Carvana reported Thursday a much wider than expected loss as a fall in used-car prices and spike in interest rates drove up costs.
Carvana Co (NYSE: CVNA) fell more than 2% in after-hours trading following the report.
The e-commerce used-car platform reported a loss of $7.61 a share on revenue of $2.84 billion, compared with street estimates for a loss of $2.12 a share on revenue of $3.07B.
Retail units sold slumped 23% to 86,977, with total gross profit per unit falling by $2,347 to $2,219.
Looking ahead, the company warned of a further drop in sales, forecasting a “sequential reduction in retail units sold in Q1 2023 compared to Q4 2022.”
Still, Carvana touted a route to profitability on expectations that sales volume will stabilize and the reduction in inventory will boost retail gross profit per unit in the subsequent quarter after Q1.
"On GPU, we currently expect a sequential increase in Total GPU in Q1 2023 compared to Q4 2022," the company said.
“We expect the combination of these three factors to lead to significantly improved Adjusted EBITDA over the next two quarters,” it added.
