Analysts: Car-Mart to see mixed results in Q4, fiscal 2025
by June 9, 2025 12:38 pm 390 views
Rogers-based America’s Car-Mart Inc. is expected to post an increase in earnings but a decrease in revenue for the fourth quarter of fiscal 2025 and the full year, analysts said.
Before the markets open Thursday (June 12), the buy here, pay here used car dealer is expected to report earnings to increase to 86 cents per share in the quarter that ended April 30 from 6 cents per share in the same period last year, based on a consensus of four analysts. Revenue is projected to fall by 5.81% to $343.5 million from $364.67 million.
For fiscal year 2025, earnings are projected to rise to $1.80 per share from a loss of $4.92 per share in the previous year. Revenue is expected to decrease by 0.94% to $1.38 billion from $1.39 billion.
In a fourth-quarter earnings preview, equity analysts John Hecht and Matthew Hurwit, and equity associates Alexander Villalobos, Ibrahim Kargbo, Yuna Sohn, and Jonathan Weitz, all of Jefferies LLC, expect Car-Mart’s margins to improve, softer vehicle sales as credit and selling, general and administrative expenses become stable.
Gross margin has been improving toward the long-term goal of 37% to 38%. Analysts expect it to rise gradually, boosted by the potential impact of tariffs and an increase in car values.
Fourth-quarter vehicle sales are projected to rise by 1% to about 15,400 vehicles. Analysts expect the integration of the new loan origination system across the company “is coming to fruition through improved origination volume and credit quality.”
According to analysts, consumer demand for Car-Mart’s “service remains strong,” and the impact of tariffs could boost demand and gross margin. “However, (Car-Mart) could experience lower profitability from the warranty business, which buys parts and repairs vehicles. Consumers’ affordability is an additional concern that (Car-Mart) plans on addressing through term extensions and maintaining excess inventory prior to the tariffs taking effect.”
With underwriting tightening in the past quarters, credit has been “trending constructively,” analysts said. They projected a credit loss provision of $101 million in the fourth quarter, up slightly from the third quarter.
Shares of Car-Mart (NASDAQ: CRMT) were trading Monday (June 9) at $55.65, up $1.12 or 2.05%. In the past 52 weeks, the stock has ranged between $36.40 and $72.26.