PRPL - Why Purple Innovation Stock Plunged 28% at the Open Today
Shares of mattress maker Purple Innovation (NASDAQ: PRPL) , which describes itself as a vertically integrated comfort company because it also makes pillows, bed frames, and sheets, fell out of bed on Wednesday, dropping as much as 28% in early trading. The big news was the company's third-quarter earnings update, which hit Wall Street after the close on Tuesday.
As the stock's performance might suggest, it was not a good quarter. For example, sales fell 8.7% year over year in the third quarter of 2021 versus the same period in 2020. Although wholesale revenue was higher by 9.6%, the company's direct-to-consumer sales dropped 15.9%, more than offsetting that positive. This is notable given that the company highlights the fact that it is a digitally native brand, meaning that direct sales are its historical core business. Gross profit margin declined 11.4 percentage points, and operating costs increased 5.4 percentage points. Purple's adjusted lost was $0.07 per share, down from a profit of $0.27 per share in 2020.
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Why Purple Innovation Stock Plunged 28% at the Open Today