CarParts.com Q2 2025: Unpacking Contradictions on Tariffs, Performance Gains, and Strategic Direction

Tariff exposure and import sources, performance improvement initiatives, and strategic alternatives process are the key contradictions discussed in CarParts.com's latest 2025Q2 earnings call.



Strategic Alternatives and Shareholder Value:
- CarParts.com is exploring strategic alternatives to maximize shareholder value, with a process nearing completion.
- The company is evaluating multiple transaction structures, including potential sale or strategic investments, aiming to strengthen capabilities and unlock new growth opportunities.

Tariff Exposure and Management:
- Approximately 20% of CarParts.com's private label products are imported from China, with the remainder from Taiwan and other countries.
- The company is mitigating tariff impact through cost concessions, dynamic pricing adjustments, and supply chain optimization to maintain competitive pricing for customers.

Improved Financial Performance:
- The company reported revenue of $151.9 million for the second quarter, up 5% from the previous year.
- The growth was driven by increased e-commerce and offline channels, despite softness in the marketplace segment and pressure from tariffs and inflation.

E-commerce and Mobile App Growth:
- Mobile app and retention-driven e-commerce revenue reached record levels, with the mobile app now having over 1 million users and accounting for 12% of e-commerce revenues.
- This growth is attributed to stronger engagement from loyal customers and investments in machine learning-based search algorithms.

Operational Efficiency and Cost Reduction:
- CarParts.com is closing its Virginia facility and streamlining corporate headcount, resulting in approximately $10 million in annualized cost savings.
- These actions are part of a broader strategy to realign the cost structure in response to macroeconomic pressures and align operational fixed costs with volume.