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What factors drove the changes in CarParts.com's revenue and profit?

- **Strategic Investment Success**: $35.7M partnership driving logistics efficiency and $50M+ A Premium revenue growth.
- **Profitability Focus**: 12% YoY revenue decline offset by 300+ basis point margin improvement, targeting 2026 free cash flow breakeven.
- **Operational Resilience**: 33.1% gross margin with Zongteng logistics cost savings and A Premium partnership scalability.
- **Risk Management**: Tariff environment mitigation through diversified sourcing and dynamic pricing, maintaining 50%+ pre-freight margins.
- **Growth Drivers**: Mobile app adoption (13% e-commerce sales) and fee-based income expansion ($4M annualized), positioning for long-term profitability.


**【CEO Opening Remarks】**
- Announced a $35.7 million strategic investment from A Premium, Zongteng Group, and CDH Investments to enhance logistics, product assortment, and operational efficiency.
- Highlighted partnerships with Zongteng Group (global logistics network integration) and A Premium (100,000+ SKUs added to mechanical parts assortment).
- Q3 revenue $127.8M (-12% YoY), with focus on profitable growth through reduced ad spend (17.7% to 12.5% of gross sales).
- Targeting free cash flow breakeven in 2026 through cost optimization and strategic partnerships.

**【CFO Financial Commentary】**
- GAAP net loss $11M, driven by strategic ad spend reduction and inventory management.
- Gross margin 33.1%, with 300+ basis point improvement in contribution margin (Q1 to Q3).
- EBITDA loss $2.2M, reflecting operational restructuring and fixed cost reductions.
- Cash position $36M, with no revolver debt and disciplined inventory management.
- Mobile app revenue growth to 13% of e-commerce sales, fee-based income $4M annualized.
- 2026 free cash flow positive outlook with A Premium partnership ($50M+ incremental revenue).

**【Strategic Initiatives】**
- Zongteng logistics network integration reduces capital expenditure, improving fulfillment efficiency.
- A Premium collaboration expands mechanical parts assortment with minimal capital outlay.
- CDH operational expertise enhances governance and strategic execution.
- Tariff mitigation strategies (20% China-sourced products) through dynamic pricing and diversification.
- 100 million annual website visits, 1 million app users, and 8,000+ CarParts.plus members.
- 2026 free cash flow breakeven target with disciplined P&L management.


CarParts.com, Inc.(PRTS)-20251111-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PRTS

PRTS fundamentals

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