(Reuters) – Carvana Co said on Thursday it expects to post a profit in the current quarter, as its cost actions helped the used-car retailer to mitigate some impact of a decline in sales.
Shares of the company rose 26% after the bell.
The debt-laden company has taken a series of steps, including job reductions, over the past year to cut costs as it struggles to sell cars acquired at elevated prices, with buyers hit by inflation and worried about a recession cutting spending.
Carvana said its adjusted earnings before interest, taxes, depreciation, and amortization, (EBITDA) are expected to be positive in the second quarter.
“It is clear our strategy and execution are working as evidenced by our 61% increase in gross profit per unit, the best first quarter GPU in company history,” said CEO Ernie Garcia.
Carvana’s first-quarter net loss narrowed to $286 million from $506 million a year earlier.
Its revenue fell 25.5% to $2.61 billion.
(Reporting by Aishwarya Nair in Bengaluru)
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