Shares of Vroom Inc tumbled 14% on Wednesday, as the COVID-19 pandemic fueled a bigger-than-expected quarterly loss in the online used car seller’s first set of results since its blockbuster market debut in June.
Vroom also forecast third-quarter revenue of between $268 million and $290 million, while analysts on average had expected $344.6 million, according to Refinitiv data.
The company’s Texas Direct Auto segment sold 1,110 cars in the quarter, 60.2% lower than last year, due to government-mandated “stay-at-home” orders and coronavirus-led disruptions in the Houston area.
Vroom’s Chief Executive Paul Hennessy said the drop in demand and uncertainty around vehicle pricing early on in the pandemic led the company to significantly reduce its inventory during the first half of the quarter.
Excluding items, the company posted a net loss of 34 cents per share, compared with analysts’ expectation of a 7 cent loss.
However, Vroom’s e-commerce revenue jumped 45.2% as auto retailers increasingly turn to e-commerce to arrange for vehicles to be picked up or delivered without requiring customers to visit stores.
Vroom’s shares, which debuted on the Nasdaq in early June at an IPO price of $22 apiece, fell to $59.14 in extended trade.