Carvana Co. reported a net loss of $47.2 million for the fourth quarter of 2017, widening from a year-earlier loss of $35.7 million, the used-vehicle retailer known for its vehicle vending machines said in a statement released after the close of markets Tuesday.
CEO Ernie Garcia, in a call with analysts, said the fourth quarter was great by "any reasonable measure," while adding in the statement that 2017 was "another year of tremendous growth and progress for Carvana."
Yet vehicle sales and revenue for both the fourth quarter and 2017, as well as the size of the net loss, were worse than analysts had expected.
"More importantly, the 2018 guidance was below expectations," Wells Fargo analyst David Lim wrote in a report. "That said, we like the name for its long-term potential."
Carvana shares fell 6.5 percent to close at $17.46 on Wednesday.
Cyber Monday woes
Carvana's vehicle sales more than doubled in the fourth quarter, to 13,517 vehicles from 5,600 a year earlier, but that was below the company's previous guidance to analysts of 13,600 to 15,000. The company blamed an underwhelming Cyber Monday. "That noise was completely self-inflicted," Garcia said in the conference call. "That said, it was noise."
Revenue also missed the mark, despite more than doubling to $265.1 million in the fourth quarter from $106.8 million a year earlier.
For the full year, the Phoenix company sold 44,252 retail vehicles, falling short of its projections of 44,300 to 45,700. Revenue more than doubled from the prior year to $858.9 million.
Meanwhile, customer acquisition costs are decreasing for the retailer. Citing operational improvements, the company said it is spending less money on advertisements and is opening in new markets more quickly.
New markets
Carvana opened for business in five new markets in the fourth quarter, bringing the total number of markets to 44 at the close of 2017. So far in 2018, Carvana has opened in another 10 markets.
Five car vending machines also were added in 2017, bringing the company total to seven.
Carvana expects to sell 89,000 to 93,000 vehicles in 2018 and open in 30 to 40 new markets.
You can reach Jackie Charniga at jcharniga@crain.com
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