Online used-vehicle retailer Carvana Co. closed out a difficult 2022 by further pulling back on growth endeavors, choosing instead to prioritize cost cuts and trimming inventory, as it continues to work to bolster profits.
That cost-cutting, coupled with weaker used-vehicle market conditions in the fourth quarter, led the retailer to post results that fell short of several analysts' expectations.
Carvana, of Tempe, Ariz., recorded a larger-than-expected fourth-quarter loss attributable to the retailer of $806 million, bringing its total losses for the year to about $1.6 billion. The retailer sold 412,296 vehicles in 2022 — 12,941 fewer than 2021 — marking the first time in its 10-year history that its annual retail sales dropped.
Carvana in 2022 was impeded in a big way by soaring inflation, interest rate spikes and vehicle affordability concerns that caused consumers' demand for used vehicles to wane. Its stock price plunged 98 percent last year while concerns also bubbled about the company's debt load, which stands at more than $8 billion. That figure includes $1.5 billion of floorplan debt.