Car-Mart(US:CRMT)2025-12-04 19:00Revenue and Sales Performance - Total revenue for Q2 FY'26 was $350.2 million, an increase of 0.8% year-over-year, with adjusted revenue growth of 4.8% excluding a one-time benefit from the prior year[17]. - Sales volumes decreased by 1.1% to 13,637 units compared to 13,784 units in the prior year, attributed to capital constraints[18]. - Total revenues for the six months ended October 31, 2025, were $691,282 thousand, a decrease of 0.5% compared to $695,032 thousand for the same period in 2024[53]. - Adjusted total revenue for the three months ended October 31, 2025, was $350,192 thousand, reflecting a 4.8% increase from $334,088 thousand for the same period in 2024[64]. - Retail units sold decreased by 1.1% to 13,637 in Q3 2025 compared to 13,784 in Q3 2024[37]. - Same store revenue growth showed a decline of 0.2% in Q3 2025 compared to a decline of 8.4% in Q3 2024[37]. Financial Position and Cash Flow - Total cash, including restricted cash, increased to $251.0 million from $124.5 million at the start of the fiscal year[7]. - Cash and cash equivalents increased significantly to $122,362 thousand as of October 31, 2025, compared to $9,808 thousand as of April 30, 2025[55]. - Total assets increased to $1,717,920 thousand as of October 31, 2025, up from $1,606,474 thousand as of April 30, 2025[56]. Expenses and Cost Management - SG&A expenses totaled $57.2 million, with a target to reduce SG&A as a percentage of sales to approximately 16.5%[20]. - Adjusted selling, general and administrative expenses as a percentage of sales were 18.8% for the three months ended October 31, 2025, compared to 16.6% for the same period in 2024[65]. - The Company closed five underperforming stores, projected to save $1 million in fiscal 2026 and $2 million annually[21]. Credit and Charge-offs - The allowance for credit losses as a percentage of finance receivables was 24.19%, compared to 24.72% on October 31, 2024[26]. - Net charge-offs totaled $106.3 million, with net charge-offs as a percentage of average finance receivables increasing to 7.0% from 6.6% in the prior year[23]. - Provision for credit losses increased by 19.6% to $119,074,000 in Q3 2025 from $99,522,000 in Q3 2024[51]. - The provision for credit losses increased by 13.9% to $222,109 thousand for the six months ended October 31, 2025, compared to $194,945 thousand for the same period in 2024[53]. Profitability and Earnings - Net income loss for Q3 2025 was $22,473,000, a significant decline from a net income of $5,099,000 in Q3 2024[51]. - Net loss attributable to common shareholders for the six months ended October 31, 2025, was $(28,228) thousand, compared to a net income of $4,115 thousand for the same period in 2024[53]. - Management expects actions taken during the quarter to drive meaningful improvement in operating leverage and position the Company for a return to positive GAAP earnings[35]. Customer Metrics - Active customer count rose by 0.5% to 103,819 in Q2 2025 compared to 103,336 in Q2 2024[40]. - Average total collected per active customer per month increased by 3.6% to $580 in Q3 2025 from $560 in Q3 2024[40]. Underwriting and Originations - The new LOS V2 underwriting platform is enhancing the quality of new originations, with contracts originated under this system tracking better than those from the legacy system[9].