CarLotz Inc (NASDAQ:LOTZ) issued a company update that's sending shares down sharply on Wednesday morning.
The company filed a Form 8-K with the Securities and Exchange Commission stating that the Company’s profit-sharing corporate vehicle sourcing partner informed the Company that, in light of current wholesale market conditions, it has paused consignments to the Company.
During the three months ended March 31, 2021, this sourcing partner accounted for more than 60% of the cars sold and sourced and, for the second quarter to date, accounted for less than 50% of the cars sold and approximately 25% of cars sourced.
A leading corporate vehicle sourcing partner for the used vehicle marketplace company has paused consignments to the company.
In the first three months of 2021, this sourcing partner represented 60% of all cars sold and sourced by CarLotz. In the second quarter to date, the consignment partner represented less than 50% of cars sold and 25% of cars sourced by CarLotz.
"The surge in wholesale vehicle prices and the continuing new car chip shortage continues to place limitations on inventory sourcing throughout the industry," said CarLotz CEO Michael Bor.
Bor said the company is taking steps to address the loss of vehicles through items like consumer consignments, trade-ins and consumer purchases.
As far as outlook goes, for the full year 2021, the Company expects the following results.
This 2021 outlook assumes that, in the second quarter of 2021, the Company will sell greater than 2,000 retail units and will achieve a gross profit per unit of at least $1,800.
LOTZ shares plummeted 93 cents or 17.8% to $4.29 soon after Wednesday’s open.
