TLDR
- CRMT Q4 EPS Jumps to $1.26 as Margins Expand Despite Weak Revenue Growth
- Car-Mart Boosts Profits With Better Pricing and Credit Quality, Stock Dips 1.66%
- Vehicle Sales Decline for Year, But Strong Margins Lift CRMT Earnings to $2.33 EPS
- Improved Credit Standards, Securitization Deal Strengthen Car-Mart’s Liquidity Position
- Operational Efficiency and Lower Net Debt Help Offset Soft Same-Store Sales at CRMT
America’s Car-Mart Inc. (CRMT) shares closed at $49.17 on June 13, down 1.66% following its Q4 earnings release. Despite significant earnings per share growth, revenue growth remained limited during the quarter. The stock showed intraday volatility, peaking at $50.35 before retreating in afternoon trading.
America’s Car-Mart Inc. (CRMT)
Q4 EPS Strengthens as Margins Expand
CRMT posted diluted earnings per share of $1.26 in Q4, a sharp increase from $0.06 in the same quarter last year. This improvement came as the company reported higher interest income and an expanded gross profit margin of 36.4%. The average vehicle sales price fell slightly to $17,240, helping improve affordability and unit sales.
Total revenue grew by just 1.5% to $370.2 million, driven by a 2.6% increase in retail units sold. Meanwhile, interest income rose by 4.2% to support top-line gains. Despite the moderate revenue expansion, Car-Mart optimized its pricing and procurement strategies to boost profit margins.
Gross profit per unit increased by 1.1% to $7,209, aided by stronger operational efficiency. Charge-offs as a percentage of average finance receivables improved to 6.9%. However, delinquencies above 30 days rose to 3.4%, showing a slight uptick in credit risk.
Annual Results Mixed Amid Lower Sales
For the full year ending April 30, 2025, total revenue dropped slightly by 0.2% to $1.4 billion as unit sales declined. The company sold 57,022 vehicles, down 1.7% from the prior year, despite improving collections and finance performance. Interest income rose 5% while collections increased 3.7% to $714.1 million.
Full-year earnings per share reached $2.33, compared to a loss of $4.92 the year before. Gross margin improved to 36.7%, reflecting tighter vehicle acquisition and disposal management. Same-store revenue, however, fell 5%, highlighting challenges in demand across some locations.
The average gross profit per vehicle rose by 6.2% to $7,368. Average down payments decreased slightly, while loan terms extended modestly. Active customer count rose by 2.4%, bringing the total to 104,682 customers.
Credit Quality Improves as Liquidity Strengthens
Allowance for credit losses improved to 23.25%, reflecting higher-quality contracts under new underwriting standards and better portfolio performance. Net charge-offs also declined year-over-year, supported by improved severity and frequency metrics. Meanwhile, collections per customer increased slightly to $612 monthly.
Leverage improved with debt-to-finance receivables declining to 51.5% and debt net of cash falling to 43.2%. The company also reduced its total net debt by $7.8 million. Liquidity received a further boost from a $216 million securitization closed in May.
The company continues to enhance its capital structure by diversifying financing sources, including exploring long-term debt and warehouse credit options. Operational investments in technology and talent raised SG&A expenses to $48.3 million. However, CRMT remains focused on expanding its model and improving customer access to vehicle financing.
