Vroom’s latest quarterly results showed continued strength in used vehicle eCommerce sales, but a pinch on margins as the firm’s pricing of those vehicles was not enough to offset higher acquisition costs.
At this writing, in intraday trading on Tuesday (March 1), the company’s stock was down roughly 40% to all-time lows of about $3.55.
Drilling into the fourth-quarter numbers , eCommerce units sold increased 92.7% to 21,243. Management stated that the demand for used vehicles remains strong — in part due to the continued shortage of microchips and delays in new car manufacturing, which in turn, we note, constrain the availability of newer vehicles.
The company is forecasting sales of between 18,000 to 19,000 vehicles in the current quarter, where last year that tally stood at 15,504 eCommerce units sold.
In the most recent period, Average monthly unique visitors to Vroom’s platform increased 132.9% to 2.3 million, per the company’s release. The company’s total e-commerce revenue increased 159.2% to $738.7 million, and of that eCommerce vehicle revenue increased 160.7% to $715.9 million.
But though the average selling price per unit increased to $33,699 in the latest period from $24,909 last year, gross profit per eCommerce vehicle unit slipped to $473 from $878 last year. As detailed in supplemental materials from the company and management commentary, acquisition costs for premium vehicles were higher, and reconditioning were higher too, tied to labor shortages.
The company said that selling, general and administrative expenses to continue to increase in the future “as we continue to scale our business” and invest in its newly-acquired capital business.
Retail Units From Consumers During the conference call with analysts, CEO Paul Hennessy said that 76% of the retail units sold in the fourth quarter came directly from consumers, up from 40% in 2020, and said the company has “already hit our last […]
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