CarParts.com(US:PRTS)2025-05-13 22:02Financial Data and Key Metrics Changes - In the first quarter, the company reported revenues of $147.4 million, down 11% from $166.3 million last year, primarily due to inclement weather and softer consumer demand [16] - 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% [16] - 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 [17] - 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 [17] - The company ended the quarter with $38.5 million in cash and no revolver debt, generating $300,000 in interest income [17] Business Line Data and Key Metrics Changes - The company has onboarded over 700 new commercial customers in the wholesale segment, targeting collision shops and mechanics [11] - The collision parts account for approximately two-thirds of purchases, primarily sourced from Taiwan, which is not subject to high tariffs imposed on products from China [13] Market Data and Key Metrics Changes - The company experienced a significant increase in cost per click rates on search engines, attributed to the growth of AI models taking market share from traditional search [7] - Selling prices for parts online fell as retailers attempted to capture demand, impacting overall profitability [7] Company Strategy and Development Direction - The company is focused on upgrading its customer base to include higher income and less price-sensitive customers, diversifying its acquisition mix [9] - Strategic initiatives include scaling and optimizing the vertically integrated supply chain, investing in a proprietary fitment-based catalog, and enhancing the mobile app experience [12][14] - The company aims to capture opportunities in the $400 billion auto parts market, emphasizing the importance of a strong balance sheet and cash flow management [20] Management's Comments on Operating Environment and Future Outlook - Management noted soft consumer demand and adverse weather conditions impacted performance in the first quarter, but expressed confidence in the foundation laid over the past 18 months for long-term sustainable profitability [19] - The company is committed to navigating a dynamic macroeconomic environment, including tariffs and volatile prices, while focusing on growth and profitability [11][19] Other Important Information - The company is proactively investing in inventory ahead of tariffs to improve supply chain continuity, resulting in about two extra weeks of stock [17] - The mobile app is projected to reach 1 million users and currently accounts for over 10% of e-commerce revenue, contributing to a long-term reduction in customer acquisition costs [14] Q&A Session Summary Question: What are the company's strategic alternatives? - Management stated that they would not take questions related to the strategic alternatives process beyond what was announced on March 5, indicating that the process is ongoing with oversight from the Board of Directors [4] Question: How is the company addressing tariff impacts? - Management discussed various actions to mitigate tariff impacts, including pre-buying inventory, seeking cost concessions from vendors, and optimizing supply chain and operating expenses [6]