A Carvana Glass Tower illuminated on February 23, 2022 in Oak Brook, Illinois.
Armando L. Sanchez | Tribune News Service | Getty Images
Shares of an online used-car retailer caravan On Thursday, the company said its second-quarter results could come in ahead of its earlier expectations as cost-cutting measures take hold.
Shares soared 56% during the trading session.
The company said it now expects to report adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, of more than $50 million in the second quarter of 2023. Base.
Caravana said it also expects gross profit per unit, or GPU, to be above $6,000 in the second quarter. This will be a new company record and a growth of over 60% from the second quarter of 2022.
The company posted a GPU of $4,303 in the first quarter of 2023, up 52% from a year ago.
Caravana’s most recent guidance called for May positive adjusted EBITDA and second quarter adjusted gross profit of $5,000 per unit.
Shares of Carvana jumped on Thursday after the company boosted its second-quarter guidance.
The company’s shares took a beating during the pandemic as buyers turned to online sources for used cars. The company borrowed heavily to meet demand — but last year it found itself in a huge hole, as interest rates began to rise and car prices softened. It responded with an aggressive cost-cutting effort.
Carvana stock fell nearly 98% in 2022 but has clawed back significant ground in recent months: Through Thursday’s close, it’s up more than 400% since its 2023 debut.
“The team’s continued focus on driving profitability has resulted in significant savings and efficiencies and will continue to do so,” CEO Ernie Garcia said in a statement Thursday. “Our progress is having a positive impact on the business faster than expected.”