Used vehicle marketplace company CarLotz Inc LOTZ issued a company update that's sending shares down sharply on Wednesday morning.
What Happened: A leading corporate vehicle sourcing partner for CarLotz has paused consignments to the company.
In the first three months of 2021, this sourcing partner represented 60% of all cars sold and sourced by CarLotz. In the second quarter to date, the consignment partner represented less than 50% of cars sold and 25% of cars sourced by CarLotz.
“The surge in wholesale vehicle prices and the continuing new car chip shortage continues to place limitations on inventory sourcing throughout the industry,” said CarLotz CEO Michael Bor.
Bor said the company is taking steps to address the loss of vehicles through items like consumer consignments, trade-ins and consumer purchases.
Related Link: Exclusive: CarLotz CEO Discusses Company's Growth Advantages On SPACs Attack
What’s Next: CarLotz is guiding that it will open 14 to 16 hubs in the current fiscal year. The openings for the second half of the year will happen later than originally anticipated.
“The 2021 contribution from those hubs will be less than previously anticipated due to the timing,” Bor said.
CarLotz is guiding to sell 13,000 to 15,000 units for the full fiscal year, a 100% year-over-year increase.
The company sees full fiscal year revenue hitting a range of $272 million to $317 million.
Previous guidance given by the company called for 18,000 to 20,000 units sold for the full fiscal year and revenue to come in a range of $335 million to $375 million.
Price Action: Shares of CarLotz are down 19% to $4.22 at publication time.
Watch Benzinga's recent interview with Michael Bor here.
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