Why America's Car-Mart Shares Are Sliding Today

America’s Car-Mart Inc CRMT shares are trading lower after the company reported worse-than expected fourth-quarter EPS and a sales decline.

The company reported a fourth-quarter FY24 sales decline of 5.8% year-on-year to $364.67 million, beating the analyst consensus estimate of $361.47 million.

The decrease in revenue was primarily driven by the decrease in retail units sold. 

Same-store revenue declined 5.3% versus a growth of 12.2% reported a year ago. Customer count slipped 0.1%.

Average total collected per active customer per month amounted to $554 compared to $534 last year.

Total gross profit per retail unit sold was $7,132 compared to $6,354 last year and the profit margin expanded by 200 basis points to 35.5%.

The allowance for credit loss as a percentage of finance receivables, net of deferred revenue and pending accident protection plan claims, decreased from 25.74% at January 31, 2024, to 25.32% at April 30, 2024.

Selling, general and administrative expenses decreased 2.8% to $44.5 million. 

EPS of $0.06 missed the analyst consensus estimate of $0.89.

Inventory fell 1.7% to $107.5 million. The company held $94.4 million in cash and equivalents as of April 30, 2024.

“Our sales results improved sequentially but fell short of our internal expectations for the quarter…We are also thrilled about our most recent acquisition and welcome our new associates from Texas Auto Center to the Car-Mart family. This transaction closed June 3, 2024, and is the largest acquisition to date for our company. Despite these positives, the persistent inflationary environment driven by macro trends disproportionately impacted our customer base,” said President and CEO Doug Campbell.

Price Action: CRMT shares are trading lower by 7.53% at $57.13 at last check Tuesday.