Auto-lot chain’s 4Q net at $14M
Car-Mart under revenue forecast
America’s Car-Mart saw strong profits in its fourth quarter but its revenue figures fell short of analysts’ prediction and company shares fell dramatically Wednesday before closing down a little more than $10 a share.
The Bentonville buyhere, pay-here used-car dealer reported net income of $14.6 million or $2.07 per share for the quarter that ended April 30, the end of its fiscal year, compared with $10.2 million or $1.43 per share for the same period in fiscal 2018.
A consensus of five analysts predicted profits of $1.82 per share, according to Yahoo Finance. This is the fifth-consecutive quarter the company has beaten analyst’s predictions on earnings.
Revenue for the quarter was $177 million, up from $169 million for the year ago period but below analysts’ expectations. Three analysts reported an average revenue estimate of $187.04 million for the quarter. Revenue at lots open at least a year was up 2.9%.
The news came after markets closed Tuesday and the company held a conference call with analysts Wednesday morning.
For the year, Car-Mart
booked net income of $47.6 million, or $6.73 per share, up 37% when compared with $36.5 million or $4.90 per share for fiscal 2018. Revenue for 2019 was $669 million, up 9.3% compared with $612 million for 2018. Revenue at stores open at least a year was up 8.4%.
Shares ended trading Wednesday at $91.34, down $10.55 or a little more than 10% on the Nasdaq. The share price fell as much at 15% during the day. Car-Mart shares have traded as low as $53.73 and as high as $104.05 over the past year.
Jeff Williams, the used-car dealer’s president and chief executive officer, said during the conference call that over the past few years the company has been focused inward, developing its talent with a focus to establishing highquality lot managers. Now, he said, the focus is shifting outward to improve the company’s relationship with its
customers and making their experience more positive.
The company plans to open two more Arkansas dealerships, one in Conway and one in Bryant and has plans to open more dealerships in the coming year, Williams said. Car-Mart operates 144 dealerships in Alabama, Arkansas, Georgia, Indiana,
Iowa, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas.
Vickie Judy, Car-Mart’s chief financial officer, said the company repurchased more than 31,470 shares in the quarter and has repurchased 6.2 million shares since early 2010. She said the company will continue to repurchase shares when the opportunity is right.
In the fourth quarter, the company sold 13,094 vehicles, up slightly over 13,082 in the same quarter a year ago. Car-Mart lots, on average, sold 30.3 vehicles per lot per month, down 2.6% from 31.1 for the same period last year. The average sale price per vehicle for the period was $11,305, up $383 or 3.5% from the same period a year ago.
Net charge-offs were at 6.4% for the quarter, down from 7.5% from the fourth quarter last year. Charge-offs are an indication of debt that is unlikely to be collected. Car-Mart’s customers often do not have access to traditional vehicle financing because of poor credit or no credit history. Accounts over 30 days past due dropped to 2.9% from 3.5% for the fourth quarter of 2018.