The following is a summary of the America's Car-Mart, Inc. (CRMT) Q2 2025 Earnings Call Transcript:

Financial Performance:

• Total revenues decreased by $12.5 million or 3.5% due to a 9.1% decline in retail units sold, partially offset by a 3.6% increase in interest income and a $13.2 million service contract benefit.

• Gross margin percentage of sales was 39.4%, or 36.5% when excluding the impact of the $13.2 million service contract revenue recognition benefit.

• Net charge-offs as a percentage of average finance receivables improved to 6.6% from 7.2%.

• Allowance for credit losses percentage of finance receivables decreased slightly to 24.72% from 25%, reflecting improved performance driven by the new LOS system.

Business Progress:

• Executed a $300 million ABS transaction which was well oversubscribed, demonstrating strong market demand.

• Introduced risk-based pricing in several markets to better match product offerings with customer credit profiles.

• Continued evolutionary improvements in underwriting performance shown by a 21% improvement in cumulative net losses.

Opportunities:

• The extension and enhancement of the revolving credit facility and other funding programs will enable more robust financial maneuvering and potential market expansion.

• The service contract period adjustment promises a continuous improvement in revenue recognition, enhancing financial outcomes.

• The arrival of a new COO and the pilot implementation of risk-based pricing are operational advancements expected to enhance overall efficiency and market competitiveness.

Risks:

• Economic influence on consumer spending power and the tightening of underwriting standards may continue to impact sales volumes.

More details: America's Car-Mart IR

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