Why Used Car Dealership Company America's Car-Mart Shares Are Diving Today
Portfolio Pulse from Nabaparna Bhattacharya
America's Car-Mart, Inc. (NASDAQ:CRMT) stock plummeted after reporting Q2 FY24 results with sales of $361.6 million, missing estimates by a narrow margin. Despite a 2.8% YOY sales growth, driven by higher interest income and retail prices, the company saw a 4.6% decline in retail unit sales and a significant EPS loss of $(4.30), far below the expected $0.79. The allowance for credit loss increased, leading to a $28 million charge and a substantial impact on earnings. The CEO attributed the credit losses to inflationary pressures but expects them to be short-term.
December 05, 2023 | 4:12 pm
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America's Car-Mart reported lower-than-expected Q2 sales and a significant EPS loss, leading to a sharp 17.89% drop in stock price.
The stock price of CRMT is likely to face downward pressure in the short term due to the reported earnings miss and the substantial EPS loss, which was significantly below analyst expectations. The increase in credit loss allowance and the resulting $28 million charge are critical factors that have negatively impacted investor sentiment.
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