Carvana bolsters cost-saving advice and shares soar

Key Points

Carvana said its cost-cutting measures were working and raised its guidance for the current quarter.
The online used-car dealership expects EBITDA of more than $50 million, as analysts expected a loss.
Shares rose more than 65% in intraday trading on Thursday to hit their highest level in more than eight months following the news.

Carvana (CVNA) shares soared in Intraday trading skyrocketed more than 65% on Thursday after the online used-car dealership raised its outlook, citing the success of its cost-cutting efforts.

Carvana said it expects current-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) to be more than $50 million. Analysts had expected a loss of $6.1 million.

The retailer also predicted non-GAAP total gross profit per unit (GPU) to exceed $6,000, which would be an all-time high and 63% above the second quarter of last year. Its previous GPU record was set last quarter.

Founder and CEO, Ernie Garcia said the record first quarter was proof that the company's strategy was working, and the updated second quarter guidance “demonstrates that our progress continues to have a positive impact on the business.” company even faster than expected”.

He added that “persistence A focus on improving profitability has resulted in significant cost savings and efficiencies, and this work “will continue as we continue to execute our plan.”

Carvana should publish its second quarter results the first August week.

Carvana shares soared to their highest level in more than eight months following the news.