Why Did America's Car-Mart Plunge 12.65% on Earnings Miss?

On September 4, 2025, America's Car-Mart's stock experienced a significant drop of 12.65% in pre-market trading.

America's Car-Mart reported its financial results for the first quarter of fiscal year 2026, revealing a 1.9% decrease in total revenue to $341.3 million. This decline was primarily due to a 5.7% reduction in sales volumes, which fell to 13,568 units. Despite the drop in sales, the company saw a 7.5% increase in interest income, totaling $4.6 million. Additionally, total collections rose by 6.2% to $183.6 million, and the gross margin percentage improved by 160 basis points to 36.6%. The allowance for credit loss also improved to 23.35% from 25.00% a year ago. However, the company reported a loss per share of $0.69, compared to a loss of $0.15 in the previous year.

The company's strategic investments, such as the deployment of LOS V2 and the upgrade of the Pay Your Way platform, have shown measurable results. The new underwriting scorecard and risk-based pricing have enabled more accurate risk identification and better customer segmentation. The Pay Your Way platform has also driven a shift towards online payments, improving customer convenience and payment behavior. The company is focusing on managing sales to balance affordability, profit margins, and portfolio quality, while also working to improve capacity constraints due to rising wholesale prices.

Despite the challenges, America's Car-Mart is optimistic about its future. The company has seen a significant increase in credit applications from higher-ranking customers, with nearly 72% of the portfolio now operating under enhanced underwriting standards. The recent launch of LOS V2 is expected to further sharpen the company's underwriting capabilities, creating a stronger foundation for sustainable returns.