Shift Technologies Q3 losses widen to $76 million

Shift Technologies Inc. said it recorded a wider net loss and decreased revenue in the quarter ending Sept. 30, but made progress in executing on a business restructuring plan it announced in August.

The San Francisco-based online used-vehicle retailer reported a net loss of $75.8 million in the third quarter. That is larger than its second-quarter loss of $52.2 million and larger than the $37.389 million loss it posted in the third quarter of 2021.

Shift Technologies said its total revenue fell to $161.9 million in the quarter, down 10 percent year-over-year. It retailed 4,855 vehicles via its e-commerce channel, down 25 percent year-over-year from 6,487. Shift recorded a $529 profit for each e-commerce vehicle it sold, down 54 percent from $1,150 a year ago.

"The third quarter was a transition period for the company as we pursued our new strategy," Shift CEO Jeff Clementz said Tuesday on a quarterly call with investors and analysts. "The new operating plan prioritizes accelerated profitability and lower cash burn, though at lower unit volumes."

Shift eliminated its test drive offering and focused on selling through its online checkout channel in the third quarter — key parts of its previously announced restructuring plan, Clementz said. The company also further shifted its inventory mix to skew toward value vehicles, which it defines as vehicles older than eight years or those that have more than 80,000 miles. Half of Shift's mix is now considered value vehicles, Clementz said.

The restructuring also included cutting the number of hub locations from 10 to three to give the company the ability to focus on its West Coast presence in the third quarter. Clementz previously told Automotive News that the retailer's hubs in Los Angeles, Oakland, Calif. and Portland, Ore. remain open.

Shift Technologies' shares fell 11 percent to 41 cents in Wednesday morning trading.

In August, Shift Technologies also announced it had agreed to a stock-for-stock merger with CarLotz, a used-vehicle consignment company. Shift Technologies and CarLotz will hold a special meeting via webcast on Dec. 7 to allow their stockholders to vote on key proposals of that merger agreement, according to a document filed Tuesday with the U.S. Securities and Exchange Commission.

Q3 total revenue: $161.9 million, down 10 percent from a year earlier.

Q3 net loss: $75.8 million, wider than its loss of $37.389 million a year earlier.

Q3 e-commerce vehicles sold: 4,855, down 25 percent.

Q3 gross profit per e-commerce vehicle: $529, down 54 percent.