What happened
Shares of Carparts.com (PRTS 6.43%) rocketed upward by 17.5% on Friday. After a stupendous first quarter, the auto-parts e-commerce retailer sustained its momentum through the second quarter, delivering stellar numbers that crushed consensus estimates.
So what
Q2 was a record quarter for Carparts.com as it ramped up shipments from its new Grand Prairie, Texas, distribution facility and struck meaningful branding partnerships. Among the notable year-over-year gains it reported for the quarter:
- Sales: Up 32% to a record $157.5 million.
- Gross profit: Up 31% to $53.3 million.
- Net income: Up 31% to $2.1 million.
- Adjusted EBITDA: Up 48% to a record $8.3 million.
The COVID-19 pandemic helped drive the online retailer's web traffic and sales upward. During Carparts.com's Q2 earnings conference call, management revealed its flagship e-commerce site brought in roughly 58% of sales. Marketplaces provided 36%, and with the remainder coming from offline sources.
Image source: Getty Images.
CEO Lev Peker highlighted how the company's increased distribution capacity was a major driving factor behind its sales growth, especially as the Grand Prairie facility became fully operational.
The company is now nearly doubling that center's size with a 156,000 square foot expansion, and it's also on track to open a new 180,000 square foot distribution center in Jacksonville, Florida. Once operational, these facilities will boost the company's total distribution center footprint to more than 1.2 million square feet. For perspective, its total square footage, including leased offices and distribution centers, was 966,000 square feet as of Jan. 2.
RBC Capital on Friday upped its price target on Carparts.com stock from $18 to $21. The stock closed the session at $19.93.
Now what
Although Carparts.com didn't provide any guidance for 2021, management reiterated its long-term goal of growing revenue at a compound annual rate of 20% to 25%. Its freshly announced share repurchase program worth $30 million further reflects management's confidence in the company's prospects. In fact, given its expansion efforts and its stupendous operational performance so far in 2021, it appears Carparts.com is on track to deliver yet another record year. That should keep investor interest in this growth stock intact.
