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Jun 30, 2021
Purple Q2 2021 Earnings Report
Reported a 10.6% increase in net revenue, driven by higher demand for all product lines, particularly mattresses, but faced manufacturing challenges.
Key Takeaways
Purple Innovation, Inc. reported a 10.6% increase in net revenue to $182.6 million compared to the second quarter of 2020. The company faced isolated manufacturing challenges that limited their ability to fulfill demand. They anticipate exiting the backlog position by late August and expect full-year net revenue to be between $820 million and $850 million.
Net revenue increased by 10.6% to $182.6 million compared to Q2 2020.
Wholesale revenue increased by 233.2%, while DTC revenue decreased by 19.9%.
Gross margin was 44.7% compared to 49.4% in the prior year period.
Operating loss was $(2.5) million compared to operating income of $32.0 million in the prior year period.
Purple
Purple
Forward Guidance
Purple expects full year 2021 net revenue to be between $820 million and $850 million. Adjusted EBITDA is expected to be between $78 million and $88 million.
Positive Outlook
- Net revenue is expected to increase by 26% to 31% over 2020 results.
- Net revenue is expected to increase by 81% to 98% over the 2019 results.
- Company projects late August timing for exiting the current backlog position created by the isolated production issues.
- Significant portion of revenue growth in the second half of the year will occur in the fourth quarter.
- Long-term targets of $2 billion to $2.5 billion in annual net revenue and mid-teens adjusted EBITDA margins over the next three to five years.
Challenges Ahead
- Inventory constraints are expected to last until late August.
- Third quarter margins will be impacted by the isolated production issues.
- There is an expected channel mix shift toward wholesale over the remainder of the year.
- Uncertainties regarding the extent and duration of the impact of the COVID-19 pandemic
- Fluctuations in raw material prices