PRTS · CarParts.com, Inc.

CarParts.com's Q1 2026 results mark a significant turnaround in profitability metrics despite a 10% decline in net sales to $132.0 million, primarily from deliberate reductions in marketing spend to prioritize higher-quality customer acquisition. Gross margin improved to 32.5% from 32.1%, supported by favorable product mix and lower freight costs, partially offsetting the topline pressure. Operating expenses fell sharply 26% to $46.0 million, driven by headcount reductions, lower marketing, and a $2.3 million gain from the sale of the Philippines subsidiary on January 27, 2026. This led to Adjusted EBITDA of $0.585 million, the first positive quarter since Q1 2024 and a $6.8 million swing from the prior year, reflecting CEO David Meniane's emphasis on P&L discipline across advertising, operations, and fixed costs. Balance sheet remains solid with $37.9 million cash, no revolver debt, and $25.3 million convertible notes. Strategic highlights include a $8.0 million investment closure, A-Premium run-rate nearing $45 million, JC Whitney SKUs live on Amazon, new Mastercard launch, Taipei office for 70% of purchases, and AI systems Spark/Zaap operational. Management views physical infrastructure—distribution, last mile, supply chain—as the competitive moat amid AI-driven digital commoditization, targeting 300,000 packages via last-mile network over 12-24 months. No forward guidance provided, but path to free cash flow emphasized through controlled levers.