America’s Car-Mart (NASDAQ:CRMT) said its fourth-quarter and fiscal 2026 results were shaped by liquidity constraints and a reduced store footprint as the used-car retailer and finance company continues a strategic review and seeks additional financing capacity.
President and CEO Doug Campbell said fiscal 2026 was a “transitional year” focused on strengthening liquidity and the company’s capital structure. He said the company intentionally reduced originations and inventory during the fourth quarter because it had limited origination capital and no revolving warehouse facility.
The company did not hold a question-and-answer session, citing the ongoing strategic review. Campbell said the review is being led by a special committee of independent directors with restructuring experience and is evaluating “the full range of alternatives” to preserve stakeholder value.
Sales decline as originations remain constrained
Chief Operating Officer Jamie Fischer said unit sales fell 27.1% year over year to 11,411 vehicles in the fourth quarter, while revenue declined 18.2% to $302.8 million. Gross profit margin was 31.2%, down from 36.4% a year earlier.
Fischer attributed the margin compression largely to lower volume and mix, including a higher proportion of lower-margin wholesale sales relative to retail. She also said some costs, including service contract and customer repair costs, track the size of the portfolio rather than the number of vehicles sold in the period.
For the full year, Fischer said gross margin was 35.4%, while gross profit per unit rose 1% to $7,442. She said that indicated the quarterly margin pressure was driven by mix and volume rather than the economics of the contracts the company originated.
Campbell said the company’s limited financing capacity prevented it from originating at the volume demanded by customers. He said America’s Car-Mart continues to pursue a warehouse facility, recapitalization or other financing transaction.
Store consolidations reduce footprint to 94 locations
The company completed 60 store consolidations during fiscal 2026, reducing its active store count from 154 to 94. Campbell said the consolidations were part of a three-phase plan outlined earlier in the year, with the third phase in April being the largest and going “deeper than initially modeled.”
Campbell said the remaining stores are stronger performers, with historical units per store approximately 30% higher than the company’s fiscal 2025 average. He also acknowledged the difficulty of the decisions, particularly for employees affected by the closures.
Fischer said the store optimization left the company with more productive rooftops and long-tenured general managers. She said the company also created centralized servicing for accounts where closed locations did not have a nearby store that could take over customer relationships. That centralized servicing covers roughly 8% of receivables and is operated remotely from the company’s home office in Rogers, Arkansas.
Fischer said the company expanded digital tools to support the shift, including a customer self-service account center, Pay Your Way payment tools, remote contract modifications and centralized service contract repair management. She said the company is also using artificial intelligence to assist with contract coverage reviews, auto-approval of straightforward repair claims and invoice validation.
Credit metrics weaken, but management points to smaller receivables base
Jonathan Collins, CFO, said net charge-offs as a percentage of average finance receivables were 7.5% in the quarter, up from 6.9% a year earlier. He said the increase partly reflected a smaller receivables base after originations declined sharply.
The principal balance of finance receivables at period end fell 6.4% from the prior-year quarter. Collins said the smaller base “mechanically elevates” the charge-off ratio, and he attributed the remaining modest increase to fuel and cost-of-living pressure on customers rather than a change in underwriting standards.
Campbell also said the increase in charge-offs did not reflect a credit quality problem or underwriting failure. He said the company’s best-tier customers make up a larger share of the portfolio than a year ago.
Collins said customers in the company’s highest credit tiers, ranks 5 through 7, represented 66.6% of accounts receivable, up from 64.6% a year earlier. Accounts more than 30 days past due were 4.1% at year-end, compared with 3.4% a year ago and down from 4.4% at Jan. 31.
The allowance for credit losses was $329.9 million at April 30, equal to 25.15% of finance receivables net of deferred revenue and pending accident protection plan claims. That compared with 23.25% a year earlier and 25.53% at Jan. 31.
Collections remain central to liquidity
Fischer said full-year collections rose 2.2% to $730 million, and cash collected as a percentage of average finance receivables improved by 12 basis points year over year. She said tax refund season collections, which fall in the fourth quarter, were within 1% of the prior fiscal year despite higher gasoline prices and remote servicing for closed dealerships.
Collins said fourth-quarter collections totaled $185.7 million, or roughly $60 million per month, down only 2.8% from the prior-year period even as receivables declined 6.4%. Average collected per active customer per month improved to $617 from $612 a year earlier.
Collins said collections are especially important because, under the accelerated amortization structure of most securitizations, collections on those pools are routed to trusts to repay non-recourse notes rather than fund operations. He said about 60% of receivables were securitized at year-end, and a significant portion of residual collateral is scheduled to be released back to the company over roughly the next 15 months as notes amortize and are called.
Loss reported as company cites going concern disclosure
For the quarter, America’s Car-Mart reported a GAAP loss per share of $3.56 and adjusted earnings per share of $0.48. For the full year, the company reported a GAAP loss per share of $16.79 and an adjusted loss per share of $3.71.
Collins said the difference between GAAP and adjusted results for the quarter reflected $6.4 million of impairment, $4 million of restructuring charges, a $24.9 million credit loss impact from an allowance percentage adjustment and an $8.4 million tax impact related to a deferred tax asset valuation allowance.
SG&A expense totaled $47.6 million in the quarter, or 19.6% of sales, compared with $48.3 million and 15.6% of sales a year earlier. Excluding the $4 million of restructuring charges tied to the strategic review, adjusted SG&A was $43.6 million, or 18% of sales.
Campbell said the company’s Form 10-K will include a going concern disclosure because it has not secured additional financing or an alternative transaction to resolve its liquidity constraint. He said the disclosure does not reflect a change in customer repayment behavior.
As of April 30, total debt net of cash was $590.7 million, down from $652.2 million a year earlier. Total cash, including restricted cash, was $131.6 million, while unrestricted cash available to fund operations and capital needs was $47 million. Collins said the company was in compliance with all applicable covenants as of the June 30 testing date under a June amendment to its credit and guarantee agreement and remained in compliance as of the call.
The company also announced a CFO transition. Collins will leave on July 31 to become CFO of Genesco, and Marie Persichetti, senior vice president of capital markets, will become CFO on Aug. 1. Persichetti said her near-term focus will be supporting the strategic review process and meeting the milestones under the company’s credit agreement amendment.
About America’s Car-Mart (NASDAQ:CRMT)
America’s Car-Mart, Inc operates as a retailer and financer of used automobiles, specializing in serving customers with limited credit histories through an in-house “buy-here, pay-here” financing model. The company’s dealerships offer a selection of late-model, pre-owned vehicles across a range of makes and models, supported by on-site service centers and extended warranty products. In addition to vehicle sales, America’s Car-Mart generates revenue from finance charges, insurance products and ancillary services such as GAP coverage and credit life and disability insurance.
Founded in 1981 in Forrest City, Arkansas, America’s Car-Mart has grown from a single dealership into a publicly traded company listed on the Nasdaq under the ticker CRMT.
