CarParts.com, one of the leading e-commerce providers of automotive parts and accessories, is reporting results for the fourth quarter and fiscal year ended January 2, 2021.
“The significant investments we made in 2019 laid the foundation for the success we experienced in 2020,” said Lev Peker, CEO of CarParts.com. “Our strategy of ‘Right Part, Right Place, Right Time’ is helping us transform and disrupt an industry with a superior value proposition that keeps our customers at the center of everything we do.
“While we are very proud of our work over the past two years and the improvements we have made, we still believe that there is significant market opportunity ahead of us,” Pekar added. “Our plan is to continue to get closer to the customer, provide an expanding selection of both mechanical and EV/Hybrid replacement parts, and help customers get parts installed with increased convenience and transparency.
“We’re laser-focused on providing a fast and convenient shopping experience that builds trust, brand awareness and drives repeat purchasing. CarParts.com continues to demonstrate strong forward momentum and our team is executing well on multiple strategic objectives,” he noted.
Fourth Quarter 2020 Financial Results
Net sales in the fourth quarter of 2020 were $119.7 million compared to $63 million in the year-ago quarter. The growth in sales was primarily driven by increased revenue growth from the company’s flagship website, CarParts.com.
Gross profit in the fourth quarter increased 97% to $41.6 million compared to $21.2 million last year, with gross margin up 110 bps to 34.8% compared to 33.7%. These improvements were driven by strong growth in house brands sales, favorable channel and product mix, partially offset by higher inbound and outbound freight costs and seasonal surcharges from our carriers.
Total operating expenses in the fourth quarter were $44.9 million compared to $23.3 million in the fourth quarter last year. The increase was driven by personnel costs related to the company’s new Texas DC, technology spend and marketing spend.
Net loss in the fourth quarter decreased to ($3.5) million compared to ($25.1) million in the fourth quarter last year. The loss for 2020 was primarily driven by startup expenses incurred to open the Texas DC without the benefit of offsetting revenues while the prior year loss was primarily driven by a non-cash valuation allowance charge of ($23) million related to deferred tax assets.
Adjusted EBITDA in the fourth quarter decreased to $1 million compared to $1.7 million in the year-ago quarter, with the decrease driven primarily by the aforementioned increase in expenses related to opening a new DC as well as increased receiving across the network.
At fiscal year-end Jan. 2, 2021, the company had no revolver debt, no outstanding trade letters of credit and a cash balance of $35.8 million, compared to no debt, $17.3 million of outstanding trade LCs and a $2.3 million cash balance at Dec. 28, 2019.
