joining me now is David Minyan Ceo of car parts
dot com. David, your company reported record quarterly
sales$176.2 million of 12% year over year? What
were some of the main drivers behind the company's growth
this quarter? Hey Alicia, thanks for having me
. Hey, listen, I think it's been great
execution by the whole team. It's up 44% on
the two year stack. We've been making a lot
of investments in the business for the last three years
. We've been loading up, uh, an inventory
through the whole global supply chain disruption and just focusing
on the customer and high quality parts, competitive prices
and just execution. Car parks dot com reported its
10th consecutive quarter of year, over year sales growth
. Is this the growth that you're seeing, um
, as a picture of what is happening in the
broader auto industry, especially over the better part of
the last year. Yeah, what we're seeing is
just an acceleration of online penetration. Um, you
know, I don't know if you know, but
the, the aftermarket industry is a$300 billion 300
million cars on the road and all these cars need
parts, the average age of a car on the
road is to 12.2 years. So the, the
other thing too is that the online penetration, the
amount of purchases that remain online is actually significantly lower
than most industries. So what we're seeing is that
as we continue to make investments in the business,
that acceleration online is growing? I'm always fascinated behind
the why? right? Why are we seeing that
growth? Is it something that, that birth a
little bit or accelerated, you know, further through
the pandemic and, and, and under the inflationary
pressures. I mean you try to get a new
car right now, good luck. Eh, the
prices are high or they're still supply change issues that
are, that are making it difficult to actually get
one in your hands in a reasonable time. So
it seems like people are holding onto those cars,
their cars even longer than historically in the past.
Is that the case of what you're seeing and if
so, how long do you expect that to last
? Yeah, 100%. You're absolutely right. So
consumers are holding onto their cars longer and in order
to keep them on the road, they need to
buy parts and accessories. What we're also seeing is
that the consumer right now is getting squeezed. You
look at gas prices, you look at interest rates
, you look at the cost of first necessities and
if there's An opportunity for the customer to save money
, a company like us, we offer a great
solution. It's the same quality parts as a brick
and mortar, but we're 3040, sometimes 50% cheaper
because of our supply chain. So the direct to
consumer model gives the consumer an option to get more
competitive prices. So on one hand, those inflationary
pressures on the new car market or even the supply
chain disruptions and issues, they are benefiting you guys
. But I wonder on the other hand, when
it comes to inflation, you're not completely immune to
it? How is that impacting prices? And I
think you've pointed to a moment ago how you're mitigating
that with that direct to consumer model? Yeah,
I think every retailer and every consumer is facing some
, you know, some part of inflation for us
, it's, you know, the cost of goods
, the transportation cost, the labor cost and we
just got to find efficiencies through the supply chain.
We got to work with our vendors to get the
most competitive price. And what we do is we
try to take those savings and pass them on to
the consumer. Now the prices of parts and the
prices of everything are going up. But what we
try to do is be more competitive than everyone else
and still generate that demand and help the consumer get
back on the road. Obviously, most of the
cars that are on the road right now are traditional
combustion engine vehicles, they're also traditionally like longer vehicles
, vehicles that have been on the road for quite
some time, that's a dominant part of your market
and certainly where you seem to thrive. I wonder
though with the growth and demand for electric vehicles kind
of hitting the market and accelerating over the last two
years and then into what is going to be the
immediate future? How do you view the transition to
e v, is it a tailwind or a headwind
for your business in your company? I think it's
an opportunity and we've seen that transition through the numbers
, you're absolutely right. The number of EVs on
the road is growing and that trend is not going
to stop. You know, for us, 90%
of the parts that we sell are agnostic to the
powertrain and what that means is that whether you have
a combust engine or an electric vehicle or a hybrid
, we can fulfill those parts. Ultimately, what
we sell is what the customer needs and we source
the parts based on the vehicles that are on the
road. So for us and for me personally,
TVs hybrid are a huge opportunity for a company like
us. Speaking of that opportunity last year, your
company launched a marketplace for e V s and hybrid
vehicles. Do you see the demand for E V
parts growing in the future as more people transition to
electric vehicles? And I wonder what's the timeline for
true growth because if you're, you're purchasing an electric
vehicle, it's likely new and it's gonna last you
a few years I think or you would hope before
you kind of need some parts for it. Yeah
, that's a great question. And so for us
, our sweet spot, our cars between eight and
15 years old. So we have a lot of
time to prepare for this as the number of E
. V. S kind of accelerates and the sales
accelerate. We got, you know, 789 years
behind, but we're already starting to put all the
pieces together on, on the supply side on the
car parts dot com slash tv. The hub.
We're providing consumers information about how to keep their cars
on the road and definitely sourcing newer parts, uh
, for Priuses and Chevy volts and you know,
you know, Tesla is definitely a big opportunity,
but that's a couple of years away. Before I
have to let you go here, just walk us
through your guidance for the rest of 2022. What's
your outlook, you know, then also more broadly
for the auto repair market? Yeah, our,
our guidance is pretty specific. What we've said is
that for the back half of the year we're gonna
grow double digit year over year and I think what
we wanted to do was send a signal to the
street that yes, the consumer is getting squeezed.
Yes, it's a challenging environment. But a company
like us, because of all the investments that we've
made, we're gonna continue executing in the back half
of the year and deliver really strong results, both
on the top line and profitability and actually that was
my last question, but I've got one more for
you just to kind of be on balance here in
terms of headwinds, there's certainly seems like there's a
lot of tail winds moving forward and you're enjoying a
lot of tailwinds coming out of the pandemic, but
we know things are shifting rapidly. You know,
there's a lot of focus on the macroeconomic environment in
terms of possible headwinds. What do you see as
those possible headwinds and how are you mitigating around that
? Yeah, I think number one is the overall
consumer sentiment and the amount of discretionary income that consumers
have again, you know, the consumer is getting
squeezed. You know, the price of milk and
eggs and bread has gone up, the price of
gas has gone up, Interest rates are going up
, so consumers have less money in their pocket and
it's our job and companies like us to figure out
a way to provide more value at more competitive prices
. And for us it's a relentless focus on execution
and efficiencies to still meet the customer needs. David
, really appreciate your time and your insight. David
, Mannion Ceo of car parts dot com