JXCE Carvana Q1 Retail Sales Projection Summary

Carvana demonstrated another strong quarter of growth, but the first quarter will go down as a quarter of "what could have been". While the JXCE projection for Q1 retail sales is 187,400 and the projection for new car sales eclipses 2,000 units, Carvana's year-over-year comps worsened throughout the quarter. Carvana started quite strong in January, with very favorable growth metrics that suggested eclipsing 200,000 retail units in Q1 was a real possibility. However, year-over-year comparables worsened throughout the quarter, exacerbated by two snowstorms that nearly halted sales on the East Coast. The January snowstorm resulted in negative year-over-year comps for that week, while the February snowstorm impacting the East Coast reduced sales, leading to lesser year-over-year gains.

The average list price of sales increased this quarter, but these ASP gains should be offset by an increase in retail marketplace sales as a percentage of overall sales (assuming no change in revenue recognition policy). Inventory age notably improved by the end of the quarter, while days to sale and order processing time remained flat quarter-over-quarter after the snowstorms negatively impacted them. Deliveries per location improved this quarter after declining last quarter.

Moving forward, specific market segment performance is a thing to watch. Atlanta, one of Carvana's flagship markets, has notably underperformed. This underperformance is not unique to Atlanta and is covered in greater detail in JXCE Research Reports provided to customers. Individual market performance shows a notable divergence. Also, this quarter marked another consecutive quarter where Carvana Vending Machines underperformed traditional delivery centers. This will be covered in greater detail in a future blog post.

Disclaimer: This content is subjective in nature. Data is gathered by daily monitoring of Carvana retail web pages. Recent retail unit sales projections have been accurate within 0.5%, with historical accuracy within 1%. This content is provided for informational purposes only. JXCE is not a registered investment advisor in any jurisdiction and does not hold financial positions in the companies covered.