CarParts.com, Inc.

What they do

CarParts.com sells aftermarket automotive products to DIY consumers and professional customers through its flagship website, mobile app, wholesale platform, and select third-party marketplaces like eBay and Amazon. The company offers over 1.6 million SKUs, using a mix of drop-ship and stock-and-ship fulfillment across four U.S. distribution centers. It also operates private label brands, including JC Whitney, and has launched AI-powered shopping assistant Spark and specialized hubs for European and performance parts.

Revenue drivers

• Core eCommerce sales — Net sales from the flagship website and mobile app, the primary revenue source, totaled $547.5 million in fiscal 2025, down 7.0% year-over-year.
• Third-party marketplaces — Sales through eBay and Amazon contribute to revenue, though the company has rationalized marketing spend on lower-margin customers, impacting volume.
• Wholesale platform — CarPartsWholesale.com serves repair shops and installers, providing a B2B revenue stream.
• A-Premium partnership — Long-term commercial partnership with A-Premium adds ~150,000 SKUs on a dropship basis, with annualized revenue run rate approaching $50 million.

Recent performance

In Q2 2026 (ended July 4, 2026), net sales declined 10.7% year-over-year to $135.6 million, while gross margin expanded to 33.2%. Net loss narrowed to $3.2 million from $12.7 million in the year-ago quarter, and adjusted EBITDA turned positive at $1.8 million, the highest since Q3 2023. For fiscal 2025, net sales fell 7.0% to $547.5 million, and net loss widened to $50.4 million from $40.6 million in 2024. Operating cash flow was negative $34.1 million in fiscal 2025, versus positive $10.3 million in 2024. Cash and equivalents stood at $38.2 million as of July 4, 2026.

Strategy

Management is focused on disciplined growth, prioritizing profitable customers and cost control over top-line expansion. Investments include technology (AI, data), supply chain and last-mile delivery, with a plan to scale the last-mile network toward 300,000 packages annually. The company is expanding private label and branded assortments, including JC Whitney and European vehicle parts, and leveraging the A-Premium partnership to add SKUs without inventory investment. A new $25 million revolving credit facility with First Business Bank (undrawn) provides additional liquidity. Recent actions include a 10-to-1 reverse stock split to regain Nasdaq compliance.

Risks

• Supply chain concentration — Dependence on suppliers in Taiwan and China for the majority of products poses geopolitical and disruption risks.
• Continued net losses — The company has recorded net losses in recent years, including $50.4 million in fiscal 2025, and may continue to incur losses.
• Third-party marketplace reliance — A substantial portion of revenue comes from marketplaces like eBay and Amazon, and losing access could materially hurt revenue.
• Macroeconomic pressures — Higher fuel, plastic, and steel prices, as well as wage increases, could compress margins.

Outlook

Management expects continued quarter-over-quarter adjusted EBITDA improvement, citing six consecutive quarters of gains. The A-Premium partnership has a longer-term path to exceed $100 million in annualized revenue, and fee income from Mastercard, membership, and warranties is nearing $5 million annualized. Last-mile delivery is scaling, with next-day service from two of four distribution centers. However, management remains cautious, noting headwinds from customer health and the business environment.