Why America's Car-Mart Shares Are Sliding Today

America’s Car-Mart Inc CRMT reported first-quarter FY24 sales growth of 8.6% year-on-year to $368 million, beating the analyst consensus of $364.84 million.

Same-store revenue growth was 8.2% versus 21.5% reported a year ago. Customer count increased 8.1% to 104,734 active customers. Customers served per dealership was 680, compared to 629 last year.

Total gross profit per retail unit sold was $6,768 compared to $6,524 last year.

Provision for credit losses as a percentage of sales was 30.9% compared to 25.9%.

Selling, general and administrative expenses increased 7.5% to $46.5 million.

EPS of $0.63 missed the analyst consensus of $0.98.

Inventory fell 19% Y/Y to $117.2 million. The company held $92.2 million in cash and equivalents as of July 31, 2023.

"In the first quarter, improvements in many areas of the business - unit sales, gross margin, repair costs, diminishing wholesale losses, online credit application activity, working capital management and closing underperforming stores were overshadowed by the increase in the provision for loan losses during the period. The major drivers behind higher loan losses related to post-stimulus normalization of charge-offs, additional provisioning resulting from increased contract term, and a higher average interest rate for the portfolio," commented CEO Jeff Williams.

Price Action: CRMT shares are trading lower by 11.96% at $99.95 on the last check Tuesday.