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Jul 31, 2023
Car-Mart Q1 2024 Earnings Report
America’s Car-Mart reported strong revenue growth, but net income was negatively impacted by credit results.
Key Takeaways
America's Car-Mart reported a 2.4% increase in unit volumes and a 4.1% rise in average retail sales price, contributing to strong revenue growth. However, net income was negatively impacted by an increase in the provision for loan losses due to post-stimulus normalization of charge-offs and increased contract terms.
Unit volumes increased by 2.4% driven by online credit applications.
Average retail sales price rose by 4.1% to $18,799.
Gross margin improved, driven by expertise in purchasing and disposition business practices.
Net charge-offs as a percentage of average finance receivables were 5.8%.
Forward Guidance
The company expects improvements from the Loan Origination System and Microsoft Dynamics 365 ERP, and anticipates benefits from increased online credit applications and improved customer service.
Positive Outlook
- Anticipates benefits from the Loan Origination System (LOS).
- Expects the LOS to increase the funnel of potential customers and retention of existing customers.
- LOS will enable more selective customer financing and improved deal structures.
- Implementation of Microsoft Dynamics 365 ERP is progressing.
- Expects the ERP to improve back-office accounting, inventory management, and customer service.
Challenges Ahead
- Higher loan losses related to post-stimulus normalization of charge-offs.
- Additional provisioning resulting from increased contract term.
- Higher average interest rate for the portfolio.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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