CarParts.com Swings to Loss Amidst Credit Facility Management

TL;DR

**PRTS is bleeding cash, and investors should pump the brakes on this stock.**

AI Summary

CarParts.com, Inc. reported a net loss of $1.3 million for the three months ended June 28, 2025, a significant decline from the net income of $0.5 million in the prior year's comparable period. Revenue figures were not explicitly detailed in the provided excerpt, but the shift to a net loss indicates potential top-line pressures or increased operational costs. The company's retained earnings decreased from $58.8 million on March 29, 2025, to $57.5 million on June 28, 2025, reflecting the quarterly loss. Key business changes include the ongoing management of its revolving credit facility with JPMorgan Chase Bank, which had a maximum borrowing capacity of $125.0 million and a minimum of $10.0 million during the period. Risks include potential fluctuations in the availability and cost of credit, as evidenced by the credit facility details. The strategic outlook appears focused on maintaining liquidity and managing its capital structure, as indicated by the detailed reporting of common stock, treasury stock, and additional paid-in capital changes.

Why It Matters

CarParts.com's swing to a net loss of $1.3 million from a $0.5 million net income impacts investor confidence, signaling potential operational challenges or market headwinds in the competitive auto parts sector. For employees, sustained losses could lead to job insecurity or reduced growth opportunities. Customers might see impacts on pricing or service if the company struggles financially against larger competitors like AutoZone or Advance Auto Parts. The broader market will watch if this trend reflects a softening in the online auto parts segment, potentially affecting other e-commerce players.

Risk Assessment

Risk Level: medium — The company reported a net loss of $1.3 million for the three months ended June 28, 2025, a significant deterioration from a net income of $0.5 million in the prior year. This shift to unprofitability, coupled with a decrease in retained earnings from $58.8 million to $57.5 million, indicates financial strain and increased operational risk.

Analyst Insight

Investors should exercise caution and conduct further due diligence into CarParts.com's revenue trends and cost structure. Consider holding off on new investments until the company demonstrates a clear path back to profitability and stable retained earnings.

Financial Highlights

total Assets

58761000

net Income

-$1.3M

Key Numbers

• $1.3M — Net Loss (CarParts.com reported a net loss of $1.3 million for Q2 2025, a swing from $0.5 million net income in Q2 2024.)
• $57.5M — Retained Earnings (Retained earnings decreased to $57.5 million on June 28, 2025, from $58.8 million on March 29, 2025.)
• $125.0M — Revolving Credit Facility Max (The maximum borrowing capacity under the JPMorgan Chase Bank revolving credit facility was $125.0 million.)
• $10.0M — Revolving Credit Facility Min (The minimum borrowing capacity under the JPMorgan Chase Bank revolving credit facility was $10.0 million.)

Key Players & Entities

• CarParts.com, Inc. (company) — filer of the 10-Q
• JPMorgan Chase Bank (company) — provider of revolving credit facility
• $1.3 million (dollar_amount) — net loss for Q2 2025
• $0.5 million (dollar_amount) — net income for Q2 2024
• $58.8 million (dollar_amount) — retained earnings on March 29, 2025
• $57.5 million (dollar_amount) — retained earnings on June 28, 2025
• $125.0 million (dollar_amount) — maximum borrowing capacity of revolving credit facility
• $10.0 million (dollar_amount) — minimum borrowing capacity of revolving credit facility
• SEC (regulator) — regulates 10-Q filings
• Bloomberg (company) — financial news outlet

FAQ

Risk Factors

• Credit Facility Fluctuations [medium — financial]: The company's revolving credit facility with JPMorgan Chase Bank had a maximum borrowing capacity of $125.0 million and a minimum of $10.0 million during the period. Fluctuations in the availability or cost of this credit could impact the company's liquidity and ability to fund operations or strategic initiatives.

Industry Context

CarParts.com operates in the auto and home supply retail sector, which is characterized by intense competition from both online retailers and traditional brick-and-mortar stores. The industry is sensitive to consumer spending, vehicle age, and the availability of aftermarket parts. Trends include a growing preference for e-commerce channels and increasing demand for specialized or hard-to-find parts.

Regulatory Implications

As a publicly traded company, CarParts.com is subject to SEC regulations and reporting requirements, including the timely filing of 10-Q reports. Compliance with financial reporting standards ensures transparency for investors. There are no specific new regulatory risks highlighted in the provided excerpt.

What Investors Should Do

1. Monitor revenue trends and cost management strategies.
2. Assess the company's liquidity and debt management.
3. Analyze the drivers of the decrease in retained earnings.

Key Dates

• 2025-06-28: End of Second Quarter 2025 — Reporting period for the 10-Q, showing a net loss of $1.3 million and a decrease in retained earnings.
• 2025-03-29: End of First Quarter 2025 — Previous reporting period, with retained earnings of $58.8 million, indicating a decrease in the subsequent quarter.

Glossary

Retained Earnings

The cumulative amount of net income that a company has retained over its lifetime, after paying out dividends. (The decrease from $58.8 million to $57.5 million directly reflects the net loss incurred in the quarter.)

Revolving Credit Facility

A type of credit line that allows a company to borrow, repay, and re-borrow funds up to a certain limit over a specified period. (Details on the $125.0 million maximum and $10.0 million minimum capacity highlight the company's access to and management of debt financing.)

Treasury Stock

Stock that a company has repurchased from the open market. (Changes in treasury stock can indicate share buyback programs or stock option exercises, impacting share count and equity.)

Additional Paid-In Capital

The amount of capital a company has received from shareholders in exchange for stock, above the stock's par value. (Fluctuations can signal new equity issuances or stock-based compensation activities.)

Year-Over-Year Comparison

The most significant change compared to the prior year's comparable period is the swing from a net income of $0.5 million to a net loss of $1.3 million for the three months ended June 28, 2025. While revenue figures are not detailed here, this shift indicates potential pressures on profitability, either from declining sales or increased operating costs. Retained earnings have also decreased, reflecting this quarterly loss.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value per share PRTS The NASDAQ

Filing Documents

• prts-20250628x10q.htm (10-Q) — 1371KB
• prts-20250628xex31d1.htm (EX-31.1) — 14KB
• prts-20250628xex31d2.htm (EX-31.2) — 14KB
• prts-20250628xex32d1.htm (EX-32.1) — 7KB
• prts-20250628xex32d2.htm (EX-32.2) — 7KB
• prts-20250628x10q004.jpg (GRAPHIC) — 16KB
• 0001378950-25-000104.txt ( ) — 4590KB
• prts-20250628.xsd (EX-101.SCH) — 28KB
• prts-20250628_cal.xml (EX-101.CAL) — 39KB
• prts-20250628_def.xml (EX-101.DEF) — 106KB
• prts-20250628_lab.xml (EX-101.LAB) — 289KB
• prts-20250628_pre.xml (EX-101.PRE) — 181KB
• prts-20250628x10q_htm.xml (XML) — 597KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION ITEM 1.

Financial Statements

Financial Statements 4 Consolidated Balance Sheets (Unaudited) at June 28, 2025 and December 28, 2024 4 Consolidated Statements of Operations and Comprehensive Operations (Unaudited) for the Thirteen and Twenty-six Weeks Ended June 28, 2025 and June 29, 2024 5 Consolidated Statements of Stockholders' Equity (Unaudited) for the Thirteen and Twenty-six Weeks Ended June 28, 2025 and June 29, 2024 6 Consolidated Statements of Cash Flows (Unaudited) for the Twenty-six Weeks Ended June 28, 2025 and June 29, 2024 7

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 8 ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 14 ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 21 ITEM 4.

Controls and Procedures

Controls and Procedures 22

OTHER INFORMATION

PART II. OTHER INFORMATION ITEM 1.

Legal Proceedings

Legal Proceedings 22 ITEM 1A.

Risk Factors

Risk Factors 22 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 ITEM 3. Defaults Upon Senior Securities 46 ITEM 4. Mine Safety Disclosures 46 ITEM 5. Other Information 46 ITEM 6. Exhibits 47 Unless the context requires otherwise, as used in this report, the terms "CarParts.com," the "Company," "we," "us" and "our" refer to CarParts.com, Inc. and its subsidiaries. Unless otherwise stated, all amounts are presented in thousands. Carparts.com , Kool-Vue , JC Whitney , Evan Fischer , SureStop , TrueDrive , DriveWire , and DriveMotive , amongst others, are our current and pending trademarks in the United States. All other trademarks and trade names appearing in this report are the property of their respective owners. Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS The statements included in this report, other than statements or characterizations of historical or current fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we intend that such forward-looking statements be subject to the safe harbors created thereby. Any forward-looking statements included herein are based on management's beliefs and assumptions and on information currently available to management. We have attempted to identify forward-looking statements by terms such as "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would," "will likely continue," "will likely result" and variations of these words or similar expressions. These forward-looking statements include, but are not limited to, statements regarding future events, our future operating and financial results, financial expectations, expected growth and strategies, our ability to acquire additional market sha

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CARPARTS.COM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited, In Thousands, Except Par Value Data) June 28, December 28, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 19,774 $ 36,397 Accounts receivable, net 7,536 6,098 Inventory, net 94,010 90,353 Other current assets 5,098 6,020 Total current assets 126,418 138,868 Property and equipment, net 28,437 32,206 Right-of-use - assets - operating leases, net 23,887 26,682 Right-of-use - assets - finance leases, net 8,950 10,765 Other non-current assets 1,892 2,053 Total assets $ 189,584 $ 210,574 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 51,501 $ 60,365 Accrued expenses 20,263 16,083 Right-of-use - obligation - operating, current 5,756 5,810 Right-of-use - obligation - finance, current 3,148 3,471 Other current liabilities 5,484 4,694 Total current liabilities 86,152 90,423 Revolving loan payable 10,000 — Right-of-use - obligation - operating, non-current 20,459 23,203 Right-of-use - obligation - finance, non-current 7,366 8,842 Other non-current liabilities 3,161 2,931 Total liabilities 127,138 125,399 Commitments and contingencies (Note 6) Stockholders' equity: Common stock, $ 0.001 par value; 100,000 shares authorized; 58,761 and 57,454 shares issued and outstanding as of June 28, 2025 and December 28, 2024 (of which 3,786 are treasury stock) 63 61 Treasury stock ( 11,912 ) ( 11,912 ) Additional paid-in capital 330,809 325,546 Accumulated other comprehensive income 1,055 1,055 Accumulated deficit ( 257,569 ) ( 229,575 ) Total stockholders' equity 62,446 85,175 Total liabilities and stockholders' equity $ 189,584 $ 210,574 See accompanying notes to consolidated financial statements (unaudited). 4 Table of Contents CARPARTS.COM, INC. AND SUBSIDIARIES CONSOLIDA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In Thousands, Except Per Share Data) Note 1 – Basis of Presentation and Description of Company CarParts.com, Inc. (including its subsidiaries) is a leading online provider of aftermarket auto parts and accessories. The Company sells its products primarily to individual consumers through its flagship website located at www.carparts.com , our app, and online marketplaces. Our corporate website is also located at www.carparts.com/investor . References to the "Company," "we," "us," or "our" refer to CarParts.com, Inc. and its consolidated subsidiaries. The Company's products consist of replacement parts serving the wear and tear and body repair market, hard parts to serve the maintenance and repair market, and performance parts and accessories. The replacement parts category is primarily comprised of body parts for the exterior of an automobile as well as certain other mechanical or electrical parts that are not related to the functioning of the engine or drivetrain. Our parts in this category typically replace original body parts that have been damaged as a result of general wear and tear or a collision. In addition, we sell an extensive line of mirror products, including parts from our own house brand called Kool-Vue , which are marketed and sold as aftermarket replacement parts and as upgrades to existing parts. The hard parts category is primarily comprised of engine components and other mechanical and electrical parts including our house brand of catalytic converters called Evan Fischer . These hard parts serve as replacement parts that are generally used by professionals and do-it-yourselfers for engine and mechanical maintenance and repair. We also offer other parts and accessories, which includes certain performance versions of many parts sold in each of the above categories, including parts from our own house brand, JC Whitney . Other parts and accessories is also comprised of parts that upgrade exist

View Full Filing

View this 10-Q filing on SEC EDGAR