AMERICAS CARMART INC
For the period ended Jul 31, 2026. Filed Sep 9, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2026 · Filed Sep 9, 2026
CRMT$1.44-5.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-01-31; filed 2026-03-12.
0001628280-26-017369
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-31; filed 2026-09-09.
0001628280-26-061105
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 114 current paragraphs.
43 unchanged; 21 reworded; 49 added; 51 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
•the Company’s ability to continue as a going concern;
Current report
•the Company’s review of strategic and financing alternatives and the potential outcomes of that review and its ability to execute and consummate any potential transaction;
Current report
•the covenant relief and waivers under, and the Company’s ability to satisfy the milestones and other conditions of, the June 19, 2026 amendment to the Company’s Credit and Guaranty Agreement;
Current report
•the Company’s liquidity and its efforts to preserve liquidity, including the curtailment of inventory purchases and finance receivable originations;
Current report
•the availability of capital, including through income from operations and securing additional financing to sustain and supplement operating cash flows through additional securitization transactions, warehouse credit facilities, or other sources, and the Company’s ability to consummate such financing transactions;
Current report
•maintenance of the Company’s operational infrastructure, including the continued transition to a centralized collections model and ongoing technology initiatives;
Current report
•future revenues and operating results;
Current report
•seasonality; and
Current report
•the Company’s business and operating strategies and expectations.
Current report
•the existence of substantial doubt about the Company’s ability to continue as a going concern, and the effects of that disclosure on the Company’s relationships with customers, associates, suppliers, lenders and other stakeholders;
Current report
•the Company’s ability to satisfy the milestones and other conditions of the June 19, 2026 amendment to its Credit and Guaranty Agreement, to further extend the related covenant relief and waiver period beyond September 11, 2026, if needed, and to obtain further waivers, covenant relief, forbearance or financing from its lenders on acceptable terms, or at all;
Current report
•the outcome of the Company’s review of strategic and financing alternatives, including the risk that the review does not result in any transaction, results in a transaction on unfavorable terms, or is not completed in a timely manner, and the costs, timing and uncertainties associated with the review and related advisory engagements;
Current report
•the Company’s substantial level of indebtedness and its ability to service that indebtedness, and the risk that its indebtedness could be accelerated (including under cross-default or cross-acceleration provisions) and that the Company would not have sufficient liquidity to repay it;
Current report
•the Company’s ability to fund finance receivable originations, vehicle inventory purchases, debt service and operating expenses, including its ability to establish a warehouse credit facility and to continue to complete asset-backed securitization transactions;
Current report
•the curtailment of the Company’s vehicle inventory purchases and finance receivable originations and the effect of that curtailment on the Company’s sales, revenues and collections;
Current report
•the Company’s changes to customer collection practices, including the transition to a centralized collections model and the transfer of customer accounts to dealerships located farther from customers’ prior collection locations and the effect of the change on collections, revenues, and customer relationships;
Current report
•the potential need for the Company to seek protection under applicable bankruptcy or insolvency laws;
Current report
•the possibility that holders of the Company’s common stock could experience a significant or complete loss of their investment, including as a result of any restructuring, recapitalization, or dilutive issuance of equity or equity-linked securities;
Current report
•the Company’s ability to maintain compliance with the continued listing requirements of, and the continued listing of its common stock on, the Nasdaq Stock Market;
Current report
•the diversion of management’s attention from ordinary-course operations as a result of the strategic review and the Company’s liquidity and capital-structure matters;
Current report
The conditions affecting the Company’s liquidity and capital structure that were described in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2026 continued throughout the first quarter of fiscal 2027 without material improvement. The Company continued to have no revolving credit facility or warehouse facility available to it, completed no asset-backed term funding transactions during the quarter, and obtained no new financing. The review by the special committee of the Company’s Board of Directors (the “Special Committee”) of strategic and financing alternatives, which was underway when the Form 10-K was filed, remained in progress at July 31, 2026 and has not resulted in a transaction as of the date of this report. The matters reported as subsequent events in the notes to the consolidated financial statements included in the Form 10-K developed during the quarter: the Company failed to comply with the minimum liquidity and minimum collateral coverage ratio covenants under its Credit and Guaranty Agreement as then in effect, obtained a series of short-term forbearance agreements with its lenders, and on June 19, 2026 entered into an amendment to the Credit and Guaranty Agreement (the “Amendment”) providing covenant relief for a limited period (which on September 4, 2026, the lenders agreed to extend through September 11, 2026), subject to the Company’s compliance with certain milestones and other conditions. In connection with the Amendment, the Company incurred approximately $3.9 million of fees and costs. Of that amount, a $3.0 million closing payment was added to the outstanding principal balance of the term loan and approximately $0.7 million of professional fees directly attributable to the Amendment were capitalized as debt issuance costs (see Note B). The remaining approximately $0.3 million of legal, financial advisory and other professional fees did not qualify for deferral and were expensed as incurred and included in net loss for the three months ended July 31, 2026. As described in Note B to the Condensed Consolidated Financial Statements, these conditions continue to raise substantial doubt about the Company’s ability to continue as a going concern.
Current report
Although the Company collects a substantial amount from customers each month, under the accelerated amortization structure that applies to most of its outstanding securitizations a significant portion of those collections is applied directly to the repayment of non-recourse notes, which limits the cash available to fund vehicle inventory purchases and finance receivable originations. The Company’s response to these constraints, which began during fiscal 2026 and continued through the first quarter of fiscal 2027, has included curtailing vehicle inventory purchases and finance receivable originations, tightening underwriting standards, consolidating 60 dealership locations into nearby dealerships and reducing associated staff, significantly reducing capital expenditures, and suspending dealership acquisitions. The Company is also prohibited under its current financing arrangements from repurchasing shares of its common stock or paying dividends without the consent of its lenders. That curtailment, rather than any change in underlying customer demand, is the principal driver of substantially every period-over-period comparison discussed in this Item 2.
Current report
Total revenues for the first three months of fiscal 2027 decreased 57.3% to $145.8 million, and the Company reported a net loss attributable to common stockholders of $69.0 million, or $8.28 per diluted share, compared to a net loss of $5.7 million, or $0.69 per diluted share, in the prior year period. Retail units sold decreased 81.9% to 2,450 units. The effects of the capital and inventory constraints intensified during the quarter. Compared to April 30, 2026, inventory decreased to $35.2 million from $54.1 million, finance receivables, net, decreased $169.4 million, or 15.7%, to $909.8 million, and cash, cash equivalents and restricted cash decreased $21.7 million to $110.0 million. The Company expects the ongoing capital and inventory constraints to continue to adversely affect its revenues and operating results in future periods. The extent and duration of those impacts will depend, in part, on the Company’s ability to improve liquidity and increase inventory purchases and finance receivable originations.
Current report
The Company’s cost structure is relatively fixed, as interest expense and the provision for credit losses are functions of a finance receivables portfolio originated in prior periods rather than of current-period sales. The Company’s operating results are therefore sensitive to changes in sales volume. Because the Company’s reduction in sales during the first quarter of fiscal 2027 was substantially greater than the reduction in the Company’s cost base during the period, the Company’s expenses during the current quarter as a percentage of sales were substantially higher than the prior year quarter, although cost of sales and the provision for credit losses each declined in absolute dollars.
Current report
Collections on finance receivables were the Company’s principal source of operating cash during the first quarter of fiscal 2027. In connection with the Company’s consolidation of 60 dealership locations during fiscal 2026, the Company transferred the servicing and collection of the associated customer accounts to nearby dealerships or to the Company’s centralized collections department. The Company’s rollout of its centralized collections model, which began in the fourth quarter of fiscal 2026, continued through the first quarter of fiscal 2027. Because the model is still in the early stages of operation and its effectiveness over a full collections cycle has not yet been demonstrated, its ultimate effect on collections and credit losses is uncertain, and a shortfall in collections would directly reduce the cash available to the Company. Total collections of principal, interest, and late fees for the quarter decreased $19.2 million, or 10.5%, to $164.4 million compared to $183.6 million in the prior year period, and collections of principal as a percentage of average finance receivables were 8.3%, compared to 7.9% in the prior year period. Net charge-offs were $124.5 million for the quarter, compared to $100.1 million in the prior year period, on a portfolio 23.1% smaller, reflecting a combination of operational and macroeconomic factors. The Company began rolling out a centralized collections function in the fourth quarter of fiscal year 2026, consolidating account servicing that had previously been performed at the dealership level, and completed the transition during the first quarter of fiscal year 2027 in connection with the transition of the consolidated dealerships. The ramp-up spanned both periods and included the migration of active accounts to the centralized platform, the hiring and training of collections staff, and the implementation of standardized contact and workflow procedures. Collections activity during this ramp-up period reflected the operational demands of the transition, and delinquency and charge-off performance on the affected accounts was elevated relative to the Company’s historical experience. Separately, continued fuel and cost-of-living pressure weighed on the Company’s customers throughout the quarter. Accounts over 30 days past due were 4.6% at July 31, 2026, compared to 4.1% at April 30, 2026.
Current report
(Operating Statement)
Current report
Total revenues decreased $195.6 million, or 57.3%, for the three months ended July 31, 2026 as compared to the same period in the prior fiscal year. Sales decreased $186.3 million, or 67.5%, and interest and other income decreased $9.2 million, or 14.2%. The decrease in sales was primarily the result of the curtailment of vehicle inventory purchases and finance receivable originations undertaken to preserve liquidity, which limited the volume of inventory available for sale, together with the consolidation of 60 dealership locations during fiscal 2026, which reduced the Company’s active dealership count from 154 to 94. Retail units sold decreased 11,118 units, or 81.9%, to 2,450 units. The decrease in retail volume was partially offset by an increase in third-party wholesale sales, which rose to $21.0 million from $10.8 million.
Current report
The increase primarily reflects a change in disposition strategy rather than a change in repossession activity. With limited capital available to fund new originations, the Company began wholesaling substantially all repossessed vehicles in late May to accelerate cash conversion, rather than retaining a portion of those units for retail sale as it had historically. The decrease in interest and other income reflects the decline in average finance receivables, net, which decreased $187.6 million, or 15.9%, from the prior year period as originations were reduced and the portfolio continued to amortize.
Current report
The cost of sales as a percentage of sales increased to 78.2% for the three months ended July 31, 2026 compared to 63.4% for the same period of the prior fiscal year, resulting in a gross margin as a percentage of sales of 21.8% for the current year period compared to 36.6% for the prior year period. In dollar terms, gross profit decreased $81.5 million, or 80.6%. The decline in gross margin resulted principally from the increased proportion of third-party wholesale sales, which represented 23.4% of total sales in the current year period compared to 3.9% in the prior year period and which were sold at an aggregate loss of $4.7 million as the Company made a decision to sell more repossessed vehicles through wholesale channels, rather than re-retailing them, as part of its capital management strategy, together with the fixed and semi-fixed components of cost of sales being spread over a substantially reduced retail sales base.
Current report
Gross margin as a percentage of sales is significantly impacted by the average retail sales price of the vehicles the Company sells, which is largely a function of the Company’s purchase cost. As purchase costs increase, the margin between the purchase cost and the sales price of the vehicles the Company sells generally narrows on a percentage basis because the Company must offer affordable prices to its customers. The average retail sales price, excluding ancillary products, for the first quarter of fiscal 2027 was $18,530, an increase of $1,211, or 7.0%, over the prior year quarter.
Current report
Selling, general and administrative (“SG&A”) expenses as a percentage of sales increased to 57.3% for the three months ended July 31, 2026 compared to 18.6% for the same period in the prior fiscal year. The increase in the percentage is principally a function of the substantially reduced sales base. In absolute terms, SG&A expenses were essentially unchanged, increasing $0.1 million, or 0.3%, from the same period in the prior fiscal year. This aggregate result reflects two offsetting drivers. The Company incurred $9.6 million in professional and advisory fees in connection with the Special Committee’s ongoing review of strategic and financing alternatives intended to address the Company’s liquidity and capital structure, and $4.1 million of expense associated with the retention program approved by the Board of Directors on June 3, 2026 for senior management and other key employees, which was intended to support operational stability during that review. Excluding these two items, all other SG&A expenses decreased $13.5 million, or 26.3%, from the same period in the prior fiscal year, consistent with the reduction in the Company’s footprint.
Current report
Provision for credit losses as a percentage of sales was 79.6% for the three months ended July 31, 2026 compared to 37.3% for the same period in the prior fiscal year. In overall dollars, the provision for credit losses decreased $31.5 million, or 30.5%, in the first quarter of fiscal 2027 compared to the same period of the prior fiscal year, reflecting the smaller finance receivables portfolio. The increase in the provision as a percentage of sales is primarily a function of the substantially reduced sales base resulting from the curtailment of inventory purchases and finance receivable originations undertaken to preserve liquidity.
Current report
Interest expense for the three months ended July 31, 2026 as a percentage of sales increased to 21.4%, from 6.2% for the prior year period. In dollar terms, interest expense increased $2.2 million, or 12.8%. The increase reflects interest on the senior secured term loan entered into on October 30, 2025, together with the amortization of debt issuance costs, original issue discount and warrant discount associated with that facility. The applicable margin on the term loan was 7.50% per annum over the term benchmark rate through June 18, 2026 and, as a result of the Amendment, 10.50% per annum over the term benchmark rate for the remainder of the period. Of the interest expense recognized on the facility during the quarter, $1.1 million was paid in kind by adding such amount to the outstanding principal balance rather than in cash. The effect of the term loan was partially offset by lower interest expense on the Company’s asset-backed non-recourse notes payable, the outstanding balance of which declined from $610.8 million at July 31, 2025 to $357.7 million at July 31, 2026 as those notes amortized from collections on the underlying auto finance receivables, and by the absence of any interest on a revolving credit facility. The Company repaid and retired its revolving line of credit on October 30, 2025. As a result, total outstanding debt decreased from $775.1 million at July 31, 2025 to $623.9 million at July 31, 2026, a reduction of 19.5%, while interest expense increased, reflecting the higher cost of the senior secured term loan relative to the borrowings it replaced. Interest expense increased as a percentage of sales principally because the Company sold substantially fewer vehicles during the period as a result of the curtailment of vehicle inventory purchases and finance receivable originations undertaken to preserve liquidity, which reduced the sales base.
Current report
Finance receivables, net, decreased $169.4 million, or 15.7%, since April 30, 2026 and decreased $273.7 million, or 23.1%, since July 31, 2025, while total revenues decreased 57.3% for the three months ended July 31, 2026 compared to the same period in the prior fiscal year. The decline in finance receivables reflects the curtailment of finance receivable originations undertaken to preserve liquidity, together with continued collections and charge-offs on the existing portfolio.
Current report
During the first three months of fiscal 2027, inventory decreased by $18.9 million, or 34.9%, compared to April 30, 2026, reflecting the Company’s curtailment of vehicle inventory purchases to preserve liquidity together with the disposition of vehicles via wholesale channels. Annualized inventory turns were 6.3 for the current year quarter compared to 6.2 for the prior year first quarter. The reduction in inventory levels has constrained, and is expected to continue to constrain, the Company’s retail sales volumes.
Current report
Property and equipment, net, decreased by $2.8 million at July 31, 2026 as compared to April 30, 2026. The decrease reflects $1.8 million in depreciation expense and disposals of property and equipment which resulted in a $0.2 million loss on disposal and generated cash proceeds of $0.9 million, partially offset by $0.1 million of expenditures during the three months ended July 31, 2026.
Current report
Accounts payable and accrued liabilities decreased by $11.0 million, or 16.1%, at July 31, 2026 as compared to April 30, 2026, related primarily to the reduction in vehicle inventory purchases, lower expenses related to fewer stores and the timing of payments and check clearings.
Current report
Deferred revenue decreased $29.6 million, or 30.7%, at July 31, 2026 as compared to April 30, 2026, consisting of an $11.0 million decrease in deferred accident protection plan revenue and an $18.6 million decrease in deferred service contract revenue, primarily resulting from the decrease in units sold.
Current report
Deferred income tax liabilities, net, were unchanged at July 31, 2026 as compared to April 30, 2026.
Current report
The Company had $357.7 million and $458.7 million of notes payable outstanding related to asset-backed term funding transactions as of July 31, 2026 and April 30, 2026, respectively. These non-recourse notes issued by the Company accrue interest at fixed rates with a weighted average rate of 6.6% as of July 31, 2026 and April 30, 2026. The Company did not complete any asset-backed term funding transactions during the three months ended July 31, 2026. The $101.0 million reduction in the outstanding balance during the quarter reflects scheduled and accelerated amortization from collections on the underlying auto finance receivables. Most of the Company’s outstanding securitizations use an accelerated amortization structure under which a significant portion of collections is applied directly to the repayment of the related non-recourse notes, which reduces the amount of collections available to the Company to fund vehicle inventory purchases, finance receivable originations, and other operating needs. See Note G to the Condensed Consolidated Financial Statements for further details on the non-recourse notes payable.
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Removed paragraphs (51)
Previous report
•operational infrastructure investments;
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•technological investments and initiatives;
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•future revenue growth;
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•the availability of capital, including through income from operations, warehouse facilities, term securitization transactions, and other debt or equity financing;
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•the consummation of future financing transactions, including the Company's ability to consummate such transactions;
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•remediation of the identified material weakness in internal control over financial reporting; and
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•the Company’s business, operating and growth strategies and expectations.
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•the ability to identify and obtain favorable locations for new or relocated dealerships at reasonable cost;
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•the ability to successfully transition customers and inventory from underperforming dealerships to nearby more productive dealerships as part of the Company's footprint optimization strategy;
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•the ability to successfully identify, complete and integrate new acquisitions;
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Over the past ten fiscal years, the Company's revenue has grown at an average annual rate of 10.6%. For the first nine months of fiscal 2026, sales decreased by 6.1% compared to the prior-year period, driven primarily by a 9.4% decline in retail units sold (37,480 units versus 41,373 units), partially offset by a 2.6% increase in the average retail sales price to $20,041. Interest income also rose by 5.0%.
Previous report
The Company has been focused on strengthening its underwriting and improving vehicle quality by procuring lower-mileage vehicles, while balancing affordability for customers. The Company believes this will aid in driving down our customers’ vehicle repair costs, reduce our service contract repair expenses, and lead to better recovery values in the event of repossession. When combined with inventory procurement efficiencies, these changes are expected to drive improved customer experience and contribute to better gross margins. The nine months ended January 31, 2026 have begun to reflect those improvements in repair expenses and wholesale retention, reflected in the gross margin improvements.
Previous report
Over the last five fiscal years, the Company's provision for credit losses as a percentage of sales averaged 28.14%. During fiscal 2025, credit losses were 32.68% as a percentage of sales. For the first nine months of fiscal 2026, the provision for credit losses as a percentage of sales increased to 41.7%, compared to 33.7% for the same period of fiscal 2025, resulting from an increase in frequency of losses coupled with the effect of lower sales revenues. Based on the Company's current analysis of credit losses, the allowance for credit losses at January 31, 2026 was 25.53% of finance receivables, net of deferred revenue and pending accident protection plan claims, an increase from 24.31% at January 31, 2025 and an increase from 23.25% at April 30, 2025, resulting in a $24.5 million increase to the allowance for credit losses in the first nine months of fiscal 2026.
Previous report
The Company’s credit losses and charge-offs continue to be influenced by broader market and economic conditions, including inflationary pressures on essential consumer expenditures such as vehicle insurance, rent, groceries, gasoline, childcare, and other staple items, as well as overall unemployment levels and the income profiles of its customer base. Notwithstanding these external factors, the Company believes that consistent execution of its established business practices remains the most significant determinant of its long-term credit loss performance. During the first quarter of fiscal 2026, the Company advanced its credit and collections infrastructure through enhancements to its loan origination system (“LOS”), including the deployment of an updated scorecard and embedded risk-based pricing, which are designed to more closely align expected returns with customer risk characteristics. Early indicators reflect a shift in originations toward higher-ranked customers, consistent with the system's intended functionality. The Company also implemented enhancements to its payments platform to facilitate increased utilization of online payment channels and promote more consistent customer payment behavior. Management believes these initiatives will strengthen underwriting discipline, support improved collection effectiveness, and provide a more scalable framework for future growth.
Previous report
The Company's gross profit margin as a percentage of sales for the first nine months of fiscal 2026 was 36.7% of sales, consistent with 36.7% in the prior year period. The prior year period included a 150-basis point benefit from the impact of the service contract accounting change in estimate for revenue recognition. The gross margin improvement in the current year, after excluding the benefit in the prior year, results from a decrease in the aggregate cost of the vehicles sold related to the Company's initiatives around pricing discipline, lower frequency and severity of vehicle repair costs, and improved retention of wholesale buyers for vehicles repossessed by the Company. The Company's gross margin is based upon the cost of the vehicle purchased, with higher-priced vehicles typically having higher gross margin dollars but lower gross margin percentages. Gross margin is also affected by the percentage of wholesale sales to retail sales, which relates, for the most part, to repossessed vehicles sold at or near cost. The Company plans to continue to focus on managing gross margin dollars in the near term, as well as continuing to focus on improving wholesale results, cost controls, and operational improvement around the acquisition and disposal of vehicles.
Previous report
The Company consistently focuses on collections. Each dealership is responsible for its own collections with supervisory involvement and oversight from the corporate office. Total collections of principal, interest, and late fees for the first nine months of fiscal 2026 increased by $21.4 million, or 4.1%, to $544.4 million over the prior year period. The average total collected per active customer per month increased to $582, compared to $563 for the same period in the prior year. These results underscore the positive impact of our enhanced payments platform, which has streamlined processes and improved overall collection efficiency.
Previous report
Hiring, training, and retaining qualified associates is critical to the Company’s success. The rate at which the Company adds new dealerships and is able to implement operating initiatives is limited by the number of trained managers and support personnel the Company has at its disposal. Excessive turnover, particularly at the dealership manager level, could impact the Company’s ability to add new dealerships and to meet operational initiatives. The landscape for hiring remains very competitive. The Company has continued to add resources to recruit, train, and develop personnel, especially personnel targeted to fill dealership manager positions. The Company expects to continue to invest in the development of its workforce.
Previous report
The Company continues to prioritize investments to improve its products and services and operate more efficiently over time. One of the Company’s largest recent investments has been improving its processes and technology for credit applications and decision-making through the new LOS. This online loan application system allows the consumer to apply for credit faster in anticipation of their vehicle purchase, authorize a soft credit pull during the application process, and receive a response via text message on the status of their application, as well as have access to centralized appointment setting. At the end of the third quarter, the Company had implemented the LOS in 127 of its 136 dealerships, with centralized decision-making on approvals of applications submitted via the online platform. The remaining nine dealerships, which were acquired, are still in their earn-out period or have yet to be integrated. Through the LOS, the Company has tightened its credit approval standards, primarily by requiring a higher down payment and shorter terms from certain customers.
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(Operating Statement Dollars in Thousands)
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Total revenues decreased $38.9 million, or 12%, for the three months ended January 31, 2026 compared to the same period in the prior year. The decrease was driven primarily by lower retail sales volumes, reflecting management's deliberate decision to operate with more disciplined inventory levels and moderate originations to align sales activity with available funding capacity as part of broader initiatives to reposition and strengthen the Company's capital structure. This deliberate reduction in sales volume, combined with continued affordability pressures impacting customers, resulted in lower sales revenue during the quarter. The decline in total revenues was partially offset by an increase in interest income, and an increase in the weighted average interest rate on outstanding finance receivables to 17.66% compared to 17.51% in the prior year period. In addition, the average retail sales price increased to $20,634 compared to $19,275 in the prior year quarter, providing a modest offset to the reduction in unit volumes.
Previous report
Cost of sales as a percentage of sales remained relatively consistent at 64.2% for the three months ended January 31, 2026 compared to 64.3% for the same period of the prior fiscal year, resulting in a gross margin as a percentage of sales of 35.8% for the current year period compared to 35.7% in the prior year period. The stability in gross margin percentage year-over-year reflects disciplined pricing strategies and improved gross profit per retail unit sold, which increased to $7,762 compared to $7,131 in the prior year period. These improvements were partially offset by lower overall sales volumes during the quarter. Overall, margin performance reflects continued focus on inventory management, vehicle sourcing discipline, and retail pricing optimization.
Previous report
Gross margin as a percentage of sales is significantly influenced by the average retail sales price of the vehicles the Company sells, which is largely driven by vehicle acquisition costs and includes the price of ancillary products such as the accident protection plan and vehicle service contract. As vehicle purchase costs increase or decrease, retail pricing typically adjusts accordingly in order to maintain appropriate per-unit profitability while continuing to offer affordable pricing to customers. For the third quarter of fiscal 2026, the average retail sales price, inclusive of ancillary products, was $20,634, an increase of $1,359, or 7.1%, compared to $19,275 in the prior-year quarter. Cost of sales increased proportionally on a per-unit basis, resulting in gross margin as a percentage of sales of 35.8%, compared to 35.7% in the prior-year quarter. The relatively consistent margin percentage reflects disciplined pricing and inventory management, as increases in retail pricing largely corresponded with higher vehicle acquisition and related costs.
Previous report
Selling, general and administrative (“SG&A”) expenses increased to 23.1% of sales for the three months ended January 31, 2026 compared to 17.6% of sales for the same period in the prior fiscal year. In absolute terms, SG&A expenses increased $5.0 million, to $51.5 million from $46.5 million in the prior year quarter. The increase in SG&A as a percentage of sales was primarily driven by lower overall sales volumes during the current quarter, resulting in reduced operating leverage. The year-over-year increase in SG&A expense dollars reflects continued investments in technology and infrastructure, higher compensation and benefit expense associated with strengthening the leadership team, and costs associated with dealership optimization activities. During the quarter, as part of a dealership optimization strategy, the Company closed and consolidated 18 dealership locations with nearby higher performing dealerships, resulting in certain one time impairment and other charges related to these closures.
Previous report
Provision for credit losses as a percentage of sales was 47.3% for the three months ended January 31, 2026 compared to 32.9% for the same period in the prior fiscal year. In absolute terms, the provision for credit losses increased $18.5 million, to $105.2 million in the third quarter of fiscal 2026 compared to $86.7 million in the prior-year quarter. The year-over-year increase was primarily driven by higher net charge-offs as a percentage of average finance receivables, which increased to 6.5% compared to 6.1% in the prior-year period, as well as higher reserve requirements which reflect updated expectations of lifetime credit losses based on recent portfolio performance and forward‑looking economic assumptions. The increase also reflects the continued seasoning and maturation of receivables, including those originated from acquired dealerships, as those accounts build loss history. Additionally, macroeconomic factors, including persistent inflationary pressures and continued affordability constraints impacting the Company’s customer base, contributed to elevated credit loss expectations relative to the prior-year quarter.
Previous report
Interest expense for the three months ended January 31, 2026 increased to 9.8% of sales compared to 6.4% of sales for the prior-year period. In dollar terms, interest expense increased $4.9 million, to $21.8 million from $16.9 million in the prior-year quarter. The increase in interest expense was primarily driven by higher average outstanding debt balances during the quarter, reflecting the Company’s revised capital structure and the addition of a new term loan facility during fiscal 2026. The increase in interest expense as a percentage of sales was further impacted by lower overall sales volumes.
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Nine Months Ended January 31, 2026 vs. Nine Months Ended January 31, 2025
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Consolidated Operations
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(Operating Statement Dollars in Thousands)
Previous report
Total revenues decreased $42.1 million, or 4.1%, for the nine months ended January 31, 2026 compared to the same period in the prior fiscal year. Sales revenue declined $51.3 million, or 6.1%, primarily due to a 9.4% decrease in retail units sold (37,480 units versus 41,373 units in the prior-year period). The reduction in unit volume reflects management’s ongoing efforts to reposition and strengthen the Company’s capital structure during fiscal 2026 by moderating originations and operating with disciplined inventory levels to align sales activity with available funding capacity. Continued affordability pressures impacting the Company’s customer base also contributed to lower sales volumes during the period. Partially offsetting the decline in unit volumes, the average retail sales price increased to $20,041 compared to $19,531 in the prior-year period, an increase of $510, or 2.6%. In addition, interest income increased
Previous report
$9.2 million, or 5.0%, driven by growth in the average finance receivable balance and an increase in the weighted average interest rate on outstanding finance receivables to 17.66% compared to 17.51% in the prior-year period.
Previous report
Cost of sales totaled $496.9 million, or 63.3% of sales, compared to $529.2 million, or 63.3% of sales, in the prior-year period. The consistent cost of sales percentage reflects disciplined inventory sourcing and retail pricing strategies, as changes in vehicle acquisition costs were generally reflected in retail pricing. As a result, gross margin as a percentage of sales remained stable year-over-year at 36.7% for the nine months ended January 31, 2026, consistent with 36.7% in the prior-year period. The consistent margin percentage reflects disciplined pricing and inventory management, as changes in vehicle acquisition and related costs were generally reflected in retail pricing throughout the period.
Previous report
SG&A expenses increased to 20.4% of sales for the nine months ended January 31, 2026 compared to 16.8% of sales for the same period in the prior fiscal year. In absolute terms, SG&A expenses increased $19.9 million, to $160.5 million from $140.6 million in the prior-year period. The increase in SG&A as a percentage of sales was primarily driven by lower overall sales volumes during fiscal 2026, The year-over-year increase in SG&A expense dollars reflects continued investments in technology and infrastructure, higher compensation and benefit expense associated with strengthening the leadership team in key functional areas, and costs associated with dealership optimization activities during the third quarter of fiscal year 2026.
Previous report
Provision for credit losses as a percentage of sales was 41.7% for the nine months ended January 31, 2026 compared to 33.7% for the same period in the prior fiscal year. In absolute terms, the provision for credit losses increased $45.7 million, to $327.3 million compared to $281.6 million in the prior-year period. The increase was primarily driven by higher net charge-offs as a percentage of average finance receivables during fiscal 2026, reflecting portfolio performance trends and continued seasoning of receivables. As receivables mature, particularly those originated during periods of portfolio growth and from acquired dealerships, additional loss history is established, impacting reserve requirements. The increase in provision also reflects macroeconomic factors, including persistent inflationary pressures and continued affordability constraints impacting the Company’s customer base, which contributed to elevated credit loss expectations relative to the prior-year.
Previous report
Interest expense for the nine months ended January 31, 2026 increased to 6.9% of sales compared to 6.4% of sales for the same period in the prior fiscal year. In dollar terms, interest expense increased $1.2 million, to $54.5 million from $53.3 million in the prior-year period. The increase in interest expense was primarily driven by higher average outstanding debt balances during fiscal 2026, reflecting the Company’s revised capital structure, including the addition of a term loan facility. The modest increase as a percentage of sales reflects the impact of this higher debt balance, partially offset by lower overall sales volumes during the period.
Previous report
Finance receivables, net decreased 5.6% compared to April 30, 2025. The decline reflects lower originations resulting from reduced retail unit sales during the nine-month period, as management aligned sales activity with available funding capacity as part of the Company’s capital structure repositioning efforts, as well as normal portfolio amortization and net charge-offs. Retail unit sales for the nine-month period decreased 9.4%, which reduced new loan originations and resulted in a smaller volume of receivables added to the portfolio. The effects of the lower originations were partially offset by increase in the average overall term length of the Company's installment sale contracts, and improvements made to the underwriting and collections procedures in an effort to improve the quality of the portfolio.
Previous report
During the first nine months of fiscal 2026, inventory decreased by $11.0 million, or 9.8%, compared to April 30, 2025. The decline reflects disciplined inventory management and moderated purchasing activity as the Company aligned vehicle acquisitions with available funding capacity as part of its capital structure repositioning efforts. Annualized inventory turns were approximately 5.4 times for both the current year third quarter and the prior year third quarter. The decrease in inventory turns reflects lower sales volumes during the period as well as management’s deliberate reduction in originations and inventory levels in connection with capital allocation priorities.
Previous report
Property and equipment, net, decreased by $7.7 million at January 31, 2026 as compared to April 30, 2025. The Company incurred $1.5 million in expenditures during the nine months ended January 31, 2026 primarily related to remodeling existing locations. These expenditures were offset by $6.3 million in depreciation expense and $2.8 million in impairment expense due to the dealership closures during the nine months ended January 31, 2026.
Previous report
Accounts payable and accrued liabilities decreased by $13.4 million at January 31, 2026 as compared to April 30, 2025, primarily due to payment timing and program changes. The decrease reflects recognition and capitalization during the period of accruals related to enterprise software implementation expenses, a credit card program change resulting in earlier settlement of payables, and purchase accruals consistent with current inventory purchasing and payment activity.
Previous report
Deferred revenue decreased by $13.0 million at January 31, 2026 compared to April 30, 2025. The decrease primarily reflects lower retail unit sales during the nine-month period, resulting in reduced amounts collected upfront related to ancillary products such as the accident protection plan and vehicle service contracts. The decline is consistent with moderated originations and lower overall sales activity during fiscal 2026.
Previous report
Deferred tax liabilities, net increased $29.9 million to $37.0 million as of January 31, 2026 compared to $7.1 million as of April 30, 2025, driven by the establishment of a $47.0 million non-cash valuation allowance against Colonial's net deferred tax assets. The valuation allowance eliminated the offsetting benefit of Colonial's deferred tax assets against the Company's consolidated deferred tax liabilities, shifting the consolidated balance sheet position from a net deferred tax asset to a net deferred tax liability. This charge is non-cash in nature and has no impact on the Company's current cash tax obligations or its ability to utilize Colonial's net operating loss carryforwards in future periods should sufficient taxable income be generated.
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Reworded paragraphs (21)
Previous wording
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address the Company’s future objectives, plans and goals, as well as the Company’s intent, beliefs and current expectations regarding future operating performance, and can generally be identified by words such as “may,” “will,” “should,” “could,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” and other similar words or phrases. Specific events addressed by these forward-looking statements may include, but are not limited to:
Current wording
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address the Company’s future events, objectives, plans and goals, as well as the Company’s intent, beliefs and current expectations regarding future operating performance and can generally be identified by words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” and other similar words or phrases. Specific events addressed by these forward-looking statements may include, but are not limited to:
Previous wording
•dealership optimization initiatives and the closing of existing dealerships;
Current wording
•the effects of the dealership optimization initiatives and the closing of existing dealerships;
Previous wording
These forward-looking statements are based on the Company’s current estimates and assumptions and involve various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not guarantees of future performance, and that actual results could differ materially from those projected in these forward-looking statements. Factors that may cause actual results to differ materially from the Company’s projections include those risks described elsewhere in this report and in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2025, as well as:
Current wording
These forward-looking statements are based on the Company’s current estimates and assumptions and involve various risks and uncertainties. As a result, you are cautioned that these forward-looking statements are not guarantees of future performance, and that actual results and events could differ materially from those projected in these forward-looking statements. Factors that may cause actual results and events to differ materially from the Company’s projections include those risks described elsewhere in this report and in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, 2026, as well as:
Previous wording
•general economic conditions in the markets in which the Company operates, including but not limited to fluctuations in gas prices, grocery prices and employment levels and inflationary pressure on operating costs;
Current wording
•general economic conditions in the markets in which the Company operates, including but not limited to fluctuations in gas prices, grocery prices and employment levels, inflationary pressure on operating costs and customers’ ability to make vehicle payments;
Previous wording
•the availability of quality used vehicles at prices that will be affordable to our customers, including the impacts of changes in new vehicle production and sales;
Current wording
•the availability of quality used vehicles at prices that will be affordable to the Company’s customers, including the impacts of changes in new vehicle production and sales, tariffs and trade restrictions on the automotive industry, and elevated wholesale vehicle costs;
Previous wording
•the availability of and access to capital through asset-backed securitization financings, warehouse credit facilities, or other debt or equity financing sources on terms acceptable to the Company, and any increase in the cost of capital, to support the Company’s business;
Current wording
•the availability of and access to capital through warehouse credit facilities, securitization financings or other debt or equity financing sources on terms acceptable to the Company, and any increase in the cost of capital, to support the Company’s business;
Previous wording
•the Company's ability to successfully remediate the material weakness in internal control over financial reporting and to design, implement, and maintain effective disclosure controls and procedures;
Current wording
•the Company’s ability to maintain effective internal control over financial reporting following the remediation of its previously identified material weakness, and to design, implement, and maintain effective disclosure controls and procedures;
Previous wording
America’s Car-Mart, Inc., a Texas corporation initially formed in 1981 (the “Company”), is one of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance” segment of the used car market. The Company’s operations are principally conducted through its two operating subsidiaries, America’s Car Mart, Inc., an Arkansas corporation (“Car-Mart of Arkansas”), and Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”). References to the Company include the Company’s consolidated subsidiaries. The Company primarily sells older model used vehicles and provides financing for substantially all of its customers. Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit difficulties. As of January 31, 2026, the Company operated 136 dealerships located primarily in small cities throughout the South-Central United States. During the third quarter of fiscal 2026, the Company began implementation of a footprint optimization strategy through which it consolidated eighteen of its dealership locations with nearby higher performing dealerships.
Current wording
segment of the used car market. The Company’s operations are principally conducted through its two operating subsidiaries, America’s Car Mart, Inc., an Arkansas corporation (“Car-Mart of Arkansas”), and Colonial Auto Finance, Inc., an Arkansas corporation (“Colonial”). References to the Company include the Company’s consolidated subsidiaries. The Company primarily sells older model used vehicles and provides financing for substantially all of its customers. Many of the Company’s customers have limited financial resources and would not qualify for conventional financing as a result of limited credit histories or past credit difficulties. As of July 31, 2026, the Company operated 94 dealerships located primarily in small cities throughout the South-Central United States.
Previous wording
The following table sets forth the major balance sheet accounts of the Company as of the dates specified (in thousands):
Current wording
The following table sets forth the major balance sheet accounts of the Company as of the dates specified:
Previous wording
The following table sets forth certain summarized historical information with respect to the Company’s Condensed Consolidated Statements of Cash Flows (in thousands):
Current wording
The following table sets forth certain summarized historical information with respect to the Company’s Condensed Consolidated Statements of Cash Flows:
Previous wording
The primary drivers of operating profits and cash flows include (i) top line sales (ii) interest income on finance receivables, (iii) gross margin percentages on vehicle sales, and (iv) credit losses, a significant portion of which relates to the collection of principal on finance receivables. Historically, most or all of the cash generated from operations has been used to fund finance receivables growth, capital expenditures, and as applicable, common stock repurchases. To the extent finance receivables growth, capital expenditures and common stock repurchases have exceeded income from operations, the Company has increased borrowing under its debt facilities and secured additional funding through the issuance of asset-backed non-recourse notes.
Current wording
The primary drivers of the Company’s operating results and cash flows are (i) sales volume, (ii) interest income on finance receivables, (iii) gross margin on vehicle sales, and (iv) credit losses, a significant portion of which relates to the collection of principal on finance receivables. Historically, most or all of the cash generated from operations has been used to fund growth in finance receivables, capital expenditures, and, when applicable, common stock repurchases, with any excess of these uses over cash from operations funded through borrowings under revolving credit facilities and the issuance of asset-backed non-recourse notes.
Previous wording
The purchase price the Company pays for a vehicle has a significant effect on liquidity and capital resources, as selling prices are directly tied to acquisition costs. Higher purchase costs generally require higher selling prices, which can make it more difficult to maintain gross margin percentages and contract terms in line with historical results, given customers’ limited incomes and the need to keep payments affordable. Several external factors influence vehicle acquisition costs. Reduced volumes of new car sales, particularly domestic brands, constrain supply in the used car market, while broader economic downturns may also affect auction and wholesaler activity. Sustained macro-economic pressures affecting our customers have helped keep demand high in recent years for the types of vehicles the Company purchases. This strong demand for used vehicles, coupled with modest levels of new vehicle sales in recent years, has led to a generally ongoing tight supply of used vehicles available to the Company in both quality and quantity. In addition, recently imposed tariffs on the automotive industry have added approximately $560 per vehicle to procurement costs since the beginning of the year. Although procurement costs have stabilized in the near term, future tariffs, trade restrictions, or declines in new car sales could create uncertainty, which may exacerbate challenges related to sourcing inventory or increase the cost of vehicles. The Company expects that the tight supply of used vehicles, strong used vehicle demand, and market reactions to ongoing tariff uncertainty will continue to keep purchase costs and resulting sales prices elevated in the short term.
Current wording
The purchase price the Company pays for a vehicle has a significant effect on its liquidity and capital resources, as selling prices are largely tied to acquisition costs. Higher purchase costs generally require higher selling prices, which can make it more difficult to maintain gross margin percentages and contract terms consistent with historical results, given customers’ limited incomes and the need to keep payments affordable. During the three months ended July 31, 2026, the effect of vehicle acquisition costs on liquidity continued to be magnified by the Company’s constrained access to origination capital. Because each vehicle purchased consumes a greater share of the Company’s available capital, higher per-unit costs further limit the volume of vehicles the Company can purchase, finance, and carry in inventory, contributing to the reduction in finance receivable originations and retail units sold during the quarter. Several external factors influence acquisition costs, including reduced volumes of new car sales—particularly of domestic brands—which constrain used-vehicle supply, and broader economic conditions, which affect auction and wholesale activity. Tariffs imposed on the automotive industry have also increased procurement costs, and future tariffs, trade restrictions, or declines in new car sales could further increase vehicle costs or make sourcing more difficult. The Company expects tight used-vehicle supply, elevated demand for the types of vehicles the Company sells, and ongoing tariff uncertainty to keep purchase costs, and resulting sales prices, elevated in the near term.
Previous wording
The Company’s liquidity and operating capital is also influenced by its credit losses. Macro-economic factors, such as unemployment rates and general inflation affecting both core and discretionary items, can significantly impact collection results and, consequently, credit losses. At present, as customers face rising costs for non-discretionary items like childcare, insurance, groceries, and gasoline, their ability to meet vehicle payment obligations may be strained. To mitigate these risks, the Company has implemented several process improvements, including the introduction of the LOS over the past two years, which strengthens controls and provides a more robust infrastructure to support collections. The Company also launched an upgraded payments platform, which has begun facilitating a shift from in-store to online payments and should support more consistent payment behavior. Management remains focused on enhancing execution at the dealership level, particularly in terms of individualized customer engagement related to collection matters.
Current wording
The Company’s liquidity and operating capital are also influenced by its credit losses. Macroeconomic factors, such as unemployment and general inflation affecting both essential and discretionary goods, can significantly affect collection results and, consequently, credit losses. As customers continue to face rising costs for non-discretionary items such as childcare, insurance, groceries, and fuel, their ability to meet vehicle payment obligations may be strained. To mitigate these risks, the Company has continued to make refinements to its underwriting standards to improve the credit quality of new originations and has enhanced its collections infrastructure, including an upgraded payments platform that offers customers multiple payment options and has facilitated a shift toward online payments. The Company completed its transition to a centralized collections model during the first quarter of fiscal year 2027; the model is designed to improve consistency and efficiency while preserving individualized, dealership-level customer engagement.
Previous wording
The Company's cash from operations and liquidity are further impacted by the Company's operating lease commitments. The Company’s business model relies on leasing the majority of the properties where its dealerships are located. As of January 31, 2026, the Company leased approximately 84% of its dealership properties. The $75.1 million of operating lease commitments includes $49.7 million of non-cancelable lease commitments under the lease terms and $25.3 million of lease commitments for renewal periods at the Company’s option that are reasonably assured. The Company expects to continue to lease the majority of the properties where its dealerships are located.
Current wording
The Company’s business model relies on leasing the majority of the properties where its dealerships are located. As of July 31, 2026, the Company leased approximately 83% of its dealership properties. The $59.0 million of operating lease commitments includes $32.2 million of non-cancelable lease commitments under the lease terms and $26.8 million of lease commitments for renewal periods at the Company’s option that are reasonably assured. The Company expects to continue to lease the majority of the properties where its dealerships are located.
Previous wording
The Company has three standby letters of credit relating to insurance policies totaling $8.8 million at January 31, 2026.
Current wording
The Company has three standby letters of credit relating to insurance policies totaling $5.1 million at July 31, 2026.
Previous wording
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States of America requires the Company to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the Company’s estimates. The Company believes the most significant estimate made in the preparation of the Consolidated Financial Statements in Item 1 relates to the determination of its allowance for credit losses, which is discussed below. The Company’s accounting policies are discussed in Note B to the Consolidated Financial Statements in Item 1.
Current wording
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States of America requires the Company to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the Company’s estimates. The Company believes the most significant estimate made in the preparation of the Condensed Consolidated Financial Statements in Item 1 relates to the determination of its allowance for credit losses, which is discussed below. The Company’s accounting policies are discussed in Note C to the Condensed Consolidated Financial Statements in Item 1.
Previous wording
The Company maintains an allowance for credit losses on an aggregate basis at a level it considers sufficient to cover estimated losses expected to be incurred on the portfolio at the measurement date in the collection of its finance receivables currently outstanding. At January 31, 2026, the weighted average contract term was 48.8 months with 35.4 months remaining. At January 31, 2025, the weighted average total contract term was 48.3 months with 35.7 months remaining. The allowance for credit losses at January 31, 2026, $347.6 million, was 25.53% of the principal balance in finance receivables of $1.5 billion, less unearned accident protection plan ("APP") revenue of $47.1 million, unearned service contract revenue of $53.1 million, and pending APP claims of $5.4 million. The Company increased the allowance for credit losses as a percentage of finance receivables from 24.31% at January 31, 2025 to 25.53% at January 31, 2026 and increased it from 23.25% at April 30, 2025.
Current wording
The Company maintains an allowance for credit losses on an aggregate basis at a level it considers sufficient to cover estimated losses expected to be incurred on the portfolio at the measurement date in the collection of its finance receivables currently outstanding. At July 31, 2026, the weighted average contract term was 49.3 months with 33.8 months remaining. At July 31, 2025, the weighted average total contract term was 48.3 months with 35.7 months remaining. The allowance for credit losses at July 31, 2026, $277.0 million, was 24.74% of the principal balance in finance receivables of $1.2 billion, less unearned accident protection plan revenue of $34.0 million, unearned service contract revenue of $32.8 million, and pending APP claims of $4.8 million. The Company increased the allowance for credit losses as a percentage of finance receivables from 23.35% at July 31, 2025 to 24.74% at July 31, 2026 and decreased it slightly from 25.15% at April 30, 2026.
Previous wording
Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its consolidated financial statements upon adoption.
Current wording
Occasionally, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies which the Company will adopt as of the specified effective date. Unless otherwise discussed, the Company believes the implementation of recently issued standards which are not yet effective will not have a material impact on its Condensed Consolidated Financial Statements upon adoption.
Previous wording
In October 2023, the FASB issued an accounting pronouncement (ASU 2023-06) related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification (“Codification”). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission’s (“SEC”) regulations and facilitate the application of GAAP for all entities. The effective date for each amendment is the date on which the SEC removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We do not expect this update to have a material impact on our consolidated financial statements.
Current wording
In October 2023, the FASB issued an accounting pronouncement (ASU 2023-06) related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification (“Codification”). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission’s (“SEC”) regulations and facilitate the application of GAAP for all entities. The effective date for each amendment is the date on which the SEC removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We do not expect this update to have a material impact on our Condensed Consolidated Financial Statements.
Previous wording
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires public business entities to provide enhanced disclosures of certain natural expense categories within relevant income statement captions. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its financial statement disclosures.
Current wording
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires public business entities to provide enhanced disclosures of certain natural expense categories within relevant income statement captions. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company expects additional disclosures to be included in the Company’s Consolidated Financial Statements once the standard is adopted.
Previous wording
Historically, the Company’s third fiscal quarter (November through January) has been the slowest period for vehicle sales. Conversely, the Company’s first and fourth fiscal quarters (May through July and February through April)
Current wording
Historically, the Company’s third fiscal quarter (November through January) has been the slowest period for vehicle sales. Conversely, the Company’s first and fourth fiscal quarters (May through July and February through April) have historically been the busiest times for vehicle sales. Therefore, the Company has generally realized a higher proportion of its revenue and operating profit during the first and fourth fiscal quarters. However, the Company’s current capital and liquidity constraints, including the curtailment of vehicle inventory purchases and finance receivable originations, had a significant adverse effect on the Company’s operating results for the first quarter of fiscal 2027. Unless and until the Company’s liquidity position improves and inventory purchases and contract originations return to normalized levels, seasonal trends may not be a reliable indicator of future performance, as the Company’s capital constraints may continue to reduce or override the effect of historical seasonal patterns on the Company’s revenue and operating results.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
America’s Car-Mart, Inc., a Texas corporation initially formed in 1981 (the “Company”), is one of the largest publicly held automotive retailers in the United States focused exclusively on the “Integrated Auto Sales and Finance”
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
have historically been the busiest times for vehicle sales. Therefore, the Company generally realizes a higher proportion of its revenue and operating profit during the first and fourth fiscal quarters. The Company expects this pattern to continue in future years.