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Purple Innovation Reports Third Quarter 2024 Results
PRPLPurple(PRPL) Prnewswire·2024-11-04 21:05

Core Insights - Purple Innovation, Inc. reported a 15.3% decline in net revenue for Q3 2024, totaling 118.6million,primarilyduetoindustry−widedemandsoftnessandreducedadvertisingspend[3][10]−ThecompanyachievedaGAAPgrossmarginof29.7118.6 million, primarily due to industry-wide demand softness and reduced advertising spend [3][10] - The company achieved a GAAP gross margin of 29.7%, down 410 basis points from the previous year, but the adjusted gross margin improved by 340 basis points to 40.5% [4][27] - Adjusted EBITDA loss narrowed significantly to (6.4) million from (16.3)millionintheprioryear,indicatingimprovedoperationalefficiency[7][10]FinancialPerformance−Q32024netrevenuewas(16.3) million in the prior year, indicating improved operational efficiency [7][10] Financial Performance - Q3 2024 net revenue was 118.6 million, down from 140.0millioninQ32023,withDTCnetrevenuesdecreasingby11.7140.0 million in Q3 2023, with DTC net revenues decreasing by 11.7% and wholesale net revenues by 20.1% [3][18] - Operating expenses increased to 82.0 million, up 2.6% from 79.9millioninQ32023,drivenby79.9 million in Q3 2023, driven by 19.8 million in restructuring-related charges [5][29] - Net loss attributable to Purple for Q3 2024 was (39.2)million,or(39.2) million, or (0.36) per diluted share, compared to a net loss of (36.0)million,or(36.0) million, or (0.34) per diluted share, in Q3 2023 [6][30] Restructuring and Operational Efficiency - The company initiated a restructuring plan in August 2024, which includes consolidating manufacturing operations and reducing headcount, expected to yield annual EBITDA savings of 15to15 to 20 million starting in 2025 [8][10] - Total restructuring, impairment, and related charges for Q3 2024 amounted to 32.7million,withadditionalchargesof32.7 million, with additional charges of 9.9 million anticipated through Q2 2025 [8][10] - The restructuring plan aims to enhance operational efficiencies and position the company to capitalize on market improvements [3][8] Balance Sheet and Cash Flow - As of September 30, 2024, cash and cash equivalents were 23.4million,downfrom23.4 million, down from 26.9 million at the end of 2023, while inventories decreased by 10.5% to 59.9million[9][10]−Thecompanyexpectstobeatthelowerendofitsguidancerangefornetrevenueof59.9 million [9][10] - The company expects to be at the lower end of its guidance range for net revenue of 490 million to $510 million for the full year 2024 [10][10] Market Outlook - Despite challenges in Q3, the company remains optimistic about its Path to Premium Sleep strategy and anticipates positive adjusted EBITDA in the fourth quarter of 2024 [2][10] - The company is focused on operational improvements and aims to build on its momentum into 2025 [3][10]