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Dec 31, 2022
Purple Q4 2022 Earnings Report
Purple Innovation reported a decrease in net revenue but an increase in gross margin for Q4 2022.
Key Takeaways
Purple Innovation's Q4 2022 net revenue decreased by 22.2% to $145.1 million compared to Q4 2021. Despite the revenue decline, gross margin increased to 35.0%. The company is optimistic about returning to growth in the back half of 2023 due to strategic initiatives and new product launches.
Net revenue decreased by 22.2% to $145.1 million due to changing demand, inflationary pressures, and reduced advertising spend.
Gross margin increased to 35.0% due to cost reduction initiatives.
Operating expenses decreased by $34.0 million due to reduced marketing and sales expenses.
Net loss was $(70.2) million compared to $(21.8) million in the prior year, while adjusted EBITDA was breakeven compared to $(23.4) million in the prior year.
Purple
Purple
Forward Guidance
For 2023, the Company currently expects full year revenue to be in the range of $590 to $615 million and adjusted EBITDA between $13 million and $17 million.
Positive Outlook
- Performance is expected to improve sequentially each quarter.
- Benefits from new, higher margin products launching in the second quarter.
- Introduction of new, more effective marketing programs.
- Further development and expansion of distribution channels.
- Improved operating efficiencies following last year’s cost and expense reduction actions.
Challenges Ahead
- Challenging market trends from 2022 have continued into the start of 2023.
- First quarter performance impacted by lower wholesale sales due to retail partners reducing on-hand inventories.
- Net revenue is expected to be approximately $105 million for Q1.
- Adjusted EBITDA is expected to be approximately $(9.5) million for Q1.