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Jan 31, 2025
Car-Mart Q3 2025 Earnings Report
America’s Car-Mart reported revenue growth and improved gross margins in Q3 FY25, with a return to profitability.
Key Takeaways
America’s Car-Mart achieved an 8.7% revenue increase in Q3 FY25, reaching $325.7 million, driven by higher sales volumes. Net income rebounded to $3.16 million, a turnaround from the prior year's loss. The company improved its gross margin by 150 basis points to 35.7%, while diluted EPS came in at $0.37 compared to a loss of $1.34 in Q3 FY24. A $200 million term securitization transaction and an expanded $350 million asset-based lending facility bolstered its financial position.
Revenue increased 8.7% to $325.7 million, driven by a 13.2% rise in sales volume.
Gross margin improved by 150 basis points to 35.7%.
Net income rebounded to $3.16 million from an $8.54 million loss in Q3 FY24.
Completed a $200 million securitization transaction and expanded a $350 million credit facility.
Forward Guidance
America’s Car-Mart expects continued revenue growth and margin improvements, supported by its expanded credit facilities and enhanced underwriting processes. However, macroeconomic uncertainties and credit risks remain key challenges.
Positive Outlook
- Expansion of $350 million asset-based lending facility enhances liquidity.
- Improved underwriting performance reduces credit losses.
- Higher inventory levels positioned for seasonal demand increases.
- Operational efficiency improvements contributing to margin expansion.
- Continued investments in technology and leadership strengthening business model.
Challenges Ahead
- Macroeconomic uncertainties could impact customer affordability.
- Increased competition in the used car financing market.
- Potential fluctuations in vehicle procurement costs affecting margins.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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