America’s Car-Mart, Inc. (NASDAQ:CRMT) stock fell 6.43% (As on June 19, 4:04:17 AM UTC-4, Source: Google Finance) after the company posted declines in revenue and earnings in the fourth quarter of fiscal 2024 as vehicle sales declined and sales prices rose. Sales for the quarter were 15,251 units vs. 17,655 units, down 13.6%. It is important to note that we saw a rebound in volumes as the third quarter was down 19.6% in unit volumes sold. We continue to iterate on our new origination platform and our marketing plan to efficiently produce volumes at an appropriate risk. Gross profit margin as a percentage of sales was 35.5%, or $7,132 per unit, compared to 33.5% or $6,354 per unit. This 12.2% increase resulted from continued execution on pricing discipline, improvements in the vehicle repair expenses, and optimization of transportation costs. The allowance for credit loss as a percentage of finance receivables, net of deferred revenue and pending accident protection plan claims, decreased from 25.74% at January 31, 2024, to 25.32% at April 30, 2024, providing a 42 bps benefit to the provision for credit losses. The adjustment was primarily driven by the improved experience of contracts underwritten in the new system. Average down payments improved to 6.5%, 40 bps over the prior year fourth quarter and 140 bps sequentially. The average retail sales price increased by $1,123 or 6.2%, with a 0.5 month increase in the term. Stronger deal structures improved projected cash-on-cash returns to 69.5% for the first full quarter of LOS originations.

CRMT in the fourth quarter of FY 24 has reported the adjusted earnings per share of 6 cents, missing the analysts’ estimates for the adjusted earnings per share of 89 cents. The company had reported the adjusted revenue decline of 5.8 percent to $364.67 million in the fourth quarter of FY 24, beating the analysts’ estimates for revenue of $361.47 million. This was primarily driven by the decrease in retail units sold. A portion of the decline in revenue was offset by an increased average retail sales price and increased interest income.

Subsequent to the fiscal year end the Company announced and closed on the acquisition of Texas Auto Center (TAC), operating two dealerships in Austin and San Marcos, Texas. TAC is a nearly 30-year-old company owned by Bob and Erika Blankenship. This acquisition is expected to deliver exceptional outcomes for customers, associates, and shareholders. TAC’s high-performance culture, customer focus, and values align with Car-Mart.