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Apr 30, 2024
Car-Mart Q4 2024 Earnings Report
Reported financial results for the fourth quarter and full year ended April 30, 2024.
Key Takeaways
America's Car-Mart reported a decrease in revenue primarily due to a drop in retail units sold, though this was partially offset by increased average retail sales price and interest income. Gross profit margin improved, and SG&A expenses were reduced. The company also completed the acquisition of Texas Auto Center.
Sales for the quarter were 15,251 units, down 13.6% compared to the prior year.
Gross profit margin increased to 35.5%, or $7,132 per unit, compared to 33.5% or $6,354 per unit.
Net charge-offs as a percentage of average finance receivables were 7.3% compared to 6.3%.
SG&A expense decreased to $44.5 million compared to $45.8 million.
Car-Mart
Car-Mart
Forward Guidance
The company is confident in its multi-pronged approach to lower overall vehicle costs and improve affordability for consumers in the upcoming year. The acquisition of Texas Auto Center is expected to deliver exceptional outcomes, and the company will focus on rebalancing its portfolio by restricting investments to underperforming locations.
Positive Outlook
- Disciplined management on SG&A.
- Total cash collected from customers improved.
- Improved down payments.
- Stronger gross margins.
- LOS underwriting capability continues to deliver superior results.
Challenges Ahead
- Sales results fell short of internal expectations.
- Persistent inflationary environment disproportionately impacted customer base.
- Decrease in retail units sold.
- Increased frequency and severity of losses in net charge-offs.
- Frequency of loss on loans originated in fiscal years 2021 through 2023 were higher than prior projections