Carvana Co. rode a continued wave of demand for used cars to nearly double its quarterly revenue, but as it snapped up more vehicles to build its inventories it ran against “significant operational constraints,” the online used-car retailer said Thursday.
said it lost $32 million, or 38 cents a share, in the third quarter, compared with a loss of $7 million, or 10 cents a share, in the year-ago period.
Revenue rose 125% to $3.48 billion, the company said. FactSet consensus called for a loss of 27 cents a share on sales of $3.3 billion.
Buying more cars from customers leads to more last-mile pickups, more customer care interactions, and more complex title-processing requirements, which in turn leads to more complex registration processing, Carvana said in a letter to shareholders.
“Despite these constraints, we are now buying and selling over (three times) as many cars as we were two years ago, and our team is hard at work unlocking additional capacity,” the company said.
Demand for used cars amid a low inventories have pushed used-car prices higher throughout the pandemic. The average used-vehicle price is around $30,000, up about 30% year-on-year.
The stock was flat in the extended session Thursday after ending the regular trading day down 0.3%. Shares of Carvana have gained more than 25% this year, compared with an advance of around 24% for the S&P 500 index