Purple Innovation Inc. reported triple-digit gains in revenues for the fourth quarter ended Dec. 31, 2017, and for the 2017 fiscal year as the Alpine, Utah-based comfort technology manufacturer and retailer released its first earnings statement since becoming a publicly owned company.
Purple reported net revenue jumped to $63 million in the fourth quarter, an increase of 156.1% over $24.6 million in the same quarter of 2016. The increase in net revenue was driven primarily by higher direct-to-consumer demand for the original Purple boxed-bed mattress and companion bedding products fueled by increased marketing investments and an improved manufacturing capacity, the company said.
Gross margin increased to 45.2%, compared with 39.8% in the fourth quarter of 2016. The increase was driven by multiple efficiency gains associated with scale and manufacturing improvements.
Purple’s operating expenses were $30.4 million in the fourth quarter of 201, compared with $10 million in the prior-year period. The increase in operating expenses primarily is attributable to higher marketing investments Purple made to expand brand awareness.
The company’s operating loss in the latest quarter was $1.9 million, compared with a loss of $0.2 million in the prior year. The adjusted operating loss for fourth quarter 2017, excluding one-time, nonrecurring costs related to the merger with Global Partner Acquisition Corp., was $0.9 million, compared with an adjusted operating income in 2016 of $0.4 million.
On Feb. 2, Purple Innovation LLC became a wholly owned subsidiary of GPAC, a special purpose acquisition company. Under the terms of the merger, GPAC changed its corporate name to Purple Innovation Inc. The company’s common stock and warrants now are listed on Nasdaq under the symbols PRPL and PRPLW.
For fiscal 2017, Purple’s net revenue increased 200.6% to $196.9 million from $65.5 million in 2016. Gross margin increased to 44.9%, compared with 32.8% in 2016.
Purple’s operating expenses were $93.8 million for the 2017 fiscal year, compared with $23.3 million in 2016. The company’s operating loss for the 2017 fiscal year was $5.4 million, compared with an operating loss of $1.9 million in 2016. Adjusted operating loss was $3.5 million, compared with adjusted operating income of $2.5 million in 2016.
“The past two years have been a period of significant growth for our brand and business following our entrance into the direct-to-consumer mattress category in early 2016,” said Terry Pearce, co-founder and chairman. “With our differentiated and patent-protected product offering, coupled with our expanded manufacturing capabilities and digital marketing prowess, the company is well positioned to build on its recent momentum.”
For the first quarter of 2018, the company expects net revenue to be between $53 million and $56 million and adjusted earnings before interest, taxes, depreciation and amortization to be in the range of $(3.5) million to $(2.0) million. For the 2018 fiscal year, the company expects net revenues to approximately double from 2017 levels.