Carvana’s Q3 Disappoints
Used-car retailer misses expectations in face of industry pressures.
Carvana’s stock fell more than 7% in after-hours trading Thursday upon news of the third-quarter results.
IMAGE: Getty Images
Online used-car retailer Carvana missed Wall Street expectations for the third quarter, announcing that revenue, profit and sales fell year-over-year.
Carvana’s gross profit fell 31% from a year earlier to $359 million. Retail vehicle sales dropped 8%, and gross profit per unit fell more than $1,100 to $3,500.
“This economic environment remains uncertain, but we are focused squarely on the goal of driving the business to profitability,” said CEO Ernie Garcia in a press release. “While progress is rarely linear, we remain on the path to becoming the largest and most profitable auto retailer.”
Tempe, Ariz.-based Carvana said it had a net loss of $508 million in the quarter.
The company blamed elevated used-car prices and ongoing interest rate increases for tempering consumer demand, a phenomenon that continued Thursday when the Federal Reserve announced another interest rate hike to weaken inflation.
This time last year, the used-car market was buoyed by inflated new-car prices resulting from decreased inventories brought about by pandemic-related market pressures.
Carvana’s stock fell more than 7% in after-hours trading Thursday upon news of the third-quarter results.
Originally posted on Auto Dealer Today
More Industry
Autos More Appealing
Consumers gave new cars better scores again this year for design, performance and more as mass-market brands kept gaining on premium lineups, JD Power found in an annual poll.
Read More →
Used EVs Defy Overall Market
While the used-car market saw three months of price declines or stagnation, the used EV segment did the opposite – rising for three straight months.
Read More →
Gone to the Dogs
A Stellantis brand decided to have some fun with one of its SUVs’ design to address growing emphasis on family pets.
Read More →
OEM Poll Sees Industry Evolution
Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.
Read More →
Luxe N.C. Dealerships Change Hands
A collection of Italian and English brand franchises were handed off to the owner’s friend in the business and include the Carolinas’ only Ferrari retail stores.
Read More →
Exposure Drives Interest in Chinese Cars
At a recent demonstration, consumers had the chance to ride in a Chinese-branded vehicle, a firsthand experience that improved their perceptions and purchase intent.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Agent Advocate
Rob Mancuso, who comes from a long line of auto dealers, values general agents’ place in the industry and makes a case for them taking an even bigger seat at the table.
Read More →
Driving Under Distraction
Though consumers gave higher marks to new vehicles in JD Power’s most recent initial-quality poll, high-tech interference worsened, pointing to craving for simplicity.
Read More →
Affordable New Cars a Thing of the Past
More than one out of five new vehicles sell for more than $60,000, according to Edmunds. That's up 7% compared to prepandemic 2019.
Read More →