ROGERS, Ark. - America's Car-Mart Inc. (NASDAQ:CRMT) reported better-than-expected revenue for its fiscal second quarter, sending shares up 1.77% in premarket trading.
The used car retailer posted revenue of $347.3 million for the quarter ended October 31, 2024, surpassing analyst estimates of $335.68 million. However, the company reported an adjusted loss per share of $0.24, which was wider than the $0.10 loss per share analysts had forecast.
Total (EPA:TTEF) revenue declined 3.5% YoY, primarily due to a 9.1% decrease in retail units sold to 13,784 vehicles. The company attributed the lower sales volumes partly to weather events in some markets during September. Interest income rose 3.6% to $61.5 million.
"As we navigated industry and economic pressures, we made strategic decisions to ensure we exited stronger and better positioned to profitably grow our market share during the second half of the fiscal year," said President and CEO Doug Campbell.
Gross profit margin improved to 39.4%, including a 290 basis point benefit from an accounting change related to service contract revenue recognition. Excluding this impact, adjusted gross margin was 36.5%, up 200 basis points YoY.
The company reduced its allowance for credit losses to 24.72% of finance receivables, down from 25.0% in the previous quarter, citing favorable performance from loans originated under its enhanced underwriting system.
America's Car-Mart closed two underperforming dealerships during the quarter, ending the period with 154 locations. The average retail sales price decreased sequentially for the second straight quarter to $17,251.
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