CarParts.com(PRTS) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenues of $147.4 million, down 11% from $166.3 million in the prior year, primarily due to inclement weather and softer consumer demand [15] - Gross profit for the quarter was $47.3 million, down 12% compared to the prior year, with a gross profit margin of 32.1%, slightly down from 32.4% [15] - GAAP net loss for the quarter was $15.3 million, compared to a loss of $6.5 million in the prior year, driven by lower gross margins and higher marketing costs [16] - Adjusted EBITDA loss was $6.2 million, down from adjusted EBITDA of $1.1 million in the prior year, primarily due to soft consumer demand and increased competitive pressure [16] Business Line Data and Key Metrics Changes - The company experienced gross margin compression and increased advertising spend, which put significant pressure on profitability in the first quarter [8] - The wholesale side onboarded over 700 new commercial customers, targeting collision shops and mechanics in key markets [11] Market Data and Key Metrics Changes - The first two months of 2025 saw soft consumer demand and bad weather affecting performance [7] - Increased cost per click rates on search engines were noted, attributed to the growth of AI models taking share from traditional search [7] Company Strategy and Development Direction - The company is focused on upgrading its customer base to higher income and less price-sensitive customers, diversifying its acquisition mix [8] - Strategic initiatives include scaling and optimizing the vertically integrated supply chain, investing in a proprietary catalog, and enhancing the mobile app experience [12][14] - The company aims to capture opportunities in the $400 billion auto parts market while maintaining a strong balance sheet and managing cash flow [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in the first quarter but highlighted significant progress in key areas that position the company well for future growth [15] - The company is confident that improvements made over the last eighteen months will lead to long-term sustainable positive net income and adjusted EBITDA [19] Other Important Information - The company has proactively invested in inventory ahead of tariffs to improve supply chain continuity, resulting in about two extra weeks of stock [17] - The inventory balance was $94 million at quarter end, compared to $90 million at the end of the previous year [18] Q&A Session Summary - No specific Q&A session content was provided in the transcript, indicating that the call did not take questions beyond the prepared remarks [4]