CarParts.com saw its Q2 earnings decline 18% from the same period a year ago to $144.3 million. Still, company leaders expressed confidence that the lower earnings are part of a broader transition at the company that they believe will lead it to profitability.

“In the second quarter, we made significant progress on gross margin and operating efficiencies, which reinforces our confidence that we’re on the right track,” said CarParts.com CEO David Meniane. “We expect the fiscal year 2024 to be a low watermark year as we execute on the changes we have been making.”

CarParts.com is No. 147 in the Top 1000 Database, where Digital Commerce 360 ranks the largest North American ecommerce retailers by annual online sales. There, it is classified as an Automotive Parts & Accessories retailer. Digital Commerce 360 projects that CarParts.com web sales will reach $677.51 million in 2024.

CarParts.com web sales by year

CarParts.com Q2 earnings results

Meniane said the company expects its newly realized operational efficiencies will lead to more robust earnings in 2025. Other notable numbers from the Q2 report include:

• Gross profit of $48.4 million, a reduction from $60.4 million in the year-ago period, with gross margin of 33.5%.
• Net loss was $8.7 million, or down $0.15 per share, compared to a net loss of $0.7 million, or $0.01 per share.
• Adjusted EBITDA of $0.1 million, which is a reduction from $6.3 million the prior year.
• Cash of $34.1 million and no revolver debt.
• Total cumulative mobile app downloads of 450,000, more than doubled from the beginning of the year.

Importance of mobile app for CarParts.com digital sales

While CarParts.com has no physical presence — all its sales are digital — it is heavily promoting and refining its mobile app ordering capability, and that appears to be paying off.

Meniane said in the earnings call that 12 months after launching, mobile app sales accounted for 8% of total ecommerce revenue, with approximately 80% of customers shopping on mobile.

“Over time, we expect direct in-app purchases to drive savings and advertising spending by reducing our reliance on search engines and performance marketing, as well as incentivizing repeat purchases,” Meniane says.

But that doesn’t mean CarParts.com isn’t continuing to invest in more conventional channels.

“We continue to invest in our marketing channels,” Meniane told investors. “We are making strides on building brand awareness and recognition of our leading digital-first and customer-centric automotive ecommerce strategy, which is critical to capturing our target high-value customer base.”

Welcoming a new chief marketing officer

The earnings call also allowed CarParts.com to introduce Christina Thelin, who joined the company in July. Thelin brings over 20 years of experience in marketing with brands like Visa, Twitter, and Google. She replaces Houman Akhavan, who served in that role until last year.

“Christina will lead our strategic marketing initiatives as we continue to expand our market presence, drive customer engagement, and increase awareness for CarParts.com,” Meniane said.

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