America's Car-Mart Inc (NASDAQ:CRMT) Q2 2020 Earnings Conference Call - Final Transcript

Nov 19, 2019 • 11:00 am ET

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America's Car-Mart Inc (NASDAQ:CRMT) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

At this time the participants will now answer questions from the callers. I would like to reiterate that my earlier comments regarding forward-looking statements apply both to the participants' prepared remarks and to anything that may came [Phonetic] up during the Q&A.

[Operator Instructions]

Our first question is from John Murphy from Bank of America. Your line is now open.

Analyst
Yarden Amsalem

Good morning, guys. This is Yarden Amsalem on for John. The first question on the cost side. SG&A to gross has been getting incrementally better in recent quarters and it was very strong in 2Q as well. Can you maybe talk a little more about the specific actions you are taking there and where do you see that number growing to over time? Do you think about the mid-to-high 50s is kind of the limit or can it get even potentially better over time?

Executive
Jeffrey A. Williams

Well, we certainly feel like the topline can continue to grow at a healthy rate. So that's going to help with that ratio. And then in addition to that, we do expect to continue to see some improvements on the credit loss line. We're working hard, we're running the play at a higher level and our operations team focused on collection is doing good work. So we would expect to continue to see some good improvements in that ratio.

Analyst
Yarden Amsalem

And -- thank you for that. And can you just remind us what percentage of your SG&A is fixed versus variable?

Executive
Jeffrey A. Williams

Most all of our SG&A is going to be fixed. I think a large -- majority of our cost are salaries are benefit related, but almost all of our costs are fixed in nature. So incremental volumes are extremely important to us.

Analyst
Yarden Amsalem

Okay, got it. Thank you. And then, can you maybe give us some details on the sales cadence through the quarter? Was it kind of an even growth throughout or were there any particular month that was stronger or weaker than other?

Executive
Jeffrey A. Williams

No it was a pretty solid quarter, pretty consistent between months.

Analyst
Yarden Amsalem

Okay, thank you. That's all from my end.

Executive
Jeffrey A. Williams

Thank you.

Operator
Operator

Thank you. Our next question is from Hugh Miller from Buckingham. Your line is now open.

Analyst
Hugh Miller

Hi, thanks for taking my questions. And just on the sales side, following up on the prior question, as we think about kind of the change in unit volume growth over the past couple of quarters versus seeing a nice improvement and rebound this quarter, can you just give us a little bit more as to kind of what the bigger drivers of that are? Are you seeing benefits from the online credit app or the digital inventory? I think you referenced kind of the quality of inventory and any success you're having just on the education of the consumers on the total cost of ownership? If you could just provide a little bit more color on, maybe are you seeing any of those being more drivers than others and your thoughts there?

Executive
Jeffrey A. Williams

Yeah, it's a