America's Car-Mart shares soared more than 20 percent Friday and hit an all-time high after posting a first-quarter earnings report that far surpassed profit and revenue estimates by analysts.
Jeff Williams, the used-car dealer's new president and chief executive officer, said he's happy with the company's progress but there's still room for improvement. He credited the strong quarter to the company's focus on improving its internal operations and its continued focus on recruiting and training managers, noting hard work translated into the solid results.
The Bentonville buy-here, pay-here dealer reported profits of $10.9 million, or $1.53 per share, for the company's first quarter in fiscal 2019, which ended July 31, compared with $7 million, or 90 cents per share, for the year-ago period. A consensus of four analysts predicted $1.15 per share for the quarter. This is the third quarter in a row that Car-Mart has beaten analysts' average earnings estimates
Revenue for the first quarter was $164 million compared with $146 million for the same quarter last year. The consensus of three analysts had pegged revenue at $152.4 million.
Car-Mart released earnings after markets closed Thursday and held a conference call with analysts Friday morning. Shares traded as high as $81.95 before closing at $81.55, up $14.55 or nearly 22 percent in trading on the Nasdaq. Shares have traded as low as $33.05 and as high as $81.95 over the past year.
Car-Mart opened two new dealerships during the quarter, one in Pryor, Okla., and another in Fayetteville. Plans are for three new operations to open their doors next quarter in Bixby, Okla., Montgomery, Ala., and Conway.
In response to analysts' questions, Williams said pressure from competitors seemed to lessen during the quarter. He added that Car-Mart's core customers seem to be benefiting from recent tax cuts, better employment opportunities and slightly higher wages.
Vickie Judy, Car-Mart's new chief financial officer, said same-store sales, or sales at stores open at least a year, were up 12.1 percent in the first quarter, compared with a 2.1 percent growth for the year-ago quarter. Overall revenue was up 5.7 percent for the quarter compared with last year.
The average sale price per vehicle for the period was $11,015, up 6.1 percent from $10,386 a year ago. For the period, the company sold 12,533 vehicles, up nearly 6 percent from 11,837 a year ago. On average, Car-Mart lots sold 29.8 vehicles per month for the quarter, up 5.7 percent from 28.2 vehicles last year.
Judy said the increased value of vehicles sold was because of higher sales of trucks and sport utility vehicles, since they command a higher price and are in demand with customers.
Net charge-offs stood at 6.4 percent, unchanged from the same period 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.
Car-Mart runs 141 dealerships in Alabama, Arkansas, Georgia, Indiana, Iowa, Kentucky, Mississippi, Missouri, Oklahoma, Tennessee and Texas.
Business on 08/18/2018