CarParts.com (NASDAQ:PRTS) reported second-quarter 2026 net sales of $135.6 million, down 10.7% from $151.9 million a year earlier, while adjusted EBITDA improved to positive $1.8 million from a loss of approximately $3.1 million in the prior-year quarter.
Chief Executive Officer David Meniane said the company’s adjusted EBITDA was its highest since the third quarter of 2023 and represented its sixth consecutive quarter of sequential improvement in the measures it is prioritizing, including customer acquisition efficiency, operational execution and cost control.
Margins Improve as Expenses Decline
Gross margin was $45.1 million, or 33.2% of net sales, compared with 32.8% in the second quarter of 2025 and 32.5% in the first quarter of 2026. Interim Chief Financial Officer Mark DiSiena attributed the improvement to favorable product mix and freight optimization.
The company reported a GAAP net loss of $3.2 million, narrowing from a $12.7 million loss a year earlier. DiSiena said the difference between GAAP net loss and adjusted EBITDA primarily reflected non-cash depreciation, amortization and share-based compensation.
Total operating expenses fell 22% year over year to $48.3 million from $62.2 million. According to DiSiena, the reduction was driven by improved marketing efficiency, fixed-cost reductions and warehouse productivity.
Management said it evaluates contribution margin dollars and profitability rather than reported gross-margin percentage alone. Meniane noted that the company’s expanding dropship partnerships can reduce reported gross margin percentage because fulfillment costs are accounted for differently than under its stock-and-ship model.
During the quarter, the company faced inflation, oil-price and tariff-related pressures on product and freight costs. Meniane said CarParts.com responded with real-time pricing actions designed to protect gross profit dollars, accepting some demand impact from higher prices.
A-Premium and JC Whitney Expansion
CarParts.com said its A-Premium partnership generated an annualized revenue run rate approaching $50 million, up from approximately $45 million exiting the first quarter. Management continues to see a longer-term opportunity for the partnership to exceed $100 million in annualized revenue.
Meniane said A-Premium revenue is more than twice as profitable as the company’s legacy owned mechanical revenue and requires virtually no inventory investment. The A-Premium catalog is approximately six times larger than CarParts.com’s private-label mechanical offering, according to management.
Private-label products accounted for approximately 76% of second-quarter revenue, down from 81% in the first quarter, reflecting growth in branded partnerships including A-Premium. Collision replacement parts represented about 63% of revenue, compared with 67% in the first quarter; DiSiena said the shift reflected growth in hard parts through A-Premium rather than weakness in the company’s core categories.
The company also said its JC Whitney products, with 7,000 SKUs live on Amazon, were generating an annualized revenue run rate of $2.5 million. Management expects that run rate to roughly triple in the short term as additional products from its 30,000-SKU catalog become available. CarParts.com also plans to launch JC Whitney products on its own website in the near term.
Over the medium term, Meniane said the company sees a path to $25 million in JC Whitney revenue at what it described as attractive margins and with limited inventory commitments.
Balance Sheet, Tariffs and Delivery Network
CarParts.com ended the quarter with $38 million in cash, no outstanding revolver debt and approximately $84 million in inventory, down from about $91 million at the end of the first quarter. During the quarter, the company entered into a $25 million revolving credit facility with First Business Bank that matures in March 2028. The facility remained undrawn as of the quarter end and the date of the call.
The company received $4.4 million in claims related to IEEPA tariffs, representing substantially all of the amount it had pursued through the formal U.S. Customs and Border Protection process. Of that total, $2.2 million was recognized during the second quarter and reinvested in targeted pricing and marketing initiatives. The remaining $2.2 million was included in inventory and is expected to flow through cost of goods sold as the inventory sells.
CarParts.com completed a one-for-10 reverse stock split effective May 26 to regain compliance with Nasdaq’s minimum bid price requirement. As of July 30, it had approximately 8.07 million common shares outstanding. Its convertible notes totaled $25.4 million and had a split-adjusted conversion price of $12 per share.
The company delivered more than 3,000 packages through its last-mile network during the second quarter, more than double the first-quarter level. It is operating next-day delivery for its own channel from two of four distribution centers and plans to expand to all four facilities. Management is targeting 300,000 packages annually, or roughly 5% of outbound volume, focused on large and bulky parts where outbound carrier costs are higher.
2026 Priorities
Owned channels, including the company’s e-commerce site, mobile app and commercial channels, represented approximately 70% of second-quarter revenue, up from 69% in the first quarter. Marketplace sales accounted for approximately 30%.
Mobile app revenue represented 14.2% of e-commerce revenue, up from 14% in the prior quarter. Revenue from mobile, email, SMS and push-notification retention efforts reached 10.5% of e-commerce revenue, compared with 10% in the first quarter.
Meniane said fee income from offerings including the CarParts.com Mastercard, CarParts+ membership and warranty products was approaching a $5 million run rate, up from more than $4 million discussed in the prior quarter.
For the remainder of 2026, management said it is focused on reaching positive free cash flow. Its stated operational markers include achieving a $50 million annualized A-Premium revenue run rate, exiting the year with JC Whitney at roughly a $7.5 million annualized run rate and products live on CarParts.com, and operating next-day delivery from all four distribution centers.
About CarParts.com (NASDAQ:PRTS)
CarParts.com, Inc operates as a leading online retailer of aftermarket automotive parts and accessories in the United States. Through its flagship website CarParts.com and affiliated e-commerce platforms, the company offers replacement components, performance upgrades, maintenance items and collision repair parts for a wide range of domestic and import vehicles. Its product catalog includes engine parts, exterior and interior accessories, lighting, braking systems and powertrain components, supported by an extensive inventory and proprietary order management system.
Founded in 1995 by George Chamoun and headquartered in Torrance, California, CarParts.com has grown from a regional auto parts supplier into a national e-commerce platform.
