America’s Car-Mart, Inc. (NASDAQ:CRMT) reported a loss per share of -$0.15, missing the estimated EPS of $0.57 significantly.
Despite a challenging quarter, CRMT saw a slight increase in revenue, totaling $347.76 million, exceeding the Zacks Consensus Estimate by 0.20%.
The company’s financial resilience is highlighted by a remarkably high current ratio of 4771.84, indicating strong liquidity.
America’s Car-Mart, Inc. (NASDAQ:CRMT), a prominent player in the automotive retail industry, recently disclosed its financial results for the first quarter of fiscal year 2025. The company, headquartered in Rogers, Arkansas, specializes in selling used cars and providing financing for its customers. It operates in a competitive market, facing challenges from both traditional car dealerships and newer online platforms that offer vehicle sales and financing options. Despite these challenges, CRMT has carved out a niche by focusing on customers who may not qualify for traditional financing, offering them a path to vehicle ownership.
In the reported quarter, CRMT revealed an earnings per share (EPS) of -$0.15, missing the estimated EPS of $0.57 by a significant margin. This performance marks a notable downturn from the previous year’s earnings of $0.63 per share, highlighting a challenging period for the company. The reported loss represents an earnings surprise of -126.32%, indicating a substantial deviation from what analysts had anticipated. This unexpected loss contrasts sharply with the company’s performance in the previous quarter, where it met expectations with earnings of $0.06 per share, suggesting a recent shift in the company’s financial health.
Despite the earnings miss, CRMT reported a slight increase in revenue, totaling $347.76 million for the quarter. This figure exceeded the Zacks Consensus Estimate by 0.20%, albeit falling short of the previous year’s revenues of $368.03 million. The revenue growth, despite a decrease from the previous year, indicates that the company is still managing to generate sales in a challenging market. This mixed financial picture is further complicated by the company’s struggle to surpass consensus EPS estimates over the last four quarters, underscoring ongoing operational and strategic challenges.
The financial details reveal a nuanced picture of America’s Car-Mart’s current situation. While revenue saw a modest increase, profitability took a hit, with the company experiencing a loss per share of -$0.15. This loss is a significant shift from the diluted earnings per share of $0.63 reported in the same quarter of the previous year. The company also faced an increase in net charge-offs as a percentage of average finance receivables, rising to 6.4% from 5.8%, and a surge in interest expenses by 28.3%, an increase of $4.0 million. However, there were positive developments, such as a rise in interest income by 7.2% and an improvement in total collections by 4.3%.
The financial metrics, including a price-to-earnings (P/E) ratio of -8.81 and a price-to-sales (P/S) ratio of 0.23, reflect the challenges CRMT faces in returning to profitability and generating positive cash flows. The negative earnings yield of -11.35% further highlights the company’s current unprofitability. However, a remarkably high current ratio of 4771.84 suggests that America’s Car-Mart has a strong liquidity position, with ample assets to cover its short-term liabilities. This financial resilience, combined with strategic initiatives like the new loan origination system (LOS) mentioned by CEO Doug Campbell, could play a crucial role in the company’s efforts to navigate the economic challenges facing its customer base and rebound in sales volume.