Carvana expects a record third quarter across several metrics, reflecting how well-positioned the online used-vehicle retailer has been for the effects of the coronavirus pandemic on the market.
Carvana said in a release Tuesday it expects to post company records in retail vehicle sales, total revenue, total gross profit per vehicle and EBITDA margin in the third quarter. The company, which has not posted a net profit since going public in April 2017, said it also expects to be approximately breakeven in earnings before interest, taxes, depreciation and amortization for the quarter.
The pandemic forced many dealers into online-only sales and temporarily sapped used-vehicle sales in March and April. But used-vehicle sales have since rebounded on pent-up demand and low new-vehicle inventory.
In May, Carvana told investors it had seen a sales trough in early April — about a 30 percent decline — but had since enjoyed a swift improvement in business. That improvement apparently continued through the summer.
“The momentum that we saw in the second quarter accelerated into the third, leading to record performance for Carvana in metrics that demonstrate strong progress both in growth and towards profitability,” Carvana CEO Ernie Garcia said in the release.
Shares of Carvana surged 34.5 percent to $233.53 in midday trading Tuesday.
Also on Tuesday, Carvana said it planned to offer up to $1 billion in senior notes, including $500 million due 2025 and $500 million due 2028. A portion of the proceeds will go toward redeeming $600 million in outstanding senior notes due 2023, with the balance going to pay fees and other expenses related to the offering and also for “general corporate purposes,” the company said.
