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 the sixth consecutive quarter of improvement and a $4.9 million year-over-year gain.

• Net loss narrowed to $3.2 million, or $0.43 per share, compared to a net loss of $12.7 million, or $2.27 per share, in the prior year quarter.

• Strategic initiatives included a 10-to-1 reverse stock split, regained Nasdaq compliance, a new fulfillment center in Las Vegas, and expanded product assortment through the A-Premium partnership.

• Six consecutive quarters of improvement in customer acquisition efficiency, operational execution, and cost control.

Financial highlights

• Gross profit was $45.1 million with a gross margin of 33.2%, up 40 basis points year-over-year and 70 basis points sequentially.

• Operating expenses reduced to $48.3 million, down 22% year-over-year, driven by lower marketing and payroll costs and a gain on sale of the Philippines subsidiary.

• Adjusted EBITDA positive at $1.8 million, up from a loss of $3.1 million year-over-year.

• Cash and cash equivalents increased to $38.2 million as of July 4, 2026, up from $25.8 million at the start of the year.

• Inventory was $83.9 million as of July 4, 2026, down from $91 million sequentially.

Outlook and guidance

• Management expects continued improvement in operational execution and cost control, targeting sustainable free cash flow positive in 2026.

• A-Premium partnership annualized revenue run rate is approaching $50 million, with a longer-term target exceeding $100 million.

• Fee income from Mastercard, membership, and warranty products is nearing a $5 million annualized run rate.

• Last mile network aims to deliver 300,000 packages annually, representing about 5% of outbound volume.

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