America’s Car-Mart eyes high-price sales, Hispanic market
On a midday Thursday conference call, executives of America's Car-Mart, Inc. (Nasdaq: CRMT) said the company plans to increase the number of high-price sales, expand into the Hispanic market and lower operating expenses.
Car-Mart is a used car dealership chain that operates 91 locations primarily in the south and midwest. To increase the number of high-price sales, The Bentonville, Ark.-based company developed a computer database that enables the company to more effectively market to customers who are in a position to buy premium cars, company officials said.
Car-Mart also began selling in Arkansas and Alabama car protection plans that will forgive debt if a car is stolen. The company plans to expand this offering nationwide. The car protection plan has had high penetration where it is available, CEO Tim Falgout said on the call. He declined to tell an inquiring investor how much the plan costs.
“If you want to buy a car, then I’ll tell you,” Falgout said.
To improve operating expenses, Falgout said Car-Mart is going to scrutinize purchase costs, retail pricing and repair costs. Car-Mart’s gross margins are expected to be better in the next quarter, Falgout said. The gross margins will be impacted by a lower mix of repossessed wholesale vehicles, he said. Also, he said the high cost of car repair was partly to blame for the company’s dreary fourth-quarter results.
Before today’s opening bell, America’s Car-Mart reported revenue of $59.3 million for the fourth quarter ended April 30, compared with $62.5 million in the same period of 2006. Cart-Mart recorded a fourth-quarter profit of $2.1 million, or $0.17 per share, less than half the fourth-quarter profit of $4.6 million, or $0.38 per share, recorded in 2006.
Car-Mart has begun attempts to penetrate the Hispanic car-buying market. In May, the company began advertising on Hispanic radio and television stations, Falgout said. The company has also been hiring Spanish-speaking employees and providing cultural understanding training to current employees, he said.
In afternoon trading, shares in Car-Mart were up $0.62, or 4.72%, at $13.76.
