America’s Car-Mart (NASDAQ:CRMT) reported a wider-than-expected loss for its fiscal second quarter on Thursday, but shares still gained 2.06% in pre-market trading as investors emphasized the company’s ongoing capital restructuring efforts and improvements in its credit portfolio.
The used car retailer posted an adjusted loss of $0.79 per share, sharply missing analyst expectations for a $0.29 profit. Revenue reached $350.2 million — slightly below the $353.22 million consensus — but still up 0.8% from a year earlier. Excluding a one-time service contract accounting benefit that boosted last year’s results, revenue would have grown 4.8%.
A key milestone for the quarter was the company’s refinancing progress. America’s Car-Mart closed a $300 million term loan, enabling it to pay down its revolving credit facility and eliminating restrictive covenants that had previously limited operational flexibility. Total cash, including restricted cash, rose to $251 million from $124.5 million at the start of the fiscal year.
“Our second quarter financial results reflect the continued progress we are making to transform our business for the future, even as we navigate a fluid operating backdrop,” said President and CEO Doug Campbell. “We are proactively repositioning America’s Car-Mart by investing in our infrastructure, optimizing our platform, and improving our capital structure.”
Credit performance was mixed. Accounts more than 30 days past due improved by 36 basis points year-over-year, but net charge-offs as a percentage of average finance receivables increased to 7.0%, up from 6.6% last year. The company noted that contracts issued under its enhanced loan origination system are outperforming legacy loans.
Collections improved 4.6% to $181.7 million, growing faster than the 2.8% increase in finance receivables. Interest income rose 3.9% to $63.9 million, while interest expense dropped 13.1% thanks to enhancements in the securitization platform and a more favorable rate environment.
After the quarter closed, America’s Car-Mart shuttered five underperforming stores — a move expected to yield roughly $2 million in annual savings. Management said it remains focused on optimizing its cost base and improving credit quality through disciplined underwriting, with the goal of returning to positive GAAP profitability.