Online used-vehicle seller Vroom said Wednesday that decreased demand and uncertainty around vehicle pricing in the early stages of the COVID-19 pandemic led the company to reduce inventory in the first half of the second quarter.
Vroom's second-quarter net loss widened to $63.2 million from $33.3 million during the same period last year. Adjusted earnings before interest, taxes and other adjustments in the quarter dropped to a loss of $39 million from a loss of $29.8 million.
Revenue slipped 3 percent to $253.1 million. It was Vroom's first quarterly earnings report since going public in June.
Vroom's total e-commerce revenue increased 45 percent to $175.6 million in the quarter.
Shares in Vroom were down 12.1 percent to $60.67 in midday trading Thursday. Its stock had gotten off to a speedy start after its initial public offering.
The company is now seeing more demand for used cars "than we can currently fulfill," CEO Paul Hennessy told Reuters Thursday.
"Even with an uncertain stimulus package, even with current unemployment levels, the demand is really strong," he said. "As the V-shaped recovery hit us in May, we've been doing everything in our power to add cars because customers want them."
Vroom said it expects third-quarter revenue of $268 million to 290 million. Analysts, on average, had expected a forecast of $344.6 million, according to Refinitiv data. Vroom forecast gross profit for the third quarter of $16 million to 18 million.
Hennessy said Thursday Vroom's forecast reflects the fact its average selling price has "come down a lot as a result of the pandemic."
Americans typically become more frugal and favor used cars in uncertain times.
"It is a lower revenue, but we’re expecting to make more dollars per unit than we thought," Hennessy said. "So the numbers that really matter -– the profit that we make from the car –- are intact."
Reuters contributed to this report.
