Cazoo Share Price Fell 1.62% on Its Q3 FY 2023 Earnings Results

The Cazoo Group Ltd (NYSE: CZOO)stock price fell 1.62% after the UK online user car retailer announced its financial results for the three months ended September 30, 2023. The company generated revenue worth £173 million, in line with expectations, reflecting a focus on unit economics.

The company sold 9,525 retail units, showcasing the success of the fully online proposition. Retail Gross Profit Margin (GPU) increased by 14% Quarter over Quarter (QoQ) and an impressive 201% Year over Year (YoY), reaching £1,470 compared to £488 in Q3 2022. 

Cazoo’s gross profit amounted to £11 million versus £10 million in Q3 2022, supported by the higher Retail GPU despite a lower volume of units. Gross margin improved to 6.5%, a 3.5 percentage point increase from Q3 2022. Ancillary revenue per retail unit sold rose to £735, a 29% YoY increase compared to £568 in Q3 2022 and £848 in Q2 2023.

The finance attachment rate reached 49.8% compared to 43.1% in Q3 2022 and 53.2% in Q2 2023. The restructuring undertaken in Q1 2023 delivered annualised cost savings of £100 million, with an additional £20 million of cash savings identified in Q2 2023.

Cash and cash equivalents amounted to £151 million as of September 30, 2023, versus £258 million on December 31, 2022. Self-financed inventory stood at approximately £35 million as of September 30, 2023 (December 31, 2022: approximately £75 million).

The company updated its total unit sales for 2023 to between 50,000 and 52,000 total units, with 40,000 to 42,000 being retail units. The full-year retail GPU is expected to approach £1,250, while the 2023 Retail GPU exit rate should be at approximately £1,400.

Paul Whitehead, Chief Executive Officer of Cazoo, commented: “I am very pleased with our results in the third quarter of 2023, where we continued to build on our track record of delivering on our targets. Through our continued focus on unit economics, we maintained the quarter-on-quarter improvement in Retail GPU and reached a new record of £1,470. Despite the challenging economic environment with increased interest rates and higher costs of living, our online value proposition continues to appeal to consumers as we sold 9,525 retail vehicles in Q3 and delivered further improvement in Retail GPU, which was up 14% quarter-on-quarter and 201% year-on-year. Average Retail GPU for the first nine months of 2023 was £1,215.”

Cazoo stock price. 

The Cazoo stock price was trading down 1.62% at $0.4427 from Tuesday’s closing price of $0.4500.