America's Car-Mart (NASDAQ:CRMT) Delivers Strong Q4 Numbers

CRMT Cover Image — America's Car-Mart (NASDAQ:CRMT) Delivers Strong Q4 Numbers

Adam Hejl

Thu, Mar 6, 2025, 5:41 AM 5 min read

Revenue: $325.7 million vs analyst estimates of $282.8 million (8.7% year-on-year growth, 15.2% beat)
EPS (GAAP): $0.37 vs analyst estimates of $0.15 (significant beat)
Adjusted EBITDA: $25.13 million vs analyst estimates of $19.58 million (7.7% margin, 28.3% beat)
Operating Margin: 7.1%, up from 2.2% in the same quarter last year
Free Cash Flow was -$33.87 million, down from $10.24 million in the same quarter last year
Locations: 154 at quarter end, in line with the same quarter last year
Same-Store Sales rose 3.1% year on year (-9.3% in the same quarter last year)
Market Capitalization: $316.6 million

Company Overview

With a strong presence in the Southern and Central US, America’s Car-Mart (NASDAQ:CRMT) sells used cars to budget-conscious consumers.

Vehicle Retailer

Buying a vehicle is a big decision and usually the second-largest purchase behind a home for many people, so retailers that sell new and used cars try to offer selection, convenience, and customer service to shoppers. While there is online competition, especially for research and discovery, the vehicle sales market is still very fragmented and localized given the magnitude of the purchase and the logistical costs associated with moving cars over long distances. At the end of the day, a large swath of the population relies on cars to get from point A to point B, and vehicle sellers are acutely aware of this need.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $1.38 billion in revenue over the past 12 months, America's Car-Mart is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers. On the bright side, it can grow faster because it has more white space to build new stores.

As you can see below, America's Car-Mart’s 13.8% annualized revenue growth over the last five years (we compare to 2019 to normalize for COVID-19 impacts) was solid despite not opening many new stores.

This quarter, America's Car-Mart reported year-on-year revenue growth of 8.7%, and its $325.7 million of revenue exceeded Wall Street’s estimates by 15.2%.

Looking ahead, sell-side analysts expect revenue to decline by 3.4% over the next 12 months, a deceleration versus the last five years. This projection doesn't excite us and implies its products will face some demand challenges.

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Store Performance

Number of Stores

The number of stores a retailer operates is a critical driver of how quickly company-level sales can grow.

America's Car-Mart listed 154 locations in the latest quarter and has kept its store count flat over the last two years while other consumer retail businesses have opted for growth.

When a retailer keeps its store footprint steady, it usually means demand is stable and it’s focusing on operational efficiency to increase profitability.

Same-Store Sales

A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket).

America's Car-Mart’s demand within its existing locations has barely increased over the last two years as its same-store sales were flat. This performance isn’t ideal, and we’d be skeptical if America's Car-Mart starts opening new stores to artificially boost revenue growth.

America's Car-Mart Same-Store Sales Growth

In the latest quarter, America's Car-Mart’s same-store sales rose 3.1% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.

Key Takeaways from America's Car-Mart’s Q4 Results

We liked how America's Car-Mart beat analysts’ EBITDA and EPS expectations this quarter. This was a solid quarter. The stock traded up 3.9% to $39.90 immediately following the results.

America's Car-Mart may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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