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Jul 31, 2021
Car-Mart Q1 2022 Earnings Report
America's Car-Mart reported diluted earnings per share of $3.57 on record revenues of $280 million.
Key Takeaways
America's Car-Mart reported a strong first quarter with record revenues driven by increases in average retail sales price and units sold. The company is making foundational investments in its business model and experiencing increased capacity to serve more customers. The company ended the quarter with over 91,100 active customers, an increase of over 3% since the beginning of the fiscal year.
Revenue increased due to a 20.4% increase in the average retail sales price and a 25.0% increase in units sold.
Unit sales volume productivity increased 22.6% from the first quarter of 2021.
Net charge-offs for the quarter, as a percentage of average finance receivables, were 4.3% compared to 4.8% in the prior year quarter.
Selling, general and administrative expenses equaled 15.7% of sales compared to 17.7% in the prior year quarter.
Forward Guidance
The company expects to continue to improve, grow, and leverage its strengths through investments in Recruiting, Training and Retention, Inventory Procurement/Management, Customer Experience and Digital/Information Technology. The company plans to increase customer count at existing locations and open new dealerships, while also looking for acquisition opportunities.
Positive Outlook
- Significant opportunities for growth by increasing customer count at existing locations.
- Continued opening of new dealerships and looking for acquisition opportunities.
- Infrastructure investments focused on the customer experience journey.
- Transitioning from a collections-focused company to a sales company that is very good at collections.
- Balance sheet allows the company to take advantage of challenging market conditions.
Challenges Ahead
- Increases in the average retail sales price have necessitated longer terms resulting in a reduction in collections as a percent of average finance receivables.
- The increase in the average retail sales price put pressure on the overall gross profit percentage.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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