America's Car-Mart reports Q3 profit rise

Auto retailer America's Car-Mart Inc. reported a 7.6 percent rise in its fiscal third-quarter profit Tuesday, as consumers turned to the used car market as tighter credit requirements restricted them from securing financing for a new vehicle.

Bentonville, Ark.-based Car-Mart reported earnings of $3.6 million, or 31 cents a share, for the quarter ended Jan. 31, compared with $3.4 million, or 28 cents a share, for the comparable quarter in 2008.

Revenue was up 3.3 percent to $73.5 million in the quarter from $71.1 million for the comparable quarter a year earlier. Same-store sales _ or sales for stores open at least one year _ rose 2.9 percent.

Car-Mart, founded in 1981, operates 92 automotive dealerships in eight states focused exclusively on the buy here/pay here segment of the used car market.

The company saw an increase in the number of people with accounts more than 30-day past due in the quarter. Car-Mart said it expected those delinquencies to drop as customer receive tax refunds.

"While almost all other consumer lenders have restricted the flow of credit and are experiencing historically high credit losses and delinquencies, Car-Mart is able to extend credit to our ever-expanding customer base," said Chairman T.J. Falgout, III. "At the same time, we have kept our credit losses within acceptable historical ranges and have also shown consistent improvement in that key area."

Shares of Car-Mart rose 5.5 percent, or 54 cents, to $10.40 in midday trading Tuesday.