Reuters- Carvana Co forecast significant core earnings for 2023, as the online used-car retailer said plans to rein in spending on advertising, expansion and other areas to offset waning demand.
The company's car vending machines shares were up 12.9% after the bell.
The outlook came days after Carvana said it would lay off about 2,500 employees or 12% of its workforce as part of its efforts to return to profitability after poor quarterly performance.
Demand for used cars has waned due to sky-high prices and supply shortages with Carvana saying it did not see the typical seasonal demand during the first quarter of this year.
Carvana, which recorded about $220 million in capital expenditure for the first quarter, plans to slash its budget every quarter until it reaches $50 million in the fourth. It plans to keep that figure up each quarter, so it could post positive EBITDA for 2023.
The company said it would reduce its selling, general and administrative expense per car sold and maintain a balance between sales volumes and staffing levels.
Carvana raised $1.25 billion in an equity offering last month, losing half of its value since.