heights] location, but we are currently still weighing our options…We could always start it back up if we have market opportunities,” he said.
Initially, the plan was to close the dealership, Williams said. “All associates were absorbed by other locations. We have moved some corporate office jobs to that location, too…We will permanently have several associates working from there.”
Some employees shifted from the Bentonville office, while others moved to Bentonville from there. “I think we ended up moving about three net down there [to Bethel Heights],” Williams said. “Between here [Bentonville] and Bethel Heights we have a lot of room to grow if we need to. Of course we are trying to keep our costs down and limit any additions.”
The other location that has not officially closed but has stopped selling vehicles is in Jacksonville, about five miles from the company’s North Little Rock dealership.
On Jan. 30, the company announced it opened its second dealership in Bowling Green, Ky., and its 12th in Kentucky. On Nov. 20, the company opened its 141st dealership in Centerton. Car-Mart is working to open dealerships by leveraging its high-performing managers, allowing them to operate multiple dealerships. The Centerton and Bowling Green dealerships will be managed by managers overseeing more than one dealership as the company trains staff to become managers.
On Feb. 19, Car-Mart will report financial results for the third quarter of 2018, which ended Jan. 31. The company is expected to report earnings to rise 57.1% to 55 cents per share, from the same period in 2016-2017, according to a consensus of five analysts. Revenue is expected to decline 1.8% to $136.24 million.
Shares of Car-Mart (NASDAQ: CRMT) closed at $44.90, down 20 cents or 0.44% on Tuesday (Feb. 13). In the past 52 weeks, the stock has ranged between $49.40 and $30.20.
USED CAR TRENDS
In the second quarter of 2018, the number of vehicles the company sold declined to 11,932, down 1.9% from the same period in the previous year. Average selling price fell 0.7% to $10,418. In the third quarter of 2017, the number of vehicles Car-Mart sold dropped to 10,866 vehicles, down 1.3% from the same period in the previous year. Average selling price increased 0.3% to $10,629.
In January, the Manheim Used Vehicle Value Index rose 4.9% to 131. “Depreciation accelerated for most vehicles to catch up with the abnormal pricing performance in September, but now that prices are more in line with the general trend prior to the hurricanes, expect the rate to slow down to normal,” according to Manheim. “As we look ahead in 2018, we will likely miss the normal ‘bounce’ in used vehicle prices in March as tax refunds will again be delayed as part of the IRS effort to combat identity fraud. Prices should be on firmer footing by April as retail demand kicks into gear.”
Used car sales declined 2% to a seasonally adjusted annual rate of sales of 39.2 million units in January, from the same month in 2017, according to Cox Automotive. However, the economy is showing strength for used car sales as “positive wage growth combined with the parade of businesses announcing bonuses and pay increase from tax reform is producing fertile ground for strong and growing consumer spending and auto buying in the spring.”
Used vehicle prices are expected to be “relatively flat” in 2018, compared to 2017, according to J.D. Power Valuation Services.