Used-car retailer America’s Car-Mart (NASDAQ: CRMT) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 1.2% year on year to $350.2 million. Its GAAP loss of $2.71 per share was significantly below analysts’ consensus estimates.
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America's Car-Mart (CRMT) Q3 CY2025 Highlights:
- "We are proactively repositioning America’s Car-Mart by investing in our infrastructure, optimizing our platform, and improving our capital structure. These strategic actions are designed to deliver sustainable growth, enhance profitability..."
- Revenue: $350.2 million vs analyst estimates of $331 million (1.2% year-on-year growth, 5.8% beat)
- EPS (GAAP): -$2.71 vs analyst estimates of -$0.58 (significant miss)
- Adjusted EBITDA: -$3.02 million vs analyst estimates of $13.48 million (-0.9% margin, significant miss)
- Operating Margin: -1.5%, down from 7.3% in the same quarter last year
- Free Cash Flow was $8.27 million, up from -$23.59 million in the same quarter last year
- Locations: 154 at quarter end, in line with the same quarter last year
- Same-Store Sales were flat year on year (-8.4% in the same quarter last year)
- Market Capitalization: $193.5 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.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
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.
As you can see below, America's Car-Mart grew its sales at a sluggish 1.6% compounded annual growth rate over the last three years (we compare to 2019 to normalize for COVID-19 impacts) as it didn’t open many new stores.
This quarter, America's Car-Mart reported modest year-on-year revenue growth of 1.2% but beat Wall Street’s estimates by 5.8%.
Looking ahead, sell-side analysts expect revenue to decline by 1.9% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and implies its products will face some demand challenges.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue 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 gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year.
America's Car-Mart’s demand has been shrinking over the last two years as its same-store sales have averaged 4.6% annual declines. This performance isn’t ideal, and we’d be concerned if America's Car-Mart starts opening new stores to artificially boost revenue growth.
In the latest quarter, America's Car-Mart’s year on year same-store sales were flat. This performance was a well-appreciated turnaround from its historical levels, showing the business is improving.
Key Takeaways from America's Car-Mart’s Q3 Results
We were impressed by how significantly America's Car-Mart blew past analysts’ revenue expectations this quarter. On the other hand, its EBITDA missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 8.9% to $21.25 immediately following the results.
America's Car-Mart’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. 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 for active Edge members.
