America’s Car-Mart, Inc. (CRMT) shares took a hit on Wednesday after the company reported a loss for the first quarter. The company posted a 15-cent loss per share, a stark contrast to the 63-cent earnings per share reported in the same period last year. This missed the profit consensus of 66 cents. While quarterly revenues of $347.76 million beat the street view of $338.78 million, they marked a 5.2% decline year-over-year, largely due to a decrease in retail units sold. The company sold 14,391 units this quarter, down 9.6% from the 15,912 units sold in the same period last year. This represents the second consecutive quarter of improvement in unit sales on a year-on-year basis. Despite the challenging economic environment, President and CEO Doug Campbell expressed optimism about the rebound in sales volume. He highlighted the contribution of the company’s new loan origination system (LOS) in driving higher down payments and improved deal structures. The company’s same-store revenue fell 8.6% compared to the 8.2% growth seen in the year-ago period. However, America’s Car-Mart reported a positive 7.2% increase in interest income, adding $4.1 million to its bottom line. Total collections also grew by 4.3% to $172.9 million. On the downside, the company faced an increase in interest expense by $4.0 million (28.3%). Net charge-offs, as a percentage of average finance receivables, increased to 6.4% from 5.8%, while the allowance for credit loss was favorably adjusted to 25.0%, down from 25.32%. Despite the challenges, America’s Car-Mart managed to improve its gross profit margin, reaching 35%, or $6,996 per unit, representing a 30 basis point improvement ($228 per unit). The company ended the quarter with $98.62 million in cash and equivalents, and its inventory stood at $114.548 million. The average total collected per active customer per month was $562. The market reacted negatively to the earnings report, with CRMT shares trading down by 10.3% to $53.57 at the close of trading on Wednesday.
