PRTS profits name for the duration finishing December 31, 2024.
Symbol supply: The Motley Idiot.
CarParts.com (PRTS -7.34%)This fall 2024 Income CallMar 25, 2025, 5:00 p.m. ET
Contents:
Ready Remarks Questions and Solutions Name Individuals
Ready Remarks:
Operator
Just right afternoon. Presently, all members will probably be in a listen-only mode. Please notice, this name is being recorded. I might now love to cross the convention over to our host, Tina Mirfarsi, senior vice chairman of world communications and logo.
Please cross forward.
Tina Mirfarsi — Vice President, World Communications and Tradition
Hi, everybody, and thanks for becoming a member of us for the CarParts.com fourth quarter and monetary year-end 2024 convention name. Becoming a member of me as of late are David Meniane, leader govt officer; and Ryan Lockwood, leader monetary officer. Sooner than I flip it over to David to start out the decision, I’ve some essential disclosures. The ready remarks may just comprise sure forward-looking statements associated with the trade below the federal securities regulations.
Exact effects might fluctuate materially from the ones contained in or implied via those forward-looking statements because of dangers and uncertainties related to the trade. For a dialogue of the fabric dangers and different essential elements that would have an effect on effects, please consult with the CarParts.com annual record on Shape 10-Okay and quarterly record on Shape 10-Q, each and every as filed with the SEC. Either one of which can also be discovered on our investor members of the family web page. At the name, each GAAP and non-GAAP monetary measures will probably be mentioned.
A reconciliation of GAAP to non-GAAP monetary measures is equipped within the CarParts.com press unencumber issued as of late. With that, I might now like to show the decision over to David.
David Meniane — Leader Govt Officer
Thanks, Tina, and thank you, everybody, for becoming a member of us as of late. On the outset, let me say that as of late, we don’t seem to be going to remark or take questions associated with our strategic possible choices procedure past what we introduced on March fifth. That procedure is being overseen via our board of administrators with the help of monetary and felony advisors. 2024 was once crucial yr within the ongoing transformation of CarParts.com.
We started the yr via refocusing our technique on 3 key parts: primary, riding enlargement and internet margin to fortify monetary efficiency; quantity two, accelerating potency and effectiveness to briefly ship stepped forward profitability; and quantity 3, reaching sustainable enlargement with robust long-term unfastened money drift. The commercial atmosphere was once difficult for lower-income shoppers for all of 2024, resulting in a vital pullback in spending and deferral of prices like auto maintenance. We confronted significant value compression within the first a part of 2024 and noticed promoting costs stabilize in the second one part. Moreover, our lighting fixtures and mirrors trade was once below really extensive drive because of low charge noncompliant unlawful portions imported from China flooding the marketplace.
Consequently, we labored diligently to realign our trade via increasing our product providing to draw a broader client base, repricing our merchandise to focus on higher-margin gross sales, including high-margin price revenue, rising buyer lifetime worth with our cellular app, and lengthening our focal point on B2B and different business alternatives. Those movements resulted in a complete yr 2024 revenues of $589 million, moderately underneath expectancies. Then again, gross benefit of $197 million and gross benefit margin of 33.4% for the yr was once close to the higher finish of steerage. 2024 was once a change and funding yr as we glance to improve our buyer base and alter the long-term margin profile and unit economics of the trade.
We recently depend on promoting portions immediately to cost-conscious shoppers by way of dear paid seek and feature skilled further margin pressures from emerging outbound transportation prices. Via specializing in refining our buyer combine, optimizing acquisition methods, and mitigating charge will increase, we intention to ship larger worth to our consumers and safe sustainable enlargement for the trade. To handle those pressures, we’re prioritizing a number of nonpaid advertising tasks, akin to bettering our website conversion, and strengthening our SEO, along riding cellular app adoption, producing high-margin price revenue, increasing our product collection, and rising our wholesale channel. We consider those efforts will place us to extend our internet benefit margin and power long-term enlargement.
Sooner than overlaying our monetary effects, I need to take a second and recap what we have now constructed over the past two years. Primary, we have now scaled and optimized our vertically built-in provide chain with tightly managed in-house features, together with sourcing, stock forecasting, inbound logistics, industry compliance, achievement, and opposite logistics, resulting in a beautiful product margin within the mid-50s p.c. Quantity two, we proceed to enlarge our national direct to client achievement community and will duvet 98% of the inhabitants with two-day delivery. Now we have a singular skill to maintain each conveyable and nonconveyable merchandise with capability for scale.
This contains our just lately opened semi-automated facility in Las Vegas with 200,000 sq. ft of house this is now totally operational and processing 25% of our corporate’s quantity. Quantity 3, we endured making an investment in our fitment-based proprietary catalog that took two decades to construct and serves a complete collection throughout collision, mechanical, non-public label, and branded merchandise, being able to construct customized units and kits. As of late, our catalog comprises 83,000 non-public label SKUs, 1.5 million top class branded SKUs, and continues to develop each and every yr. Quantity 4, we proceed to be the second-largest importer of o.e.m collision portions in the US and the sector’s No.
1 dealer on eBay Motors. As a reminder, our collision portions are essentially sourced from Taiwan and account for about two-thirds of our purchases that don’t seem to be recently topic to the excessive price lists imposed on merchandise made in China. Quantity 5, we proceed to optimize our stock throughout our achievement community, which was once at $90 million at year-end. As mentioned in prior calls, our mixed pre-freight product margin exceeds 50%, which makes this stock considerably extra treasured at retail costs, particularly in an inflationary atmosphere.
Quantity six, we totally replatformed our CarParts.com web page with a best-in-class, mobile-first, fit-specific person enjoy, which generates 100 million annual visits and serves 10 million consumers with a brand new seek, product suggestions and price revenue features. Our greatest-in-class cellular app, with over 800,000 customers in not up to 18 months, now accounts for over 10% of e-commerce income and rising, whilst taking into account a long-term trade in our paid as opposed to nonpaid visitors combine. Quantity seven, our extremely winning B2B trade just lately introduced similar and next-day last-mile supply within the North Florida marketplace with a contribution margin as much as thrice greater than e-commerce, served via real-time integrations with store control and estimating techniques. Quantity 8, now we have introduced a nascent high-margin price revenue choices, which come with delivery and product coverage, associate income, and a top class paid club and roadside help with over 3,000 paying individuals and rising.
Over the years, we predict this a part of our trade to assist lift our internet benefit margins. Quantity 9, we proceed to leverage our two remarkable logos in CarParts.com and JC Whitney, which permits us to tell apart our non-public label choices over the years. Whilst 2024 offered its percentage of demanding situations, we made important growth in key spaces that place us smartly for long term enlargement. I will now flip it over to Ryan to study our monetary effects.
Ryan Lockwood — Leader Monetary Officer
Thanks, David. Within the fourth quarter, we reported revenues of $133.5 million, down 15% from $156.4 million final yr. For the overall yr, we generated $588.8 million in revenues, down 13% from $675.7 million in 2023, with 2023 representing our best possible income quantity ever in buyer historical past. The decline was once essentially pushed via larger pricing blended with the affect of soppy client call for, in addition to important pressures in lighting fixtures and mirrors.
Gross benefit for the quarter was once $43.4 million, down 16% in comparison to the prior yr. Gross margin was once 32.5%, down moderately from 33% within the prior-year duration. For the overall yr, gross benefit was once inside of our anticipated vary at $196.7 million, down 14% in comparison to the prior yr. Gross margin was once 33.4%, down from 33.9% in 2023.
The decline in gross margin was once essentially pushed via larger outbound transportation prices regardless of some offset from greater pre-freight gross margin. GAAP internet loss for the quarter was once $15.4 million in comparison to a lack of $6.1 million within the prior-year duration. For the yr, GAAP internet loss for the yr was once $40.6 million in comparison to a lack of $8.2 million in 2023, essentially pushed via decrease gross benefit. For the fourth quarter, adjusted EBITDA loss was once $6.8 million, down from adjusted EBITDA of $1 million within the prior-year duration, essentially because of cushy client call for, value compression, and larger aggressive drive in efficiency advertising.
For the overall yr, adjusted EBITDA lack of $7.1 million was once down from $19.7 million in 2023, essentially impacted via our fourth quarter effects. In 2024, we incurred $6.4 million of increased bills out of doors of our customary operations, which we do not be expecting to reoccur in 2025, together with overlapping tool bills associated with our virtual transformation and one-time prices associated with the transfer of our Las Vegas facility. As David discussed, we’re concerned with harvesting go back on those strategic investments over the following few years. Turning to the steadiness sheet.
We ended the yr with $36.4 million of money and no revolver debt. We generated $0.3 million of pastime revenue within the fourth quarter and $1.5 million for the overall yr. Our stock steadiness was once $90.4 million at year-end as opposed to $128.9 million on the finish of 2023. Our money place and untapped revolver continues to give you the important liquidity to strengthen our marketing strategy.
As David discussed above, our corporate is recently comparing more than a few strategic possible choices in keeping with inbound pastime. Consequently, we don’t seem to be offering steering for 2025. I will now flip it again over to David for ultimate remarks.
David Meniane — Leader Govt Officer
Thanks, Ryan. Taking a look forward, we’re assured that the robust basis and enhancements throughout our trade secured all through 2024 have set us on a trail to reach long-term, sustainable certain adjusted EBITDA. Our priorities in 2025 come with: one, proceed to enlarge our product providing to draw new consumers and building up reasonable basket measurement; quantity two, monetize our 100 million annual web page visits and buyer lists with high-margin price revenue; quantity 3, scale our B2B providing with last-mile transportation and better contact gross sales in key markets; quantity 4, develop our cellular app trade to diversify our advertising combine and ship larger buyer lifetime worth; and quantity 5, deal with a robust steadiness sheet with a focal point on managing money drift and stock ranges. We’re dedicated to maximizing long-term shareholder worth as we focal point on taking pictures the rising alternative in entrance people throughout the extremely fragmented and underserved $400 billion auto portions marketplace.
I want to thank our international crew for his or her resilience, exhausting paintings, and dedication as we proceed to grow to be our trade. Thanks, everybody, for becoming a member of as of late’s name. We will now flip it again over to the operator.
Questions & Solutions:
Operator
This concludes as of late’s convention name. Thanks for collaborating. [Operator signoff]
Length: 0 mins
Name members:
Tina Mirfarsi — Vice President, World Communications and Tradition
David Meniane — Leader Govt Officer
Ryan Lockwood — Leader Monetary Officer
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