Core Insights - The partnership with A-Premium is a key strategic element for the company, currently achieving a $35 million annual revenue run rate with a clear path to $50 million and potential to exceed $100 million without inventory or working capital burdens [1][6]. Financial Performance - In Q4, net sales decreased by 10% to $120.4 million, while gross margin improved to 33.2% and adjusted EBITDA loss narrowed to $2.2 million, attributed to warehouse consolidation and improved marketing efficiency [5][16]. - For the full year, net sales were $547.5 million, down 7% from the previous year, with gross profit declining to $179.3 million [13][14]. - The company reported a GAAP net loss of $11.6 million for Q4, an improvement from $15.4 million in the prior year, while the full-year net loss was $50.4 million [15]. Operational Improvements - The company has undergone a full cost structure reset and revamped its operating model, resulting in four consecutive quarters of improvement in contribution margin, fixed operating expenses, and adjusted EBITDA [3][7]. - Significant operational actions included warehouse consolidation and a shift to third-party business process outsourcing, which reduced fixed overhead and improved variable economics [8][10]. Marketing and Customer Engagement - Marketing efficiency improved significantly, with a nearly 300 basis point increase in efficiency from Q1 to Q4, focusing on high-intent customers and reducing spending on unprofitable transactions [11]. - The mobile app has become a significant revenue driver, with app-driven revenue increasing to over 13% of e-commerce revenue in Q4 2025, up from 7.8% in the previous year [18]. Future Outlook - The company aims to achieve free cash flow positivity by 2026, driven by contribution margin expansion and the benefits of cost actions [19]. - Management expects a continued shift towards higher contribution margin revenue streams with lower working capital requirements [21].

Core Viewpoint - The conference call for CarParts.com focuses on the financial performance and strategic initiatives of the company for the fourth quarter of 2025, with key executives presenting insights and updates [2][3]. Financial Disclosures - The call includes forward-looking statements that may differ from actual results due to various risks and uncertainties, with a reference to the company's annual and quarterly reports for detailed risk factors [3]. - Both GAAP and non-GAAP financial measures will be discussed, with reconciliations provided in the press release issued on the same day [4].

Financial Data and Key Metrics Changes - In Q4 2025, net sales were $120.4 million, down 10% from $133.5 million in the prior year [11] - For the full year, net sales totaled $547.5 million, a decrease of 7% from $588.8 million in 2024 [11] - Gross profit for Q4 was $39.9 million, down 8% year-over-year, with a gross margin of 33.2%, up 70 basis points from the previous year [12] - GAAP net loss for Q4 was $11.6 million, an improvement from a loss of $15.4 million in the prior year [12] - Adjusted EBITDA loss for Q4 narrowed to $2.2 million from $6.8 million year-over-year [13] - Total operating expenses for Q4 were $51.2 million, down from $58.9 million in the prior year [13] Business Line Data and Key Metrics Changes - The A-Premium partnership is projected to reach a $50 million annual revenue run rate shortly, with potential to exceed $100 million [4] - Collision-focused business accounted for approximately 68% of revenue in Q4, remaining flat year-over-year [18] - Private label products represented about 83% of revenue in Q4, slightly down from 83% in the prior year [18] Market Data and Key Metrics Changes - Owned channels, including e-commerce and mobile app, represented approximately 68% of revenue in Q4, up from 63% in 2024 [18] - Marketplaces accounted for 32% of revenue in Q4, compared to 33% for the full year [18] Company Strategy and Development Direction - The company has shifted focus towards profitability and cash generation rather than unprofitable volume [6] - A full cost structure reset was completed in 2025, with significant operational changes to improve efficiency [6] - The strategy emphasizes operational resilience, diversified sourcing, and asset-light partnerships [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the new operating model, indicating progress towards profitability goals [5] - The company is targeting free cash flow positive results in 2026, driven by contribution margin expansion and cost actions [16] - Management noted that the path to free cash flow does not rely on a sharp rebound in demand [10] Other Important Information - The company completed a $35.7 million strategic investment in September 2025 [16] - Tariffs on auto parts remain a concern, with approximately 20% of sourcing from China [17] Q&A Session Summary - No specific questions or answers were provided in the content, thus this section is not applicable.

Financial Data and Key Metrics Changes - In Q4 2025, net sales were $120.4 million, down 10% from $133.5 million in the prior year [11] - For the full year, net sales totaled $547.5 million, a decrease of 7% from $588.8 million in 2024 [11] - Gross profit for Q4 was $39.9 million, down 8% year-over-year, with a gross margin of 33.2%, up 70 basis points from 32.5% [12] - GAAP net loss for Q4 was $11.6 million, an improvement from a loss of $15.4 million in the prior year [12] - Adjusted EBITDA loss narrowed to $2.2 million in Q4 from $6.8 million in the prior year [13] - Total operating expenses for Q4 were $51.2 million, down from $58.9 million in the prior year [13] Business Line Data and Key Metrics Changes - The A-Premium partnership is projected to reach a $50 million annual revenue run rate shortly, with potential to exceed $100 million [4] - Collision-focused business accounted for roughly 2/3 of revenue, while mechanical parts have slower inventory turns and higher working capital requirements [5] - Private label products represented approximately 83% of revenue in Q4, while third-party branded products accounted for 17% [17] Market Data and Key Metrics Changes - Owned channels, including e-commerce and mobile app, represented approximately 68% of revenue in Q4, with marketplaces accounting for 32% [18] - The company sources approximately 20% of its products from China, with tariffs impacting costs [17] Company Strategy and Development Direction - The company has shifted its focus towards profitability and cash generation rather than unprofitable volume [6] - Operational actions taken in 2025 included consolidating operations and reducing fixed overhead, which are expected to drive free cash flow [7] - The strategy emphasizes operational resilience, diversified sourcing, and asset-light partnerships [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the new operating model, indicating progress towards profitability goals [5] - The path to free cash flow is not reliant on a sharp demand rebound but on higher contribution margins and improved capital efficiency [10] - Management acknowledged the evolving tariff environment and its potential impact on sourcing costs [17] Other Important Information - The company completed a $35.7 million strategic investment in September 2025 [16] - The transition to a more flexible variable operating model is expected to enhance cost structure and efficiency [7] Q&A Session Summary - No specific questions or answers were provided in the content, indicating that the call concluded without a Q&A segment [20]

Financial Data and Key Metrics Changes - In Q4 2025, net sales were $120.4 million, down 10% from $133.5 million in the prior year [12] - For the full year, net sales totaled $547.5 million, a decrease of 7% from $588.8 million in 2024 [12] - Gross profit for Q4 was $39.9 million, down 8% year-over-year, with a gross margin of 33.2%, up 70 basis points from 32.5% [12][13] - GAAP net loss for Q4 was $11.6 million, an improvement from a loss of $15.4 million in the prior year [13] - Adjusted EBITDA loss narrowed to $2.2 million in Q4 from $6.8 million in the prior year [14] - Total operating expenses for Q4 were $51.2 million, down from $58.9 million in the prior year [14] Business Line Data and Key Metrics Changes - The A-Premium partnership is projected to reach a $50 million annual revenue run rate shortly, with potential to exceed $100 million [4] - Collision-focused business accounted for approximately 68% of revenue in Q4, remaining flat year-over-year [18] - Private label products represented approximately 83% of revenue in Q4, slightly down from 83% in the prior year [17][18] Market Data and Key Metrics Changes - Owned channels, including e-commerce and mobile app, represented approximately 68% of revenue in Q4, up from 63% in 2024 [18] - Marketplaces accounted for 32% of revenue in Q4, compared to 33% for the full year [18] Company Strategy and Development Direction - The company has shifted focus towards profitability and cash generation rather than unprofitable volume [6] - Significant operational changes were made in 2025, including cost structure adjustments and advertising spend optimization [6][19] - The strategy emphasizes operational resilience, diversified sourcing, and asset-light partnerships [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the new operating model, indicating progress towards profitability goals [5] - The path to free cash flow is not reliant on a sharp demand rebound but on higher contribution margins and improved capital efficiency [10] - The company is targeting free cash flow positive results in 2026, driven by partnership scale and cost actions [16] Other Important Information - The company completed a $35.7 million strategic investment in 2025 [4] - Tariffs on auto parts remain a concern, with approximately 20% of sourcing from China [17] Q&A Session Summary Question: What are the expectations for future profitability? - Management highlighted that the focus is on execution and consistent cash generation, with evidence of operational progress reflected in improved Adjusted EBITDA and gross margins [19]

Financial Performance - For fiscal year 2025, the company reported net sales of $547,525, a decrease of 7.0% from $588,846 in fiscal year 2024[224]. - The company incurred a net loss of $50,443 in fiscal year 2025, compared to a net loss of $40,601 in fiscal year 2024[224]. - Adjusted EBITDA for fiscal year 2025 was $(14,008), worsening from $(7,055) in fiscal year 2024[224]. - Gross profit decreased by 8.8% to $179,348, with gross margin declining by 60 basis points to 32.8% in fiscal year 2025[225]. - Total expenses increased in fiscal year 2025 compared to fiscal year 2024, primarily driven by cost of sales and operating expenses[226]. - Operating expenses decreased by $9,151, or 3.9%, for fiscal year 2025 compared to fiscal year 2024, primarily due to favorable payroll costs and marketing spend[244]. - Total other (expense) income, net, decreased by $1,507, or 500.7%, for fiscal year 2025 compared to fiscal year 2024, mainly due to increased interest expense and decreased interest income[245]. - Income tax provision increased by $95, or 35.6%, for fiscal year 2025 compared to fiscal year 2024[246]. Cash Flow and Debt - Cash and cash equivalents decreased by $10,576, from $36,397 as of December 28, 2024, to $25,821 as of January 3, 2026[251]. - Net cash used in operating activities was $(34,076) for fiscal year 2025, a decrease from $10,338 in fiscal year 2024[253]. - Net cash provided by financing activities was $31,397 for fiscal year 2025, compared to $(4,422) for fiscal year 2024, primarily due to the issuance of Convertible Notes[256]. - Total debt increased to $34,010 as of January 3, 2026, from $12,313 as of December 28, 2024[257]. - The company issued Convertible Notes with an aggregate principal amount of $25,000, accruing interest at 2% per annum, with a maturity date of September 10, 2028[258]. - The Amended Credit Facility provides for a revolving commitment of $25,000, down from $75,000, and matures on September 8, 2026[259]. Asset Management and Impairment - The company maintained a valuation allowance of $55,405 against deferred tax assets as of January 3, 2026, due to cumulative losses in recent years[249]. - The company recognized an impairment charge of $3,690 on its long-lived assets for the year ended January 3, 2026, resulting in an impairment loss recorded in operating expense[274]. - No impairment loss was recorded during the year ended December 28, 2024[274]. - The fair value of the asset group was estimated to be less than its carrying amount, leading to the recognition of an impairment loss[274]. - The impairment loss was allocated to the long-lived assets' carrying values on a pro rata basis[274]. Market Conditions and Opportunities - The average age of U.S. light vehicles reached a record high of 12.8 years in 2025, indicating a growing demand for aftermarket parts[220]. - The U.S. Auto Care Association projects that online sales of auto parts and accessories will exceed $27 billion by 2028, highlighting a significant market opportunity[223]. - The company offers approximately 1,660,000 SKUs, providing a comprehensive selection for consumers[219]. Risk Management - The company is exposed to market risks, including interest rate changes and foreign currency fluctuations, in the ordinary course of business[275]. - A hypothetical 100 basis point change in interest rates would not materially affect the company's interest expense and cash flows[276]. - Purchases of auto parts from Asian suppliers are denominated in U.S. dollars, mitigating direct foreign currency risk[278]. - A hypothetical 10% change in foreign currency exchange rates would not have a material impact on the company's consolidated financial statements[279]. - The company does not currently use derivative financial instruments to manage foreign currency risk but may consider doing so in the future[279].

Financial Performance - Fiscal Year 2025 net sales were $547.5 million, a decrease of 7% from $588.8 million in Fiscal Year 2024[9] - Gross profit for Fiscal Year 2025 was $179.3 million, down from $196.7 million, with a gross margin decrease of 60 basis points to 32.8%[9] - In Q4 2025, net sales were $120.4 million, a 10% decline year-over-year[13] - Q4 2025 gross profit was $39.9 million, compared to $43.4 million, with gross margin increasing 70 basis points to 33.2%[13] - Adjusted EBITDA for Fiscal Year 2025 was ($14.0) million, worsening from ($7.1) million in Fiscal Year 2024[11] - The company reported a net loss of ($50.4) million for Fiscal Year 2025, compared to a net loss of ($40.6) million in Fiscal Year 2024[11] - Net sales for the fiscal year ended January 3, 2026, were $547.53 million, a decrease of 7% compared to $588.85 million for the fiscal year ended December 28, 2024[29] - The net loss for the fiscal year ended January 3, 2026, was $50.44 million, compared to a net loss of $40.60 million for the fiscal year ended December 28, 2024, representing a 24% increase in losses[29] - Adjusted EBITDA for the fiscal year ended January 3, 2026, was $(14.01) million, worsening from $(7.06) million in the previous year[29] Cash and Liabilities - Cash balance as of January 3, 2026, was $25.8 million, down from $36.4 million at the end of the previous fiscal year[12] - Cash and cash equivalents decreased to $25.82 million as of January 3, 2026, down from $36.40 million at the end of the previous fiscal year[31] - Total current liabilities increased to $81.24 million as of January 3, 2026, compared to $90.42 million at the end of the previous fiscal year[31] Operating Expenses - Total operating expenses in Fiscal Year 2025 were $228.2 million, a decrease from $237.4 million in Fiscal Year 2024[10] - Operating expenses decreased to $228.22 million for the fiscal year ended January 3, 2026, from $237.37 million in the prior year, reflecting a reduction in costs[29] Asset Impairments and Losses - The company incurred $3.69 million in impairment losses on long-lived assets during the fiscal year ended January 3, 2026[33] - The company recorded a loss of $393,000 on early lease termination related to the closure of its Virginia distribution center in the third quarter of 2025[26] Shareholder Information - The weighted-average common shares outstanding increased to 61.20 million for the fiscal year ended January 3, 2026, compared to 57.03 million in the previous year[29] Mobile App Performance - The mobile app's cumulative net downloads reached 1.3 million, with retention channel revenue increasing from 6.7% to over 10% of eCommerce revenue[6][7] - A-Premium partnership is projected to reach a $50 million annual revenue run rate in the near term, with potential to exceed $100 million[4]

Core Insights - CarParts.com reported a net loss of $50.4 million for fiscal year 2025, compared to a net loss of $40.6 million in fiscal year 2024, indicating a decline in financial performance [1][3] - The company experienced a 7% decrease in net sales, totaling $547.5 million in fiscal year 2025, down from $588.8 million in fiscal year 2024 [1][3] - Adjusted EBITDA for fiscal year 2025 was ($14.0) million, worsening from ($7.1) million in the previous year, reflecting ongoing operational challenges [1][3] Fiscal Year 2025 Summary - Net sales decreased by 7% to $547.5 million from $588.8 million in fiscal year 2024 [1][3] - Gross profit was $179.3 million, down from $196.7 million, with a gross margin of 32.8%, a decrease of 60 basis points [1][3] - Total operating expenses reduced to $228.2 million from $237.4 million, primarily due to lower payroll costs and marketing spend [1][3] Fourth Quarter 2025 Summary - Net sales for Q4 2025 were $120.4 million, a 10% decrease from the same quarter in the previous year [1][3] - Gross profit in Q4 was $39.9 million, with a gross margin of 33.2%, an increase of 70 basis points year-over-year [1][3] - Adjusted EBITDA improved to ($2.2) million in Q4 from ($6.8) million in the prior year, indicating operational improvements [1][3] Management Commentary - The CEO highlighted a strategic investment of $35.7 million and a reset of the cost structure, leading to improved operating results [1] - The partnership with A-Premium is projected to reach a $50 million annual revenue run rate, with potential to exceed $100 million [1] - The company emphasized that its path to free cash flow is driven by higher contribution margins and lower fixed costs, rather than a rebound in demand [1]

Core Viewpoint - CarParts.com, Inc. is set to hold a conference call on March 5, 2026, to discuss its financial results for the fourth quarter and fiscal year ending January 3, 2026, indicating a focus on transparency and investor engagement [1]. Company Overview - CarParts.com, Inc. is a technology-led ecommerce company that offers over 1.5 million quality automotive parts and accessories, operating for over 25 years [1]. - The company emphasizes a customer-first approach, providing a seamless, mobile-friendly shopping experience through its website and app [1]. - CarParts.com operates a nationwide distribution network, ensuring fast shipping and experienced customer service, aiming to alleviate the stress associated with vehicle maintenance and repair [1]. - The company manages a portfolio of private-label and marketplace brands, including CarParts Wholesale, JC Whitney, Garage-Pro, and Evan Fischer [1]. Conference Call Details - The conference call will be hosted by CEO David Meniane and Interim CFO Mark DiSiena, available via an audio webcast [1]. - A press release detailing the financial results will be issued prior to the call, ensuring that investors have access to relevant information [1]. - The live webcast can be accessed on the company's investor relations page, with a replay available afterward [1].

Core Insights - Lean Solutions Group has been selected by CarParts.com to enhance business operations in Manila, marking a significant milestone in Lean Solutions Group's growth and expansion [1][4] - The multi-year agreement includes comprehensive business services across various functions such as Complex Order Processing, Finance and Accounting, Marketing, and Back Office operations, utilizing Lean Solutions Group's AI technology platform, LeanTek [2][4] Company Overview - Lean Solutions Group is a next-generation solutions provider that integrates AI-driven automation and industry expertise, serving over 600 clients across multiple industries with more than 10,000 employees in six countries [5] - CarParts.com is a technology-led ecommerce company offering over 1 million automotive parts and accessories, focusing on a customer-first approach and seamless shopping experience [6] Strategic Implications - The partnership allows CarParts.com to leverage advanced AI technology while enhancing its U.S. distribution network and global supply chain [3] - Lean Solutions Group's AI-first approach is validated through this engagement, which is expected to deliver immediate efficiency gains and long-term competitive advantages for CarParts.com [3][4]