CarParts.com(US:PRTS)2023-03-08 00:21Financial Data and Key Metrics Changes - The company reported a net loss of $6.2 million for the fourth quarter and $1 million for the full year 2022, primarily due to non-cash expenses and higher seasonal freight charges [5] - Adjusted EBITDA for Q4 was $2.1 million, down from $2.6 million, while for the full year 2022, adjusted EBITDA was $26.1 million, up 55.5% from 2021 [6][5] - Cash and equivalents at the end of the quarter were $18.8 million, with no balance on the revolving credit line, and inventory decreased to $136 million from $138.9 million year-over-year [7] Business Line Data and Key Metrics Changes - Revenue for Q4 2022 was $154.5 million, an increase of 11.8% year-over-year, and for the full year, revenue was $661.6 million, up 13.6% from 2021 [24][38] - Gross profit for Q4 was $51.6 million, up 8.9%, with a gross margin of 33.4%, while for the full year, gross profit was $230.9 million, up 17%, with gross margins improving to 34.9% [25][24] Market Data and Key Metrics Changes - The company experienced high single-digit year-over-year revenue growth in the first eight weeks of fiscal year 2023, along with sequential gross margin expansion [24] - Repeat customers accounted for over one-third of e-commerce revenues, indicating a strong customer retention strategy [28] Company Strategy and Development Direction - The company aims to focus on outstanding customer service, operational excellence, financial discipline, and innovation to drive growth [44] - For 2023 and beyond, the company plans to maintain a customer-centric strategy while leveraging its vertically integrated supply chain and advanced capabilities [10][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow mid-single digits to high single digits, with potential for double-digit growth if the economy improves [26] - The management acknowledged the current macroeconomic uncertainty but emphasized the company's strong position to capitalize on market opportunities [26] Other Important Information - The company has undergone significant changes in its executive team and operational processes, which are expected to enhance efficiency and profitability [15][42] - The introduction of the "Do-It-For-Me" service has doubled bookings, indicating positive customer feedback and potential for future growth [20][49] Q&A Session Summary Question: Can you provide high-level thoughts on revenue growth for 2023? - Management indicated that while visibility is limited due to the macro environment, they expect to grow mid-single digits to high single digits, with potential for double-digit growth if conditions improve [30][26] Question: How has improving supply chain affected fourth quarter sales and profitability? - Management noted that improvements in the supply chain would positively impact landed costs, but benefits may not be fully realized until the latter half of the year [45] Question: What impact has the weather had on business? - Management stated that significant weather disruptions can slow demand temporarily, but historically, they have not seen a major long-term impact on sales [58] Question: What is the right inventory level for the business? - Management indicated that the current inventory level is appropriate and expected to remain stable throughout fiscal year 2023, with fluctuations expected quarter-to-quarter [59]