The Purple booth at last spring’s Summit.
But direct-to-consumer sales continue to slip
YSN Staff
Mattress maker Purple says its Q2 earnings report indicates the company is rebounding from a tough couple of years.
For the three months ending June 30, the bedding resource saw a 2% net revenue increase, up from $117.9 million in 2023 to $120.3 this year. Moreover, the company narrowed its net loss to $9 million, from the year-ago period’s $40.6 million in red ink.
Exceeded Plan
“Our second quarter results underscore the progress we’ve made enhancing the financial profile of the Company,” said Chief Executive Officer Rob DeMartini. “Even as industry trends further deteriorated and impacted demand, we exceeded our adjusted EBITDA plan [earnings before interest, taxes, depreciation and amortization] thanks to a number of operational improvements and cost saving programs that drove a significant increase in gross margins on both a year-over-year and sequential basis.”
Looking ahead, he said, “We remain on track for a return to profitability in the second half of the year and are confident that our Path to Premium Sleep strategy will continue to gain traction in the marketplace, allowing us to take share and deliver value to our shareholders.”
The increase in Q2 earnings was primarily driven by an increase in wholesale revenue. The direct-to-consumer channel continues to founder, with net revenues declining by 1.5% in the quarter. Another factor is the growth in Purple retail showroom revenue.
Plant Closings
The company hopes to further buttress earnings with next year’s planned closure of its two Utah manufacturing facilities and the consolidation of production into its McDonough, Ga., plant.
Based on results from the first half of 2024 and the ongoing decline in demand, Purple amended its revenue outlook to the range of $480-$510 million, down from its previous outlook of $540-$560 million.
