Carvana (NYSE: CVNA) shares plummeted in after-hours Thursday following the release of third-quarter earnings that missed earnings expectations. The stock fell over 7% following the news, closing at USD14.35 a share on Thursday.
The online car dealer reported an earnings loss of USD2.67 per share, compared to the expected loss of USD1.94 a share. Revenue amounted to USD3.39 Billion, lower than analysts anticipated USD3.71 Billion. Carvana’sgross profit fell 31% to USD359 Million from the previous year.
“We made significant progress in Q3 driving operational efficiencies despite the considerable headwinds facing our industry. Our committed team achieved notable cost reductions across our business while continuing to deliver exceptional customer experiences,” said Ernie Garcia, Carvana founder, and CEO. “This economic environment remains uncertain, but we are focused squarely on the goal of driving the business to profitability. While progress is rarely linear, we remain on the path to becoming the largest and most profitable auto retailer.”
On a call Thursday, Garcia stated that the next year would be “a difficult one” for the company, noting that used vehicles would begin normalizing from the previous inflated levels. Additionally, used vehicle dealers like Lithia Motors and AutoNation cautioned that the used vehicle market would soften when reporting their third-quarter results.