Carvana shares fell in extended trading after the company announced its third-quarter financial results were worse than expected and reflected a decline in nearly every aspect of the used car retailer’s business.
Carvana shares fell by more than 7% during after-hours trading following the announcement and have plunged nearly 50% this year – a result of a struggling used car market facing higher prices and interest rate hikes.
The company reported a gross profit of $359 for the third quarter, a 31% decrease from last year. Retail sales dropped 8% compared to the previous year, landing at 102,570 vehicles. Gross profit per unit also declined by more than $1,100 to $3,500. Revenues landed at $3.39 billion, missing expectations of $3,71 billion.
The company saw a loss per share of $2.67 versus the expected $1.94.
“This economic environment remains uncertain, but we are focused squarely on the goal of driving the business to profitability,” said Carvana 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.”
In a letter to shareholders, the used car retailer said the average monthly payment for a customer buying a typical car has jumped 22% in 2022 over last year, making it harder for the average buyer to afford a vehicle.
Earlier this year, the company laid off around 2,500 employees, representing 12% of its workforce, in an effort to cut costs.
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