CarParts.com, Inc. Annual Report on Form 10-K: Investor Key Takeaways

Executive Summary

CarParts.com, Inc. (Nasdaq: PRTS) has released its Annual Report on Form 10-K for the fiscal year ended January 3, 2026. This comprehensive report provides critical updates on the company’s financial health, business operations, risk factors, and strategic outlook. Investors should pay close attention to several developments and disclosures that have the potential to impact share value.

Key Financial and Operational Highlights

• Share Information:
  – Common stock, \$0.001 par value per share, is listed on the Nasdaq Stock Market LLC under the symbol “PRTS”.
  – As of February 26, 2026, there were 70,477,662 shares of common stock outstanding.
  – The aggregate market value of common stock held by non-affiliates as of June 27, 2025, was not disclosed but is an important reference for valuation.
• Current Status:
  – The company is a non-accelerated filer, a “smaller reporting company,” and not an emerging growth company.
  – CarParts.com is up to date with all required SEC filings and has submitted all interactive data files as required.
• Business Overview:
  – CarParts.com operates an eCommerce platform for aftermarket auto parts, with a focus on broad product selection, competitive pricing, and a mobile-first user experience.
  – The company emphasizes its position in the fast-evolving online automotive aftermarket.

Risks and Price-Sensitive Disclosures

Shareholders should be aware of the following potentially price-sensitive disclosures:

• Recent Net Losses and Ongoing Profitability Concerns:
  • CarParts.com recorded a net loss for fiscal year 2025 and warns that net losses may continue into the future. Continued losses could severely impact liquidity, ability to fund operations, and may force the company to seek additional financing or consider asset sales, restructuring, or even bankruptcy if conditions worsen.
• Credit Facility Restrictions:
  • The company’s operations are restricted by covenants in its Amended Credit Agreement with JPMorgan Chase. This includes limitations on incurring additional debt, making investments, paying dividends, repurchasing equity, and entering into new lines of business. The borrowing base is subject to fluctuations, and a decline could force immediate loan repayments and severely impact liquidity and operations.
• Impairment Charges:
  • CarParts.com recorded a \$3.69 million impairment loss on long-lived assets during the year ended January 3, 2026. Management warns that additional impairment charges may be necessary if business conditions worsen, which would further impact earnings and shareholder equity.
• Risks Related to Operations and Industry:
  • The company is highly dependent on third-party suppliers, particularly in Taiwan and other Asian countries. Disruptions in supply chain, tariffs, or geopolitical tensions could materially affect operations and cost structure.
  • Higher wage costs, shifting online consumer behavior, and the need to maintain broad inventories at competitive prices are cited as ongoing business risks.
  • Seasonality affects financial performance, with potential for material impact in future periods.
• Technology and Regulatory Risks:
  • The company acknowledges risks from artificial intelligence adoption, dependence on third-party technological infrastructure, and the potential for cyber incidents.
  • Future regulatory changes, environmental, social, and governance (ESG) requirements, and changes in tax law could all introduce new liabilities or costs.
• Potential Dilution and Shareholder Value Risks:
  • The company does not pay dividends and has warned that conversion of convertible notes, future capital raises, or share repurchases may dilute existing shareholders or impact share price.
  • The company’s continued listing on Nasdaq requires compliance with certain requirements, and failure to meet these could impact liquidity and share value.

Forward-Looking Statements and Safe Harbor

The report contains numerous forward-looking statements regarding future operations, financial performance, strategic initiatives, and market conditions. These are subject to significant risks and uncertainties, including macroeconomic factors, regulatory changes, and shifts in consumer behavior. Investors should not place undue reliance on these statements, as actual results may differ materially.

Other Noteworthy Disclosures

• Regulatory and Governmental Compliance:
  – Subject to a variety of consumer protection, privacy, and trade law regulations; past or future non-compliance could result in fines, penalties, or restrictions.
• Proxy Statement Reference:
  – Portions of the 2025 Proxy Statement are incorporated by reference, particularly for Part III disclosures.
• Access to Reports:
  – All SEC filings and financial disclosures are made available free of charge on the Investor Relations section of the company’s website.

Conclusion for Investors

CarParts.com, Inc. faces a range of significant risks, most notably ongoing losses, liquidity concerns, and restrictive debt covenants that could materially impact future operations and share price. Investors should carefully consider the company’s warnings regarding the potential for continued losses, the risk of further asset impairments, and the need for possible additional financing or restructuring. With evolving operational, regulatory, and technological challenges, as well as possible dilution from future capital raises, this report contains several items that could move the share price depending on how future events unfold.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should review the full Annual Report and consult with their financial advisor before making investment decisions. The author and publisher accept no responsibility for any loss or damage arising from reliance on the information provided above.

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