America's Car-Mart, Inc. Q3 FY2026 earnings call

• Retail volume decline was due to capital structure issues rather than demand. Constrained inventory purchase due to financing platform transition. • Winter Storm Fern impacted South Central operating footprint in final week of January. • Completed phase one and phase two of SG&A cost control plan with store consolidations and workforce reduction. 18 locations rationalized, active store count at 136. • Pay Your Way platform adoption expanded, with over 250% increase in customers enrolled in automatic recurring payments and ~65% of payment transactions made remotely. • Scaled Salesforce Collection CRM, moving from three-store pilot to ~15% of store base live on the platform by quarter end.

Retail volume declined 22.1% year over year. Total revenue was $286.8 million, down 12% year over year. Average retail sales price increased 7.1% year over year to $20,634. Interest income was $64.2 million, up 3.1% year over year. Gross profit per retail unit sold was up 8.8%. Net charge-offs as a percentage of average finance receivables were 6.5% compared to 6.1% in the prior quarter. SG&A totaled $51.5 million for the quarter, or 23.1% of reported sales. Excluding non-recurring impairment and restructuring charges, adjusted SG&A was 48.7 million, or 21.9% of sales.

• Singular focus is to close the revolving warehouse facility. • Volume recovery for inventory has begun building ahead of tax season. • Cost structure benefits from consolidations starting to flow through. • Continued focus on aligning expense base to revenue environment. • Expect blended cost of capital to decline and interest expense as percentage of revenue to improve as origination volumes recover and more funding comes through residual structure ABS transactions.

• Capital markets challenges including elevated rates, complex macro backdrop, and heightened scrutiny following industry disruptions. • Difficulty in predicting timing of securing a revolving warehouse facility as it requires aligning multiple stakeholders with their own risk views, obligations, and timelines. • Winter Storm Fern impacted operations including store closures, supply chain disruptions, and customer payment ability. • Geopolitical backdrop and inflation could affect vehicle costs, fuel prices, and household budgets of customers, impacting business performance.

Q: What are the sticking points in warehouse negotiations?

A: Completing warehouse financing requires simultaneous agreement across multiple stakeholders with complicated credit committee processes, their own risk views, and obligations.

Q: How are tax refunds affecting sales?

A: Tax refund per consumer is up, deal structures are better with more down payments and timely collections.

Q: How to allocate unit decline factors?

A: Inventory levels are the biggest driver, followed by Winter Storm Fern and smaller footprint.

Q: Impact of storm on delinquencies?

A: Difficult to quantify precisely, but delinquencies came down by mid-February.

Q: G&A one-time items and remaining savings?

A: $48.7 million adjusted SG&A, full impact of store closures starting in Q4.

Q: Inventory trends?

A: Inventories were down 30% year-over-year in Q3, started building back in January and February for tax season.

Q: Tax refund season impact on cash inflow?

A: Saw large remote payments on tax seasonal payments, deal structures improved with more money down.

Q: Warehouse line and other transactions?

A: Warehouse line is key for bridging origination to securitizations, ongoing work with partners and rating agencies on ABS transactions