CarParts.com (PRTS 0.77%), an online seller of automotive parts and accessories, released its second-quarter 2025 results on August 12, 2025. The headline news was a year-over-year increase in revenue (GAAP) to $151.9 million, a 5% gain, yet this figure fell short of the $153.5 million GAAP estimate from analysts. The company reported a net loss per share of ($0.23) (GAAP), missing GAAP estimates by $0.075 per share and widening from the prior year quarter. The quarter saw gross profit growth (GAAP) but continued challenges with profitability and cash flow, as the company’s strategic review remains ongoing. Overall, the period was marked by operational adjustments but also heightened costs and ongoing uncertainty about the future trajectory of the business.
| Metric | Q2 2025(13 weeks ended June 28, 2025) | Q2 2025 Estimate | Q2 2024(13 weeks ended June 29, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | ($0.23) | ($0.16) | ($0.15) | (53.3%) |
| Revenue (GAAP) | $151.9 million | $153.5 million | $144.3 million | 5.3% |
| Gross Profit | $49.8 million | $48.4 million | N/A | |
| Adjusted EBITDA | ($3.1 million) | ($0.1 million) | N/A | |
| Cash Balance | $19.8 million | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Areas
CarParts.com is an internet-based retailer specializing in selling replacement parts, performance accessories, and repair solutions for vehicles. Its digital platform, combined with a proprietary product database, helps customers find the right parts among more than 1 million items, including both private label and recognized branded products.
Recent business priorities focus on enhancing technological infrastructure, optimizing supply chain operations, and expanding product categories. The company’s technological improvements, such as its mobile app and website, are designed to boost customer engagement and reduce the reliance on paid marketing channels. Success factors for CarParts.com are centered on efficient supply chain management, competitive pricing, and offering a wide selection of products, as well as building relationships with customers through digital initiatives and membership programs.
Quarterly Highlights and Performance Drivers
The quarter was shaped by a modest revenue increase (GAAP) but a shortfall against internal and external targets. Revenue (GAAP) grew 5% compared to the year-ago quarter, yet it missed consensus forecasts. Gross profit (GAAP) expanded by 2.9% compared to the year-ago quarter, while gross margin (GAAP) narrowed to 32.8%. This drop was linked mainly to changes in product mix and the ongoing impact of international tariffs. The company experienced a net loss (GAAP) of $12.7 million, a deterioration from last year’s $8.7 million GAAP net loss. The main factors were lower margins and higher marketing spending, including some non-recurring costs tied to the exploration of strategic alternatives.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a metric that strips out certain expenses to give a clearer sense of operational profitability, stood at negative $3.1 million. This was an improvement from Q1 FY2025, but worse than a year prior, when the figure was nearly breakeven on an Adjusted EBITDA basis. In June 2025, CarParts.com achieved positive adjusted EBITDA, reflecting early results from cost-saving efforts, including realignment of its fulfillment network and investments in artificial intelligence and automation. Management identified $10 million in expected annualized cost savings from these initiatives. However, these improvements were offset by continued weakness in overall profitability and higher operating expenses.
Technological infrastructure continues to play a significant role. The company’s mobile app, which lets users browse and buy parts from their phones, has surpassed 1 million cumulative downloads. According to management, the app now accounts for over 10% of e-commerce revenue. Investments in technology are intended to improve efficiency and reduce customer acquisition costs, but so far, the gains have not translated into marked improvement in headline financial results. On the supply chain side, inventory rose to $94 million. Outbound transportation costs, which include shipping items to customers, held steady as a share of revenue.
During the quarter, CarParts.com continued to emphasize its broad product selection, with more than 1 million stock keeping units (SKUs) across private label and branded lines. Although the company did not make major announcements about new product categories, it referred to ongoing efforts to refine its assortment and grow both exclusive and branded offerings. In customer engagement, membership programs like CarParts+ and Roadside Assistance Memberships climbed to over 7,000 subscribers. Still, translating these achievements into improved margins or profitability remains a work in progress.
The company noted some one-time expense items in the quarter. These included $0.38 million spent on legal and advisory services related to its strategic alternatives review, as well as $1.66 million in workforce transition costs.
Looking Ahead: Guidance and Risks
CarParts.com did not provide formal financial guidance for the upcoming quarter or for fiscal 2025. Management cited the ongoing strategic review as the main reason for withholding future targets. The company indicated it is evaluating options such as a potential sale, strategic investment, or partnership. No timeline or specifics were given, with the CEO stating, “We are currently evaluating several different transaction structures, including a potential sale of the company and strategic investments”
Key areas for investors and observers to watch in the coming quarters include liquidity, margin improvements, and the progress of cost-saving plans. The company’s cash reserves declined to $19.8 million as net loss widened compared to the year-ago quarter. CarParts.com now carries a $10 million balance on its revolving credit line. Management maintains a focus on operational discipline, continued growth in mobile and e-commerce engagement, and capturing savings from supply chain and staffing measures. The absence of financial guidance leaves uncertainty around revenue and profit trends as the business navigates competitive and industry pressures, along with its internal restructuring process.
PRTS does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
