PRPL - Purple Innovation stock pops 20% on earnings beat upbeat outlook

2023-05-10 16:33:35 ET

The mattress manufacturer reported a $0.12 per share loss on $109.4M in revenue for the quarter. Analysts had projected a $0.13 per share loss on $104.8M in revenue. The company also noted a 340 basis point improvement in gross margins, to 39.5% from 36.1%, year over year. An adjusted EBITDA loss of $4.4M was also far lighter than the $9.86M consensus expectation.

“Our top-line result was generally in-line with our expectations and our improved Adjusted EBITDA reflects both meaningful operating efficiencies, and proactive cost management, including a significant shift in planned advertising spend intended to support the second quarter launch of our broadest product line ever,” CEO Rob DeMartini said. “I am encouraged that despite lower revenue, we were able to increase gross margins, highlighting the work we’ve done right sizing our cost structure and improving the efficiency of supply chain and manufacturing processes.”

He added that he is “optimistic that consumer demand will accelerate in the second half of the year” and that profitable growth is within view. However, “continued market softness and the launch of our new products and branding not happening until May 15th” will hamper Q2 performance.

Management reiterated a sales outlook of between $590M and $615M for the full year, well above the $583.4M consensus. Meanwhile, a projection for adjusted EBITDA between $13M and $17M came in above the $9.99M Street expectation. Gross margins are anticipated to reach the “low 40 percent range for the full year.”

Shares of Purple Innovation ( NASDAQ: PRPL ) accelerated 20.8% higher in Wednesday’s extended session.

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