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Mar 29
CarParts.com Q1 2025 Earnings Report
CarParts.com reported a decrease in sales and a wider net loss in Q1 2025, as gross margin compressed and marketing costs increased.
Key Takeaways
CarParts.com faced a challenging Q1 2025 with net sales declining to $147.4 million and a net loss widening to $15.3 million. The company cited higher marketing spend and increased outbound freight costs as primary contributors to the lower profitability.
Revenue declined 11% year-over-year due to soft consumer demand and weather impacts.
Gross margin compressed to 32.1%, down from 32.4% last year, due to increased freight costs.
Net loss widened to $15.3 million from $6.5 million in the prior year quarter.
Adjusted EBITDA turned negative at -$6.2 million, impacted by competitive pressure in performance marketing.
CarParts.com
CarParts.com
Forward Guidance
The company did not provide formal guidance for 2025 due to ongoing evaluation of strategic alternatives.
Positive Outlook
- Double-digit year-over-year revenue growth early in Q2
- Sequentially lower marketing spend in early Q2
- Record levels of repeat customers, app traffic, and high-margin fee income
- Increased focus on wholesale and commercial opportunities
- Shift toward higher margin sales and customer lifetime value
Challenges Ahead
- Significant pressure from gross margin compression
- High customer acquisition costs impacted profitability
- Ongoing soft consumer demand
- Inclement weather affected Q1 sales
- No formal 2025 guidance due to strategic uncertainty