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Sep 30, 2022
Purple Q3 2022 Earnings Report
Reported a significant improvement in profitability due to manufacturing and supply chain efficiency initiatives, headcount adjustments, and marketing spend alignment.
Key Takeaways
Purple Innovation, Inc. reported a decrease in net revenue but an increase in gross margin and operating income for Q3 2022. Net revenue decreased by 16.1% to $143.3 million, while gross margin increased to 41.5%. Operating income was $1.3 million, compared to an operating loss of $(6.6) million in the prior year period.
Net revenue decreased 16.1% to $143.3 million compared to Q3 2021.
Gross margin increased to 41.5% compared to 35.8% in the year-ago period.
Operating income was $1.3 million compared to an operating loss of $(6.6) million in the prior year period.
The company is optimistic about product innovation and channel development translating into sustainable market share gains.
Purple
Purple
Forward Guidance
The Company is reiterating its previous outlook for 2022 full year revenue in the range of $570 to $590 million and raising its 2022 full year Adjusted EBITDA outlook and now expects Adjusted EBITDA to range from $2 million to $7 million.
Positive Outlook
- Purple brand revenue to be toward the lower end of the range
- Contributions from Intellibed to put overall Company revenue at approximately the mid-point of the range
- Adjusted EBITDA outlook now expects Adjusted EBITDA to range from $2 million to $7 million
- The company is pleased with the improvement in profitability it experienced in the third quarter
Challenges Ahead
- Management is more cautious about fourth quarter profitability
- Expensive advertising rates during the holiday period
- Expectation of increased discounting for Black Friday and Cyber Monday promotions
- Increased discounting for Black Friday and Cyber Monday promotions is expected to negatively impact gross margins in the fourth quarter