CarParts.com First Quarter 2025 Results Show Decline in Revenue and Increased Losses

CarParts.com Reports First Quarter 2025 Results

On May 13, 2025, CarParts.com, Inc. (NASDAQ: PRTS), a key player in the eCommerce market for automotive parts and accessories, released its financial results for the first quarter that ended on March 29, 2025.

Financial Overview

In this quarter, CarParts.com experienced a decrease in net sales, which fell by 11% to $147.4 million compared to $166.3 million during the same period last year. This decline was influenced by several factors, including reduced consumer demand, unfavorable weather conditions, and ongoing supply chain pressures particularly affecting the lighting and mirror product areas.

The gross profit for the quarter amounted to $47.3 million, down from $53.9 million in the previous year. Gross margin also faced a slight contraction, settling at 32.1%, a decrease of 30 basis points from the previous year, mainly attributed to escalated outbound freight costs.

In terms of expenses, total operating costs were reported at $62.5 million, representing an increase from $60.4 million during the same quarter in 2024. This rise in expenses primarily stemmed from higher marketing costs due to increased efforts to acquire new customers amidst a challenging economic landscape.

One of the notable adverse developments during this quarter was the net loss, which ballooned to $15.3 million or $0.27 per share, a stark contrast to last year's loss of $6.5 million or $0.11 per share. The adjusted EBITDA also reflected a negative trend, falling to ($6.2) million, down from a positive $1.1 million during the same timeframe in 2024.

Leadership Insights

David Meniane, CEO of CarParts.com, commented on the results, stating, “In the first quarter, our top line and operating expenses were in line with our expectations, but the gross margin compression coupled with rising advertising expenditures have considerably pressured our profitability. It is essential for us to upgrade our customer base with individuals who have higher incomes and are less price-sensitive, while also diversifying our customer acquisition approach.”

He further elaborated that despite the pressures observed, the company was able to generate double-digit revenue increases year-over-year for the first six weeks of the second quarter with a decrease in marketing expenditures. The emphasis is now on retaining current customers, increasing mobile app traffic, and generating high-margin income from various services.

Future Outlook

Looking ahead, CarParts.com is evaluating strategic alternatives due to recent interest, which means they will not be offering concrete guidance for the remainder of 2025. Meniane’s insights highlighted a commitment to adjusting business strategies centered around enhancing customer lifetime value through their mobile app, targeting high-margin sales, and exploring wholesaling opportunities to improve profitability.

Closing Remarks

As of March 29, 2025, CarParts.com had a cash balance of $38.5 million with no revolving debt, positioning the company well to navigate through the current economic challenges. The upcoming conference call, scheduled for later today, will provide further insights into these results and future strategies.

In conclusion, while the first quarter of 2025 presented challenges for CarParts.com, leadership's focus on innovation and strategic realignment suggests a proactive approach to navigating these hurdles and achieving long-term growth. The commitment to customer-centric services and diversified offerings remains a core element in their strategy moving forward.