Car-Mart forms task force to respond to COVID-19; stock price hits 52-week low

by Jeff Della Rosa ([email protected]) 914 views 

Bentonville-based America’s Car-Mart has established a task force to respond to the COVID-19 (coronavirus) outbreak as the buy here, pay here used car dealer’s stock price hit a 52-week low.

In a statement on the company’s website, CEO Jeff Williams said the company has developed plans and established a task force to respond to the outbreak, based on guidance from the Centers for Disease Control and Prevention (CDC), the World Health Organization and public health agencies.

“Our biggest priority at America’s Car-Mart is the safety of our associates and customers,” Williams wrote. “We are committed to maintaining a safe and healthy workplace for our associates and helping our customers do the same. We are closely monitoring the ongoing COVID-19 coronavirus outbreak and staying on top of this evolving situation.

“As our local communities start to feel the impact of the coronavirus, I want to personally update you and share the steps we’re taking at Car-Mart to ensure your health and safety. We want you to feel confident when you visit a Car-Mart facility to make your payments or to shop for a vehicle.”

Williams also explained the procedures the company has in place to keep its dealerships and corporate office clean.

“We have ramped up our cleaning efforts,” Williams said. “We have enhanced our cleaning and sanitization efforts in our stores, corporate office and vehicles. We are frequently disinfecting high-touched surfaces such as door handles, countertops, keypads and restroom surfaces, as well as vehicle door handles and steering wheels.” Employees will wear disposable gloves when applying disinfectant sprays and cleaning solutions.

Employees also have been asked to remain home if they have cold or flu-like symptoms or if they have been diagnosed with COVID-19.

“Rest assured, we will continue to monitor this changing circumstance closely,” Williams said. “We will be diligent in taking the necessary actions to help limit the spread of the virus — and ensuring clean, healthy environments in our stores and vehicles. Finally, we will keep you informed and updated along the way.”

Williams also noted customers can make their payments online via automatic bank draft without a fee. One-time payments made online or those made over the phone require a $2.20 fee per transaction. Payments also are accepted at dealerships without a fee.

All Car-Mart dealerships remain open at regular business hours amid the outbreak, and the company has yet to limit store hours or temporarily close any locations. As of Jan. 31, Car-Mart had 145 dealerships in 11 states in smaller cities throughout the south-central United States and has plans to open dealerships in Cabot, Chattanooga, Tenn., Edmond, Okla., Norman, Okla., and acquire three dealerships in Illinois through the acquisition of Taylor Motors.

“We are a small-town character lender, and our customers count on us to be there for them when needs arise as related to their vehicles,” Williams said. “We are a vital part of our communities, and we have an obligation to support our associates, our customers and help our communities. We take this very seriously and are working hard to reduce stress levels for those most affected. For 39 years we have been working with customers who face credit challenges, and we will be there for them now.”

When asked how COVID-19 has impacted the business with regard to sales and customer traffic, Williams said the company is monitoring traffic, and it’s too early to identify how it will affect the business.

“We are hyper-focused on cleaning protocol and social distancing and monitoring our associates to help ensure they are safe and healthy,” Williams added.

On Feb. 19, Car-Mart reported third-quarter earnings for the period that ended Jan. 31 increased 16.5% to $12.68 million, or $1.83 per diluted share. Revenue rose 15.9% to $186.73 million. Through the first three quarters of fiscal 2020, earnings increased 27.3% to $42.05 million, or $6.03 per share. Revenue increased 11.5% to $548.92 million.

The next day, shares of Car-Mart (NASDAQ: CRMT) closed at a record high of $129.70. The stock had closed above $100 since Nov. 22, 2019, when it closed at $101.31.

Since then, the stock price has declined and fell to a 52-week low of $35.18 on Wednesday (March 18). The stock closed Wednesday at $38.50, and that last time the stock closed in the $30 range was Sept. 12, 2017, when it closed at $39.70. The stock was trading Thursday (March 19) at $42.69, up $4.19 or 10.88%.

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