Online used-vehicle retailer Vroom Inc. said Monday that its COO, Tom Shortt, will join its board of directors and succeed Paul Hennessy as the company’s CEO.
The change is effective immediately, as Hennessy has “stepped down to pursue other opportunities,” Vroom said. The company also released its first-quarter earnings on Monday, reporting ecommerce revenue of $675.4 million, up 60 percent from the year-earlier period, and a net loss of $310.5 million.
Shortt’s appointment as CEO is the culmination of a planning process by the board to “ensure continuity of leadership” as it works toward several growth goals, said Robert Mylod, chairperson of Vroom’s board.
“During his time as CEO, Paul oversaw Vroom’s transition from a start-up to one of the largest auto retailers in the U.S.,” said Mylod, who will become independent executive chair of Vroom’s board. “While doing so, he recruited and cultivated an outstanding management team — including Tom Shortt — that is now ready to lead Vroom for years to come.”
Shortt, 53, joined Vroom as its COO in early January. Before joining Vroom, Shortt worked as a senior vice president at Walmart, where he developed an ecommerce supply chain strategy.
Before Walmart, Shortt worked in leadership roles at Home Depot, ACCO Brands, Unisource, Fisher Scientific and Office Depot, where he oversaw supply chain, fulfillment and logistics.
Vroom to realign business
Vroom also said Monday that its board has approved a plan to realign the online retailer’s business — something it hopes will lead to longer-term profitable growth. The plan calls for prioritizing vehicle economics, reducing operating expenses and “maximizing liquidity,” according to the company.
That includes cutting targeted vehicle unit sales down to focus on “sustainable sales margins” and growing gross profit per vehicle, Vroom said.
The company also said it will parse a workforce reduction and work toward regionalizing its business operations. It will attempt to cut marketing expenses, focusing on channels that bring the company the highest returns on its investments. Vroom will also keep automating “key portions” of its sales operations.
Once the plan is in place, Vroom said, it expects to see cost reductions and operating improvements between $135 million and $165 million in the rest of 2022.
Shares in Vroom rose 17.6 percent to $1.27 in aftermarket trading on Monday.
The company will hold its first-quarter earnings call at 8:30 a.m. ET Tuesday.
Q1 results
Vroom announced these financial results for the first quarter:
Q1 total revenue: $923.8 million, up 56.3 percent from $591.1 million a year earlier.
Q1 e-commerce revenue: $675.4 million, up 60 percent from $422.3 million a year earlier.
Q1 net loss: $310.5 million, wider than Vroom’s $77.2 million loss a year earlier.
Q1 e-commerce vehicles sold: 19,473, up 25.6 percent from 15,504 a year earlier.
Q1 total gross profit per e-commerce vehicle: $1,763, down 14.2 percent from $2,054 a year earlier.