Michael Huffaker, CarParts.com Chief Operating Officer, highlighted the significance of the new facility saying, "This building will serve as our West Coast flagship, housing between 80% to 90% of our product assortment. With its advanced technology, it efficiently handles both conveyable and non-conveyable items, enabling faster order fulfillment and shipping." "Our focus has always been on understanding and meeting our customers' needs, and our new Las Vegas fulfillment center is a testament to that," add ...

Core Insights - CarParts.com, Inc. has appointed Christina Thelin as Chief Marketing Officer, who will report directly to CEO David Meniane and oversee various marketing functions [1][2] - Thelin brings over 20 years of marketing experience, having previously served as CMO in the tech industry and worked with Fortune 100 brands such as Google, Procter & Gamble, Visa, and Twitter [2] - The company emphasizes enhancing customer experience, engagement, and brand recognition as part of its growth strategy [2] Company Overview - CarParts.com is a technology-driven eCommerce company that offers over 1 million high-quality automotive parts and accessories, operating for over 25 years [3] - The company focuses on customer satisfaction and affordability, aiming to simplify the automotive repair process through a user-friendly website and app [3] - CarParts.com is headquartered in Torrance, California, and is committed to empowering drivers along their journey [3]

Company Overview - CarParts.com, Inc. is a technology-driven eCommerce company that offers over 1 million high-quality automotive parts and accessories [6] - The company has been operating for over 25 years and has established itself as a premier destination for drivers seeking repair and maintenance solutions [6] - CarParts.com is headquartered in Torrance, California [8] Business Model and Commitment - The company places the customer at the forefront of its operations, evident in its easy-to-use, mobile-friendly website and app [6] - CarParts.com aims to simplify the automotive repair process, eliminating uncertainty and stress associated with vehicle maintenance [6] - The company is committed to affordability and customer satisfaction, ensuring swift delivery of top-quality parts from leading brands across the nation [6] Upcoming Events - CarParts.com will hold a conference call on July 30, 2024, at 2:00 p.m. Pacific Time to discuss its financial results for the second quarter ended June 29, 2024 [4] - The results will be reported in a press release prior to the call [4] - The conference call will be hosted by CEO David Meniane, CFO Ryan Lockwood, and COO Michael Huffaker, followed by a question and answer period [5]

Today, CarParts.com proudly debuts its first major campaign in over two decades. The future of DIY car care is here with CarParts.com. The brand's new campaign, "Now That's My Speed," showcases how easy it is to access over 1 million parts at your fingertips with the CarParts.com app. "Our customers have always been at the center of our business," said David Meniane, Chief Executive Officer of CarParts.com. "This campaign was developed using extensive testing to ensure our message resonates deeply with our ...

Financial Data and Key Metrics Changes - In Q1 2024, the company reported revenues of $166.3 million, a decrease of 5% from $175.5 million in the prior year [30] - Gross profit for the quarter was $53.9 million, down approximately 14% compared to the prior year, with a gross margin of 32.4%, down from 35.6% [30] - GAAP net loss for the quarter was $6.5 million, compared to net income of $1.1 million in the prior year [30] - Adjusted EBITDA was approximately $1.1 million, down from $9.4 million in the prior year [31] - The company revised its gross profit margin guidance up to 33% plus or minus 100 basis points, from a previous guidance of 31% [32] Business Line Data and Key Metrics Changes - The company is focusing on optimizing its product and price assortment to capture market share, particularly targeting premium shoppers [14] - The mobile app revenue currently accounts for 8% of e-commerce revenue, up from 0% in Q3 of the previous year [24] - The company added about 7,000 SKUs year-to-date, with a product mix of approximately 65-35 between private label and branded products [67] Market Data and Key Metrics Changes - The company faced significant pressure in key categories, particularly in lighting and mirrors, due to low-cost, low-quality parts from overseas [19] - The current economic environment has made low-price, discount-seeking customers more scarce and expensive to acquire [20] Company Strategy and Development Direction - The company is focusing on a digital-first and customer-centric automotive e-commerce strategy [9] - It aims to improve efficiency and profitability through cost-saving initiatives expected to provide up to $8 million in cost reductions in 2024 [21] - The company is also investing in marketing channels to improve brand awareness and grow its customer base while reducing acquisition costs [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged disappointing performance in Q1 2024, citing headwinds in key categories and a deteriorating economic outlook [18] - The company is targeting adjusted EBITDA growth next year and aims for a medium-term adjusted EBITDA margin of 6% to 8% [38] - Management emphasized the importance of focusing on higher-value customers to maximize profitability and free cash flow [61] Other Important Information - The company ended the quarter with $46 million in cash and no revolver debt, with an inventory balance of $120 million [65] - The new semi-automated facility in Las Vegas is expected to drive improvements in customer experience and operating leverage [29] Q&A Session Summary Question: What is the current assumption for branded drop-ship revenue? - The company is adjusting its assumptions regarding branded drop-ship revenue but did not provide specific figures [41] Question: Can you elaborate on the $8 million in cost savings expected in 2024? - The $8 million in cost savings will be spread across both cost of goods and operating expenses, reflecting a shift in product mix and operational efficiencies [59] Question: Will the company remain EBITDA positive in 2024? - The company expects to remain EBITDA positive in 2024, although free cash flow may be negative due to significant investments in Las Vegas [54]

Financial Performance - Net sales for Q1 2024 were $166.3 million, a decrease of 5% compared to $175.5 million in Q1 2023[6] - Gross profit was $53.9 million, down from $62.6 million, resulting in a gross margin of 32.4%, a decline of 320 basis points year-over-year[7] - The company reported a net loss of $6.5 million, or $0.11 per share, compared to a net income of $1.1 million, or $0.02 per share in the prior year[7] - Adjusted EBITDA for Q1 2024 was $1.1 million, significantly lower than $9.4 million in Q1 2023[7] - Net loss for the thirteen weeks ended March 30, 2024, was $6,478 million, compared to a net income of $1,051 million for the same period in 2023[28] Guidance and Projections - The company aims for net sales in the range of $600 million to $625 million for the full year 2024, down from previous guidance of $662 million to $688 million[13] - Gross margin is expected to be around 33%, plus or minus 100 basis points, which is an improvement from the previous guidance of 31%[13] - The company is targeting a 6-8% Adjusted EBITDA margin in the medium term while increasing free cash flow generation[6] Cash and Liquidity - Cash balance as of March 30, 2024, was $46.0 million, with no revolver debt, down from $51.0 million at the end of the previous fiscal year[9] - Cash and cash equivalents decreased to $46,046 million from $50,951 million, a decline of about 11.5%[28] - Net cash provided by operating activities was $3,652 million, a significant decrease from $32,781 million in the prior year[28] - Cash received during the period for interest was $437 million, compared to $11 million in the prior year, indicating improved interest income[28] Assets and Liabilities - Total assets increased to $263,224 million as of March 30, 2024, up from $257,855 million on December 30, 2023, representing a growth of approximately 2.7%[26] - Total current liabilities remained relatively stable at $112,188 million, slightly down from $112,986 million[26] - Total stockholders' equity decreased to $109,152 million from $112,831 million, reflecting a decline of approximately 3.0%[26] Inventory and Capital Expenditure - Inventory levels decreased to $120,015 million from $128,901 million, a reduction of about 6.9%[26] - Additions to property and equipment amounted to $7,431 million, compared to $2,745 million in the same period last year, indicating increased capital expenditure[28] Operational Focus - The mobile app now contributes over 8% of total eCommerce revenue, with 38% of revenue coming from repeat customers[3] - The company is focusing on margin expansion through pricing optimization, marketing, supply chain, and technology improvements[5] - The company reported a depreciation and amortization expense of $4,025 million, up from $3,919 million in the previous year[28]

Financial Data and Key Metrics - Q4 2023 sales were $156 million, bringing full-year 2023 sales to a record-breaking $676 million, up 2% YoY and 16% on a 2-year stack [13] - Adjusted EBITDA for Q4 was $1 million, and $19.7 million for the full year 2023, down from $26.1 million in 2022 [13][30] - Gross profit for Q4 was $51.6 million, flat YoY, while full-year gross profit was $229.4 million, down slightly from $230.9 million in 2022 [16] - GAAP net loss for Q4 was $6.1 million, compared to $6.2 million in the prior year, and full-year GAAP net loss was $8.2 million versus $1 million in 2022 [27] - The company repurchased 726,000 shares in Q4, bringing total repurchases in 2023 to 1.2 million shares [13][31] Business Line Data and Key Metrics - The mobile app now generates over 7% of total e-commerce revenue, with over 250,000 downloads [20][29] - Revenue from the friction category (brakes and rotors) increased by over 40% YoY, accounting for approximately 5% of total volume [20] - The third-party premium brands business grew over 25% YoY, now a profitable $100 million revenue business [21] - Website traffic reached over 100 million visits in 2023, with 38% of e-commerce revenue coming from repeat customers [20] Market Data and Key Metrics - The company saw sustained price deflation due to macroeconomic challenges, with unit growth of approximately 8% in Q4 2023 [13] - The automotive aftermarket is valued at $389 billion, and the company is well-positioned to capture market share as consumer confidence rebounds [13] - The company expects revenue growth in 2024 to range from -2% to +2%, driven by deflation and mid- to high single-digit unit growth [8] Company Strategy and Industry Competition - The company is focusing on expanding its tech and product offerings, including growing third-party premium brands and enhancing the e-commerce experience [21][64] - A new semi-automated facility in Las Vegas is expected to open in Q2 2024, driving operating leverage and reducing last-mile transportation costs [14][22] - The company is prioritizing marketing and branding efforts, including YouTube content, which saw a 10x increase in views YoY in early 2024 [7][64] - The company aims to reduce marketing spend from 12.3% to 10% of revenue, with a focus on app engagement and organic growth [45][49] Management Commentary on Operating Environment and Future Outlook - The company faced a challenging macroeconomic environment in 2023, with price compression and deflation impacting margins [8][9] - Management expects deflation to continue through the first three quarters of 2024, with gross profit margins projected to be around 31% ±100 basis points [8] - The company is focused on cost reduction initiatives, including the elimination of 150 global roles, expected to save $10 million annually [62] - Management remains confident in the company's long-term growth potential, citing a large TAM, an aging car fleet, and low online penetration in the automotive aftermarket [52][58] Other Important Information - The company ended 2023 with $51 million in cash and an untapped revolver of up to $75 million [13][24] - Inventory at the end of Q4 was $129 million, down from $136 million in the prior year [31] - The company renewed its share repurchase program through July 2026, with $25 million remaining [31] Q&A Session Summary Question: Focus areas for 2024 and cost reduction efforts [35] - Management highlighted three key priorities for 2024: e-commerce experience and app engagement, product offering expansion, and marketing/branding [41] - The company is deferring some initiatives, such as the do-it-for-me offering, to focus on immediate growth opportunities [53] Question: Impact of cost reductions and gross margin guidance [47][59] - The company reduced 15% of corporate roles and 10% of frontline roles, with annualized savings of $10 million [47] - Gross margin guidance for 2024 is 31% ±100 basis points, impacted by deflation and outbound freight costs [59] Question: Mobile app growth and marketing spend flexibility [49] - The mobile app has seen strong organic growth, with higher average selling prices and repeat purchase rates [49] - The company aims to reduce marketing spend by 100-200 basis points over the next few years [49] Question: Revenue guidance range and factors influencing it [51] - Revenue guidance for 2024 is -2% to +2%, with the range influenced by price compression, deflation, and macro factors [51] Question: Do-it-for-me offering and its contribution in 2024 [53] - The do-it-for-me initiative is a long-term bet, but the company is deferring it to focus on immediate growth opportunities in 2024 [53]

Financial Performance - For fiscal year 2023, the company generated net sales of $675,729, an increase of 2.1% compared to $661,604 in fiscal year 2022[199]. - The company incurred a net loss of $8,223 in fiscal year 2023, compared to a net loss of $951 in fiscal year 2022[199]. - Gross profit decreased by 0.6% to $229,406, with a gross margin decline of 100 basis points to 33.9% in fiscal year 2023[200]. - Operating expenses increased by $9,048, or 3.9%, for fiscal year 2023, totaling $239,287, representing 35.4% of net sales[218]. - Adjusted EBITDA for fiscal year 2023 was $19,687, down from $26,113 in fiscal year 2022[206]. - The company’s net loss before interest, taxes, depreciation, and amortization was $19,687 in fiscal year 2023[199]. - The increase in net sales was primarily driven by continued demand despite a decrease in gross margin due to unfavorable freight costs[217]. - Total other income increased by $2,773, or 285.9%, for fiscal year 2023 compared to fiscal year 2022, primarily due to higher interest income from increased interest rates and cash balance[219]. - Income tax provision decreased by $487, or 77.1%, from $632 in fiscal year 2022 to $145 in fiscal year 2023[220]. Cash Flow and Debt Management - Cash and cash equivalents rose to $50,951 as of December 30, 2023, representing a $32,184 increase from $18,767 as of December 31, 2022[222]. - Net cash provided by operating activities increased to $50,001 for the fiscal year ended December 30, 2023, compared to $15,368 for the prior year[225]. - Total debt decreased to $16,635 as of December 30, 2023, down from $20,669 as of December 31, 2022[228]. - The Company maintains a revolving Credit Facility with a principal amount of up to $75,000, which can be increased to $150,000 under certain conditions[229]. - The Company had no outstanding revolving loan balance as of December 30, 2023[230]. Tax and Deferred Assets - The Company maintained a valuation allowance of $38,458 against deferred tax assets due to cumulative losses in recent years[220]. - Federal and state NOL carryforwards were $105,224 and $84,780, respectively, with federal NOL carryforwards beginning to expire in 2029[221]. Market Trends and Product Offering - The average age of U.S. light vehicles reached a record-high of 12.5 years in 2023, indicating increased demand for aftermarket parts[197]. - The U.S. Auto Care Association projects that online sales of auto parts and accessories will reach approximately $21 billion by 2025, supporting the company's growth strategy[198]. - The company offers approximately 1,047,000 SKUs on its flagship website and app, providing a comprehensive selection for consumers[196]. Investment Activities - Net cash used in investing activities was $11,901 for the fiscal year ended December 30, 2023, primarily due to additions to property and equipment[226].

TORRANCE, Calif. – March 7th, 2024 – CarParts.com, Inc. (NASDAQ: PRTS), one of the leading eCommerce providers of automotive parts and accessories, and a one-stop shop for vehicle repair and maintenance needs, is reporting results for the fourth quarter and fiscal year ended December 30,2023. Fiscal Year 2023Summary vs. Fiscal Year 2022 Fourth Quarter 2023Summary vs.Year-Ago Quarter Management Commentary CarParts.com Reports Highest Fiscal Year Sales in Company History Record Fiscal Year Sales of $676 milli ...

CarParts.com, Inc. (NASDAQ:PRTS) Q3 2023 Earnings Conference Call October 30, 2023 5:00 PM ET Company Participants Tina Mirfarsi - SVP, Communications and Culture David Meniane - CEO Michael Huffaker - COO Ryan Lockwood - CFO Conference Call Participants Ryan Sigdahl - Craig-Hallum Capital Group Darren Aftahi - ROTH MKM Ryan Meyers - Lake Street Operator Good afternoon. At this time, all participants will be in a listen-only mode. After the presentation, there will be a question-and-answer session. Please n ...