• Revenue: $144.8 million, down 13% from $166.9 million last year.

• Gross Margin: 35.2%, up from 32.9% in the prior year period.

• Net Loss: $10 million, compared to a net loss of $2.5 million in the prior year period.

• Adjusted EBITDA Loss: $1.2 million, down from adjusted EBITDA of $3 million in the prior year period.

• Cash Position: $38 million with no debt.

• Inventory Balance: $97 million at quarter end.

• Pre-Freight Margins: Increased to 54.6% from 50.8% in the prior year quarter.

• Freight Costs: Approximately 19.3% of sales.

• Interest Income: $345,000 in the third quarter.

• Revenue Guidance for 2024: Lowered to $595 million to $600 million.

• Gross Margin Guidance for 2024: Narrowed to 33% to 34%.

• Warning! GuruFocus has detected 4 Warning Signs with PRTS.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CarParts.com Inc (NASDAQ:PRTS) reported an increase in pre-freight margins to 54.6% in the third quarter, up from 50.8% in the prior year, driven by lower input costs and strategic pricing.

• The company successfully re-platformed its website to a cloud-based infrastructure, enabling faster rollout of new features and improvements in order patterns, conversion, and basket size.

• CarParts.com Inc (NASDAQ:PRTS) launched several strategic initiatives, including a partnership with Simple Tire and a new VIN lookup feature, both showing higher than anticipated usage rates.

• The company expanded its marketplace presence by launching an eBay store in Canada and piloting a program with Amazon, both showing positive early results.

• CarParts.com Inc (NASDAQ:PRTS) ended the quarter with a strong cash position of $38 million and no debt, supporting its business plan and future growth initiatives.

Negative Points

• Revenues for the third quarter were down 13% year-over-year, primarily due to deliberate price increases and challenging consumer environments.

• The company reported a GAAP net loss of $10 million for the quarter, compared to a net loss of $2.5 million in the prior year period, driven by increased marketing spend and lower net revenue.

• Freight costs remained a significant headwind, accounting for approximately 19.3% of sales, impacting overall profitability.

• Operating expenses were higher than expected, with $2.2 million attributed to expenses outside of normal operations, including brand awareness and marketing investments.

• The company lowered its full-year revenue guidance by $5 million due to unexpected impacts from hurricanes, indicating potential ongoing challenges in affected regions.