CVNA - Carvana Stock Falls on Slowing Sales; Losses Are Expected to Continue
Carvana Stock ( NYSE:CVNA )
Shares of Carvana ( NYSE:CVNA ) dropped significantly during Thursday’s after-hours trading session as the company’s massive losses remained and unit sales slowed in the third quarter . On top of that, management hasn’t expressed much hope for a shift in the industry’s dynamics soon.
The Arizona-based used-car dealer reported a loss of $2.67 per share on sales of $3.39 billion, down 2.6% from the previous year. In addition to a revenue forecast that fell $300 million short, the per-share loss was also $0.50 more than expected. A total of 102,570 retail units were sold during the quarter, down 8 percent from the same period in the previous year.
Even though our sector is suffering significant challenges, we achieved tremendous progress in Q3 achieving operational efficiency. CEO Ernie Garcia praised the company’s efforts to cut costs and improve the customer experience. While the state of the economy remains unclear, we remain committed to our mission of leading the company to profitability. Even though advancement is seldom linear, we are still headed in the right direction and on track to become the country’s biggest and most profitable car retailer.
In his letter to Carvana stock shareholders, Garcia discussed SG&A costs, mentioning a target of $4,000 in SG&A costs per car as a stretch goal but noting that, given the present volume situation, the firm does not plan to attain this stretch goal on a per unit basis in Q4. Due to “lower used vehicle industry demand, increased benchmark financing rates, greater used vehicle depreciation rates,” and ongoing efforts to improve profitability, it is anticipated that r...
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