CarParts.com Inc (PRTS) Reports Record Q3 Sales Amid Operational Challenges
CarParts.com Inc (NASDAQ:PRTS) reported its highest third-quarter sales in company history, with net sales reaching $166.9 million, a 1% increase YoY.
The company's gross profit decreased by 2% to $54.8 million, with gross margin decreasing by 120 basis points to 32.9% due to higher outbound transportation costs and a shift in product mix.
Total operating expenses increased to $57.7 million, primarily driven by investments in the business and higher advertising expense.
The company reported a net loss of $2.5 million, compared to a net loss of $0.9 million in the year-ago quarter.
CarParts.com Inc (NASDAQ:PRTS), a leading eCommerce provider of automotive parts and accessories, released its earnings report for the third quarter ended September 30, 2023, on October 30, 2023. The company reported its highest third-quarter sales in its history, marking the 15th consecutive quarter of year-over-year growth. However, increased operating expenses and a shift in product mix led to a net loss for the quarter.
Financial Highlights
Net sales for the third quarter of 2023 were $166.9 million, up 1% from the year-ago quarter. Despite the increase in sales, gross profit decreased by 2% to $54.8 million compared to $56.1 million in the year-ago quarter. The decrease in gross margin to 32.9% was primarily driven by higher outbound transportation costs and a shift in product mix.
Total operating expenses for the quarter were $57.7 million, up from $56.7 million in the year-ago quarter. The increase was primarily driven by investments in the business and higher advertising expense, partially offset by a decrease in fulfillment expense due to an improvement in distribution center fulfillment costs.
The company reported a net loss of $2.5 million for the quarter, compared to a net loss of $0.9 million in the year-ago quarter. Adjusted EBITDA for the quarter was $3.0 million, down from $6.3 million in the year-ago quarter.
Management Commentary
At CarParts.com, we put the customer at the center of everything we do. Focusing on strategic priorities that we believe are making our company significantly more valuable and will benefit our stakeholders for years to come, said David Meniane, CEO of CarParts.com. Today we reported our 15th consecutive quarter of year-over-year growth with $167 million in revenue, up 17% on a two-year stack. We generated strong unit growth and Im proud of the results despite a softening consumer environment. We believe that as consumer confidence rebounds, we will be well positioned to support them with the parts and resources they need.
Financial Outlook
As of September 30, 2023, CarParts.com Inc (NASDAQ:PRTS) had a cash balance of $66.7 million and no revolver debt, compared to no revolver debt and a $18.8 million cash balance at the prior fiscal year-end December 31, 2022. The company continues to focus on strategic priorities to drive growth and create value for its stakeholders.
About CarParts.com Inc (NASDAQ:PRTS)
CarParts.com Inc (NASDAQ:PRTS) is a leading eCommerce provider of automotive parts and accessories. The company's easy-to-use, mobile-friendly website and app allow drivers to access quality parts and services without the guesswork typically associated with car repair or the added expense of brick-and-mortar stores. CarParts.com Inc (NASDAQ:PRTS) is headquartered in Torrance, California.
Explore the complete 8-K earnings release (here) from CarParts.com Inc for further details.
This article first appeared on GuruFocus.
