America’s Car-Mart (NASDAQ:CRMT) management said third-quarter fiscal 2026 results were primarily shaped by funding constraints that limited inventory purchases and pressured retail volumes, alongside a late-quarter weather disruption that affected operations and collections across its footprint.
Volume decline tied to funding transition and inventory constraints
President and CEO Doug Campbell opened the call by addressing the quarter’s 22.1% year-over-year decline in retail units sold, calling it “not a demand story” but “a capital structure story.” Management said the company’s ability to purchase inventory at full capacity was constrained during an ongoing transition of its financing platform, particularly because it does not yet have a revolving warehouse facility to bridge receivables originations to securitizations.
In the Q&A, Campbell said inventory availability was the “single biggest driving force” behind the sales decline. He also pointed to the company’s smaller footprint and the impact of Winter Storm Fern. When asked to frame the 22.1% decline, he noted the storm created an “8- or 9-day event” of disruption and reiterated that inventory was the largest opportunity if funding is normalized.
Winter Storm Fern disrupted sales, auctions, repairs, and collections
COO Jamie Fischer said Winter Storm Fern struck in the final week of January and impacted the company’s entire South Central operating footprint. The dealership network and corporate office were closed for three days, but Fischer said the operational impact extended beyond that due to continued cold temperatures, infrastructure damage, and supply chain disruption.
According to Fischer, the storm contributed to:
- Partial closures and delayed reopenings
- Closed wholesale auctions, limiting the company’s ability to dispose of inventory
- Vehicle transportation disruptions
- Extended repair and reconditioning timelines as parts supply chains were delayed
- Meaningful impact on customers’ ability to make payments and associates’ ability to collect
Management said all stores were back online as of February 1.
Revenue fell, but pricing, unit economics, and interest income improved
Fischer said retail units sold decreased to 10,275 and total revenue declined 12% year-over-year to $286.8 million. Average retail sales price increased 7.1% to $20,634. He said the unit decline was driven by lower inventory availability across the quarter, a 12% smaller footprint versus the prior year, and the storm.
Despite lower volumes, management highlighted improved unit economics. Gross profit per retail unit sold increased 8.8%, which Fischer said outpaced the increase in vehicle sales price and reflected a 1.9% improvement in underlying unit cost. He attributed that cost discipline to progress in vehicle quality, including lower service contract repair costs.
Interest income was $64.2 million, up 3.1% year-over-year, which Fischer said was supported by “continued strong performance of the existing portfolio.”
On inventory, Fischer said levels “bottomed in December,” aligning with the lowest sales volume of the quarter. The company began rebuilding in January ahead of tax season, and by the time tax season began in February, inventory had increased 44% from the December bottom. Management cautioned that sustaining that trajectory depends on completing a warehouse facility.
Cost actions: store consolidations completed; savings expected to show in Q4
Campbell and Fischer said the company completed phase one and phase two of its SG&A cost control plan, including workforce reductions and store consolidations. In total, 18 locations were rationalized, bringing the active store count to 136. Management described the consolidations as an effort to both reduce costs and concentrate resources and inventory into stronger-performing locations.
CFO Jonathan Collins said SG&A totaled $51.5 million, or 23.1% of sales, including approximately $2.8 million of non-recurring impairment and restructuring charges related to phase two consolidations. Excluding those items, adjusted SG&A was $48.7 million, or 21.9% of sales. Collins said the gap versus the company’s long-term SG&A target of 16.5% was “almost entirely a volume denominator issue.”
In the Q&A, management said phase two store closures occurred in mid-January, so savings were not yet reflected on a full-quarter basis, with benefits expected to begin flowing through in the fourth quarter. Campbell added that January’s monthly run rate was lower than the quarter average and said the company’s expectation was to be “somewhere between $45-$46 million” at its current run rate, with additional clean-up work underway.
Credit and collections: stable underlying performance; storm drove quarter-end delinquency spike
Collins said underlying credit performance remained stable. Net charge-offs as a percentage of average finance receivables were 6.5% versus 6.1% in the prior quarter, which he attributed to a denominator effect from slower originations and portfolio mix as acquired locations (about 13% of the portfolio) mature into expected loss curves. He said core legacy locations were “essentially flat,” loss severity remained flat, and losses per dollar of principal were slightly improved.
Management said portfolio quality improved, with the highest credit tier representing 66.7% of accounts receivable versus 62.8% a year ago. Collins also said the company maintained discipline in a volume-constrained environment, focusing on stronger deal structures rather than stretching for weaker deals.
Delinquencies were affected by the storm’s timing at quarter end. Accounts over 30 days past due rose to 4.4% from 3.7%, and the company’s recency metric declined to 71.4% from 81.3% (excluding 1- to 2-day grace period accounts). Collins said these metrics began normalizing after quarter end, and by mid-February, 30-day-plus delinquencies had improved to the 3.7% to 3.8% range. In the Q&A, he said it was difficult to quantify the precise storm impact but noted the mid-February normalization as a key indicator.
Total collections were $179 million, up 1.5% year-over-year, and cash collected as a percentage of average finance receivables improved 11 basis points. Average collected per active customer account per month rose to $581 from $568.
Management also discussed the company’s allowance for credit losses. Collins said the allowance as a percentage of finance receivables increased to 25.53% at January 31, 2026, from 24.31% a year earlier, while net charge-offs declined to $96 million from $106 million and units charged off fell to roughly 9,200 from about 10,300. He said the reserve increase reflected receivable base contraction, seasoning of newer vintages, and macro pressures on customers, rather than deterioration, and noted the reserve represented about 3.6 times quarterly charge-offs.
Digital payments and collections tools tested during the storm
Fischer said adoption of the company’s “Pay Your Way” platform continued to expand. Since its launch in the first quarter, automatic recurring payment enrollment increased more than 250%, and about 65% of payment transactions were consistently made remotely, a level he said has stabilized since the second quarter.
Management highlighted storm-related performance as a key proof point. Fischer said the company temporarily suspended remote payment fees to assist customers during closures, leading to a significant increase in remote payment activity. Campbell added in the Q&A that the company saw “the largest amount of remote payments that we’ve ever had” on tax seasonal payments when customers did not need to come into stores.
On collections technology, Fischer said the company scaled its Salesforce collections CRM from a three-store pilot at the end of Q2 to about 15% of the store base live by quarter end, with full chain-wide adoption described as a prerequisite to entering phase three of its SG&A strategy.
Capital structure: ABS milestone achieved; warehouse facility remains the key missing piece
Campbell said the company has made progress in reshaping its financing, including closing a $300 million term loan in October that retired its revolving line of credit and removed income statement covenants. In December, the company completed its 2025-4 ABS transaction: $161.3 million in asset-backed notes at a weighted average coupon rate of 7.02%.
Management emphasized that the 2025-4 deal was the company’s first ABS transaction with a residual cash flow structure (a “non-turbo” deal). Campbell said completing that transaction in a turbulent market was a sign of investor and rating agency confidence in the company’s securitization program.
However, Campbell repeatedly returned to the need for a revolving warehouse facility, which he said would bridge originations to securitizations and allow the company to serve existing demand at scale. He said the company has identified partners and discussions are “active and substantive,” but timing remains difficult because it requires simultaneous agreement across multiple stakeholders and credit committee processes in a cautious market environment. Collins echoed that securing an additional financing source such as a warehouse facility remains the critical next step in the transition.
Taxes and earnings: non-cash charges drove GAAP loss
Collins said the company recognized a non-cash income tax charge of $47 million to establish a full valuation allowance against a deferred tax asset associated with net operating losses at Colonial Auto Finance, citing GAAP requirements and three years of cumulative pre-tax losses at that entity. He said the allowance has no impact on cash taxes and does not affect the ability to utilize NOL carryforwards if profitability returns.
For the quarter, GAAP loss per share was $9.25. Collins said the result included three significant non-cash and non-recurring items: the $47 million valuation allowance, $18.2 million in credit loss allowance adjustments reflecting a reserve build, and $2.8 million in impairment charges tied to phase two store consolidations. Adjusted for these items, adjusted loss per share was $1.53.
Tax season early indicators and near-term priorities
In the Q&A, Campbell said early tax season indicators were favorable, citing better deal structures, higher down payments, and a “high rate of collections” on scheduled tax seasonal payments. He also said the company was seeing improved deal structures in January and December as well.
Looking ahead, Campbell said the company’s priorities include closing the warehouse facility, continuing volume recovery as inventory rebuilds, maintaining a cost structure aligned with the revenue environment, and sustaining credit quality in what he described as a challenging macro backdrop.
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.
