America's Car-Mart Inc. (NASDAQ: CRMT) is scheduled to release its financial results for fiscal-third quarter 2010 ended January 31, 2010 before the market open on Tuesday, February 25, 2010. Analysts, on average, expect the company to report earnings of 50 cents per share on revenue of $82.29 million. For the fourth quarter of the previous fiscal, the company reported earnings of 31 cents per share on revenue of $73.45 million.
America's Car-Mart, Inc., is the largest publicly held automotive retailer in the United States focused exclusively on the "Buy Here/Pay Here" segment of the used car market. It operates 96 automotive dealerships in eight states. Operating since 1981, Car-Mart has grown its revenues between 3% and 21% per year over the last ten full fiscal years (average 15%). Over the last five full fiscal years, the company's gross margins as a percentage of sales have ranged between approximately 42% and 46%.
The used vehicle market continued to provide stability and profit opportunities, even as the economy as a whole and the U.S. automotive industry in specific struggled amid unprecedented challenges in 2009. The economic downturn has been good for Car-Mart's discounted price policy, a as recession has changed spending habits and, consequently, allowed the company to take market share.
The company has a strong and unique business model which helps people with limited credit histories buy used cars. The company sells cheap cars, and gives loans, to customers who cannot avail traditional sources of credit, making the business largely immune to an economic downturn.
In November, the Bentonville, Arkansas-based company reported that its fiscal secpnd quarter net income increased to $6.3 million, or $0.53 per share, from $3.87 million, or $0.33 per share, in the prior-year quarter. Revenue grew 14.7% to $82.56 million from $71.98 million in the same quarter last year. Analysts on average expected the company to report earnings of $0.42 per share on revenue of $80.56 million. For the quarter, customer base improved 3.3% to over 45,500.
The automotive retailer is well-positioned to gain market share as the economy improves. "We anticipate the demand for our vehicles and service to continue to increase into the future. Continuing credit constrictions for vehicle consumers and most of our competitors will enhance Car-Mart's position as the leader in our industry." William Henderson, president and chief executive officer said in a statement in November.
The company's stock currently trades at a forward P/E (fye 30-Apr-11) of 10.88 and PEG (5 yr expected) of 0.81. In terms of stock performance, Car-Mart shares have gained nearly 138% over the past year.
Disclosure: Author doesn't own any of the stocks discussed here.
