U.S. markets close in 4 hours 44 minutes
  • S&P 500

    3,830.64
    +1.30 (+0.03%)
     
  • Dow 30

    31,150.66
    -251.35 (-0.80%)
     
  • Nasdaq

    13,220.76
    +101.33 (+0.77%)
     
  • Russell 2000

    2,191.84
    -8.33 (-0.38%)
     
  • Crude Oil

    62.54
    -0.99 (-1.56%)
     
  • Gold

    1,729.90
    -45.50 (-2.56%)
     
  • Silver

    26.55
    -1.14 (-4.10%)
     
  • EUR/USD

    1.2120
    -0.0066 (-0.55%)
     
  • 10-Yr Bond

    1.5000
    -0.0180 (-1.19%)
     
  • GBP/USD

    1.3945
    -0.0068 (-0.48%)
     
  • USD/JPY

    106.6310
    +0.4010 (+0.38%)
     
  • BTC-USD

    47,845.88
    -3,252.88 (-6.37%)
     
  • CMC Crypto 200

    959.22
    +26.09 (+2.80%)
     
  • FTSE 100

    6,487.68
    -164.28 (-2.47%)
     
  • Nikkei 225

    28,966.01
    -1,202.26 (-3.99%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Carparts.com sees 300% increase in site traffic in 2020

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Yahoo Finance’s Alexis Christoforous and David Meniane, Carparts.com CFO, discuss growth amid the pandemic.

Video Transcript

ALEXIS CHRISTOFOROUS: Shares of Carparts.com have been revving up. If you've been taking a look at the stock, over the past two years, it is up 1,300%. And just recently, Carparts.com launched a marketplace for electric vehicles, hybrids, and plug-in hybrids.

Joining us now is the company's CFO, David Meniane. David, good to see you. Quite a nice chart there. I know the stock's getting caught up a little bit today and the overall selling. But this is exciting news about now entering Carparts for the EV market. Tell me what you had to do to sort of transition in your inventory and your business for that.

DAVID MENIANE: It's good to see you, Alexis. And thanks for having me. Yeah, Carparts.com/ev is our new initiative. We think that the car park is going to get electrified over the next few decades. And the companies that will win over the long term are the companies making the investments now to create a community for EV drivers, and specifically for us to buy the parts, the tools, and get the information that they need to get back on the road.

ALEXIS CHRISTOFOROUS: So this means you're going to have now parts available for more than 25 popular vehicle makers-- Tesla, Toyota, Honda. What did that do from a cost perspective on your part to have to get those parts and house those parts for these cars? Because relative to regular combustion engine cars, there aren't a lot of them out on the road.

DAVID MENIANE: That is correct. And I think that's also a misconception about our business. There is an overlap of about 90% in terms of the categories that we carry that go for both combustion engine and EVs. So if you think about lights or mirrors or bumpers or brakes or shocks, all of that goes into a Tesla the same way it goes into a Ford F-150 truck.

ALEXIS CHRISTOFOROUS: OK, wow, I didn't know that. All right. So is this going to move the needle at all for company performance in the next few quarters, the fact that now you've entered parts for the EV market?

DAVID MENIANE: Yeah, I think this is more of a long-term investment. And the way we run the business is we don't really run a business quarter-to-quarter. We have more of a long-term view. We're owners first. And we think that, again, the companies that make the investments now will benefit in the future.

Our sweet spot is 8 to 12-year-old vehicles. So the first Tesla came out I think in 2010 or 2011. So as these cars continue to age, then the sweet spot, then it becomes our sweet spot. And there's an opportunity for us to sell more replacement parts.

ALEXIS CHRISTOFOROUS: Yeah, speaking of sweet spots, 2020 was a pretty incredible year for the company during a very challenging time for the world, right? I mean, there were some industries, like hotel and leisure and restaurants, that were decimated, but your industry quite different. Talk to us about how the consumer has been acting when it comes to cars and car parts throughout the pandemic. And what has that meant to your business?

DAVID MENIANE: Yeah, definitely quite different. The pandemic has been tough on everyone. But what it did for our industry is that it accelerated a trend of offline to online. So if you think about other industries, like furniture or mattresses or pet food, a big percentage of the purchases are made online.

Now, historically for auto parts, that's not the case. People still buy auto parts today the same way they used to buy them in the '70s. And what we're doing is disrupting that space.

ALEXIS CHRISTOFOROUS: I also understand that you hired 800 people during the pandemic. First off, is that accurate? And how are you able to bring that many people on? And what are they doing for you?

DAVID MENIANE: Yeah, that is 100% accurate. We had to scale the business very quickly to keep up with the demand. And so we made a lot of investments in the business last year. And 2020-- 2019, a lot of investments. 2020 was no exception.

So we hired people for technology, marketing, data and catalog, data science, and, of course, our distribution centers. So we just opened a distribution center in Grand Prairie, Texas. So two years ago, we had two distribution centers. And today we have five. So the brand new one is in Texas, in the Dallas area. And we hired close to 200 people already.

ALEXIS CHRISTOFOROUS: Wow, that is really impressive. But I'm sure you've heard the talk, and this is nothing new, people talking about the stock perhaps being in a bubble. I mean, when you see it up more than 1,300% in just the past couple of years, do you, as CFO, look at the day-to-day gyrations of the stock price? And what would you say to people who are concerned that Carparts.com is in a bubble right now?

DAVID MENIANE: Right, so I don't think it's in a bubble. If you look at the highest estimate on the Street for next year I think has us at about $500 million in sales. So we're trading around 1.5 times the highest consensus estimate. If you look at other industries, Wayfair, Chewy, the multiples are significantly higher. I think there's still a lot of opportunity for the Street to realize what we're doing with the business.

Again, we have a long-term view. It's a $400 billion market, grossly, grossly under-penetrated. And what we're doing no one is doing.

And that's reflected in our performance. We are the fastest-growing website in the space. And we are growing three to five times faster than any of our competitors.

ALEXIS CHRISTOFOROUS: So what do you do with all that growth? I mean, are you perhaps in the market to partner with others, maybe to even buy up smaller competitors? Do you see that being a focus of the company in the next year or two?

DAVID MENIANE: I think the focus of the company for the next couple of years is just to keep doing what we've been doing over the last two years. So focus on the mission, which is to help drivers get back on the road. Focus on scaling that corporate culture of excellence, of discipline, getting the most talented people to help us scale the business. And number three is really keep investing in our supply chain so we can get closer to the customer.

For us, the vision is being able to cover 90% of the country within one day. And the way we do that is by getting closer and closer to the customer. That means more distribution centers, faster SLAs, faster delivery times, so that we can become the number one alternative to walking into a brick-and-mortar location. And you can get the same parts for a lower price delivered straight to your door.

ALEXIS CHRISTOFOROUS: I'm sure you saw the news that GM becoming one of the first major automakers to put a timeline on when it wants to go completely electric, saying that by 2035, it wants its complete fleet to be EV. What does that mean for your company? It looks as though you're already planting the seeds, now carrying parts for the EV market. But how might that change what Carparts.com does?

DAVID MENIANE: It's not going to change because we're already doing it. What you have to remember is that aftermarket and our sweet spot is usually 8 to 12 years behind, because we target a fleet that is older. So for us, if GE is going to be full EV in 2035, 8 to 12 years later for GE parts, that's what we're going to be doing. But again, from a data and catalog standpoint, user experience, pictures, creating, that online community, it starts today.

ALEXIS CHRISTOFOROUS: All right. And it has certainly been an incredible ride for the company and the stock. David Meniane, CFO of Carparts.com, thank you.

DAVID MENIANE: Thanks, Alexis.