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Apr 30, 2023
Car-Mart Q4 2023 Earnings Report
America’s Car-Mart reported Q4 2023 earnings, showing increased unit volumes and gross profits while facing challenges from market conditions and customer payment behavior.
Key Takeaways
America's Car-Mart reported a 7.5% increase in unit volumes and a rise in average retail sales price by 3.5% to $18,133. The company's active customer base grew by 7.6% to 102,305. Gross profits increased to $112.2 million, but the company faced challenges including higher interest expense and increased provision for credit losses.
Unit volumes increased by 7.5% driven by market share gains from digital investments.
Active customer base grew by 7.6% to 102,305, with an average of 656 customers per dealership.
Gross profits totaled $112.2 million, up from $107.5 million in the prior year's fourth quarter.
Net charge-offs as a percent of average finance receivables were 6.3%, compared to 5.1% in the prior year quarter.
Forward Guidance
The company anticipates improvements in affordability for customers and expects to attract higher credit rated customers as automobile credit terms and conditions tighten. They expect material gross profit margin improvement from structural improvements to procurement, inventory, and wholesale processes. Capital expenditures are expected to be approximately $12 million for fiscal year 2024 as the company completes facility updates and general fixed asset requirements.
Positive Outlook
- Affordability to improve gradually with strong wage increases for customers.
- Expect to attract higher credit rated customers.
- Anticipate material gross profit margin improvement.
- Completing facility updates.
- Completing general fixed asset requirements.
Challenges Ahead
- Ongoing disruption in the used car market challenges purchasing quality vehicles at affordable prices.
- Customers face higher living costs due to persistent inflation.
- Customers face higher interest rates.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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