Despite a disappointment on headline earnings, Carvana ( NYSE: CVNA ) shares surged over 10% higher in Thursday’s extended session.
The Arizona-based online auto retailer reported widening losses, lower-than-expected sales, and an erosion in gross profit per unit ( GPU ). Gross profit per unit fell $1,752 from the prior year quarter to $3,368 due to a myriad of impacts that included a $51 impact from a compensation gift to CEO Ernie Garcia III and staff reductions in May.
“The used vehicle industry continues to face high used vehicle prices, rising interest rates, and other macroeconomic pressures,” a shareholder letter read. “We believe the factors currently impacting used vehicle industry sales are transitory, and at some point, the headwinds we have seen this year will turn into tailwinds.”
Given the optimism, the company maintained its full-year outlook that anticipates significant reduction in debt and expenses as well as the achievement of over $4,000 total GPU and significant positive EBITDA in FY 2023.
Shares of the heavily-shorted eCommerce company rose 10% higher shortly after the print.
Read more on the company’s turnaround strategy .
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Carvana shares carry higher despite deeper losses, light revenue