CarParts.com (PRTS) Q2 2026 earnings summary

Executive summary

• Net sales for Q2 2026 were $135.6 million, down 10.7% year-over-year, primarily due to profitability initiatives and reduced marketing spend on lower-margin customers.

• Adjusted EBITDA reached $1.8 million, the highest since Q3 2023, marking six consecutive quarters of improvement in profitability and operational efficiency.

• Net loss narrowed to $3.2 million, a significant improvement from $12.7 million in the prior year quarter.

• Strategic initiatives included a new fulfillment center in Las Vegas, expanded product assortment, and a long-term partnership with A-Premium for 150,000 additional SKUs.

• Completed a 10-to-1 reverse stock split, regaining Nasdaq compliance.

Financial highlights

• Gross margin expanded to 33.2%, up 40 basis points year-over-year and 70 basis points sequentially, with gross profit at $45.1 million.

• Operating expenses reduced to $48.3 million, down 22% year-over-year, driven by lower marketing and payroll costs.

• Cash and cash equivalents increased to $38.2 million as of July 4, 2026, with no revolver debt outstanding.

• Inventory reduced to $83.9 million, reflecting dropship growth and improved inventory management.

• Net cash provided by operating activities was $10.6 million for the first half of 2026.

Outlook and guidance

• Targeting sustainable free cash flow positive in 2026, with focus on scaling A-Premium and JC Whitney partnerships.

• Management expects existing cash, investments, and available debt financing to be sufficient for operational needs through at least the next twelve months.

• Key near-term goals: A-Premium at $50 million annualized run rate, JC Whitney at $7.5 million, and next-day delivery from all four distribution centers.

• Expecting further revenue growth to increasingly translate into earnings and cash flow.

• Continued improvement in operational execution and cost control is anticipated.