Carvana Co.’s shares bounced off Wednesday’s after-hours trading after used car retailers admitted in the first quarter that both industry-wide and company-specific issues had impacted the company’s business. The company said it plans to address that challenge.
In a letter to shareholders, Omicron variants and used car prices were one of the factors affecting the industry as a whole this quarter, and the company raised its own issue of “realignment and logistics network disruption.” Also said that it dealt with.
“Usually we prepare sales volumes 6-12 months in advance, which means that most business functions have built much more capacity than we achieved in the first quarter,” the company said in a letter. I am saying. “In the short term, the cost is relatively fixed, so the smaller the number of retail units, the higher the cost of goods sold per unit.”
Cabana is trying to overcome that challenge, CEO Arnie Garcia III said in a company earnings statement. The company’s “logistics team has clear plans in several key areas,” returning the indicators to their original state and telling investors “significantly beyond.” In addition, Carvana plans to build a more affordable car selection.
In after-hours trading on Wednesday, stocks fell 25.7%, but rose 4.6% to end the extended session, according to Dow Jones market data. They decreased by about 9% in regular Wednesday sessions.
Carvana posted a net loss of $ 506 million in the last quarter, compared to a loss of $ 82 million in the year-ago quarter. The company had a net loss of $ 260 million, but the same metric of the previous year resulted in a loss of $ 36 million.
Carvana lost $ 2.89 per share this quarter, compared to 46 cents in the year-ago quarter. FactSet’s consensus was a loss of $ 1.58 per share.
Revenue increased from $ 2.2 billion to $ 3.5 billion while FactSet’s tracked analysts modeled $ 3.4 billion.
“We faced a unique and difficult environment in the first quarter, but we already see positive trends across key indicators,” the company said in a shareholder letter.
Still, “current industry trends affecting customer affordability, high used car prices, sharp fluctuations in interest rates, sharp rises in fuel prices, and other macroeconomic uncertainties affecting the used car market. For “sex,” Carvana is “numerical short-term guidance on specific 2022 balances.”
Carvana frankly admitted in a shareholder letter that the quarter was “challenging,” but the company is improving its business, partly because of the “weaknesses” revealed in the current environment. He said he was also looking at “opportunities.”
“Although this quarter has undoubtedly been a recession, we will strive to make this quarter a marker for even greater progress in order to reach our goal of becoming the largest and most profitable car retailer.” The letter states.
Separately, the company announced that it will offer $ 1 billion of new series of perpetual preferred stock and $ 1 billion of Class A common stock. Ernest Garcia II and CEO Ernie Garcia III have expressed interest in buying up to $ 432 million in total Class A common stock, along with the entities managed by them. The company announced that it is.