CarParts.com Refocuses on Profitable eCommerce Growth

The shift toward buying auto parts online continues to reshape the aftermarket. For CarParts.com, that shift now centers on disciplined, profitable growth instead of pure volume.

The company’s third quarter underscored an ongoing transition built on partnerships and selective marketing.

Strategic Partnerships

Chief Executive Officer David Meniane told investors that CarParts.com concluded its strategic review this year with a $35.7 million investment from A-Premium, ZongTeng Group and CDH Investments.

Through ZongTeng, CarParts.com gains access to a U.S. logistics network of more than 50 facilities. Meniane said during the conference call Monday (Nov. 10) that the collaboration “eliminates the need to open additional distribution centers,” allowing the company to reduce delivery times and lower fulfillment costs by using ZongTeng’s automated capabilities for smaller products.

The partnership with A-Premium adds more than 100,000 SKUs, including exclusive kits and bundles that expand the company’s offering for both consumers and professional installers. Meniane said sales from that catalog are trending at a $20 million annualized run rate and could reach $50 million in the near term, with potential to exceed $100 million over time.

Management contended the joint efforts would strengthen the company’s assortment, logistics reach and capital base for what Meniane described as sustainable, profitable growth.

Investors sent the shares down 11% in trading on Tuesday.

Consumer Spending and Market Conditions

Meniane said consumer demand remains uneven as inflation and tariffs continue to pressure pricing and costs. Roughly 20% of the company’s private-label products are imported from China, with tariffs between 55% and 75%. Products from Taiwan face about 25%. He said CarParts.com is managing these headwinds through vendor negotiations, dynamic pricing and supply chain optimization.

“We are comfortable with our inventory position, but given how quickly conditions are changing, we continue to monitor developments closely,” Meniane said. He added that diversification of sourcing remains key to mitigating volatility.

CFO Commentary and Results

Chief Financial Officer Ryan Lockwood reported third-quarter revenue of $127.8 million, down 12% from $144.8 million a year earlier. He said the decline reflects a deliberate cutback in paid marketing to improve profitability. Advertising costs fell from 17.7% of gross sales in January to 12.5% by September, which helped increase contribution margins by more than 300 basis points.

“While we are giving up some revenue, the strategic changes we’ve made to increase profitability are trending in the right direction,” the CFO said.

Outlook and Focus Ahead

Meniane said the company will continue expanding the A-Premium catalog, monetizing its 100 million annual website visits and growing its mobile app, which now accounts for more than 13% of eCommerce sales. The CarParts+ membership program has reached 8,000 members with an annualized fee-income run rate near $4 million.

He said CarParts.com’s transformation is a multiyear effort grounded in automation and AI-driven personalization. “We expect these efforts to become more visible over the next year,” he said, emphasizing the goal of reaching free cash flow break-even in 2026.

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