CarParts.com Reports Significant Financial Challenges, Net Loss of $10M in Q3 2024

CarParts.com, Inc. reported significant financial challenges in its latest 10-Q filing for the thirteen and thirty-nine weeks ended September 28, 2024. The company experienced a notable decline in net sales, with revenues of $144.8 million for Q3 2024, down 13.3% from $166.9 million in Q3 2023. Year-to-date sales also fell by 12.3%, totaling $455.3 million compared to $519.3 million in the prior year. This decrease in revenue is attributed to deliberate price increases, a challenging consumer environment, and one-time impacts from external events.

Gross profit for Q3 2024 was $51.0 million, reflecting a 7.0% decrease from $54.8 million in Q3 2023. Despite the drop in gross profit, the gross margin improved to 35.2%, up 230 basis points from the previous year, indicating better cost management in relation to sales. However, the company reported a loss from operations of $9.9 million for Q3 2024, compared to a loss of $2.9 million in Q3 2023. The net loss for the quarter was $10.0 million, significantly higher than the $2.5 million loss reported in the same period last year.

For the thirty-nine weeks ended September 28, 2024, the net loss reached $25.2 million, compared to a loss of $2.1 million for the same period in 2023. The company’s operating expenses increased by 5.5% in Q3 2024, primarily due to heightened marketing expenditures. Additionally, net cash provided by operating activities decreased sharply to $8.5 million from $57.9 million in the prior year.

On the balance sheet, total assets decreased to $227.6 million as of September 28, 2024, down from $257.9 million at the end of 2023. Total liabilities also fell to $130.4 million, resulting in total stockholders’ equity of $97.2 million, a decline from $112.8 million at the end of 2023.

Strategically, CarParts.com has initiated a lease for a new distribution center in Las Vegas, expected to enhance logistics and reduce transportation costs. The company is also focusing on optimizing its supply chain and investing in technology to drive customer acquisition. However, it faces ongoing challenges, including increased competition from larger online marketplaces and potential delisting from Nasdaq due to stock price volatility.

The company’s financial outlook remains cautious, with management indicating that existing cash and cash equivalents, along with available debt financing, should suffice to meet operational needs for at least the next twelve months.