What Happened?
Shares of used-car retailer America’s Car-Mart (NASDAQ: CRMT) fell 18.7% in the afternoon session after the company reported weak fourth-quarter 2025 results, missing analyst expectations for both revenue and earnings.
The auto retailer posted a non-GAAP loss of $7.72 per share, significantly wider than the analyst consensus estimate of a $0.26 loss. Revenue for the period fell 11.6% from the previous year to $286.8 million, also falling short of forecasts. The weak sales were driven by a steep 13.4% decline in same-store sales, which measures performance at established locations. Profitability also deteriorated significantly, with the company's operating margin swinging from a positive 6.6% in the same quarter last year to a negative 4.5%. Overall, the report pointed to shrinking demand and rising costs, leading investors to sell off the stock.
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What Is The Market Telling Us
America's Car-Mart’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. But moves this big are rare even for America's Car-Mart and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 13 days ago when the stock dropped 7.5% on the news that the release of a stronger-than-expected Producer Price Index (PPI) for January, fueled concerns about inflation and its impact on consumer spending.
The U.S. Bureau of Labor Statistics reported that the PPI, a measure of wholesale prices, rose 0.5% in January, exceeding economists' expectations. A significant driver of this increase was a 0.8% advance in the index for final demand services. Specifically, the data showed a sharp 2.5% jump in margins for trade services, which reflects the profits received by wholesalers and retailers. This suggests that businesses are passing on higher costs, potentially including import tariffs, to customers. With recent data also showing a rise in consumer loan delinquencies, investors are worried that already-stretched households will cut back on discretionary purchases, negatively affecting companies tied to consumer spending.
America's Car-Mart is down 36.3% since the beginning of the year, and at $15.48 per share, it is trading 75.1% below its 52-week high of $62.05 from July 2025. Investors who bought $1,000 worth of America's Car-Mart’s shares 5 years ago would now be looking at an investment worth $94.84.
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