New York-based Casper Sleep Inc. reported net sales of $113 million, a 26% increase compared with the first fiscal quarter of 2019. Sales results surpassed Wall Street expectations (Zacks Investment Research) of $110.2 million in the first fiscal quarter of 2020.
Founded in early 2014, Casper is a digitally native seller of sleep products that had its initial public offering on the New York Stock Exchange in February. Filings show the boxed bed company has yet to be profitable.
The company posted a net loss of $34 million for the first fiscal quarter, compared with a loss of $17 million in the prior-year fiscal quarter. Its adjusted loss before interest, taxes, depreciation and amortization was $22.9 million, compared with an adjusted EBITDA loss of $14.3 million in the prior-year fiscal quarter.
“I am pleased with the solid financial results in Q1 and strong early performance in Q2,” said Philip Krim, Casper chief executive officer. “Our brand and digital strength have positioned us well to address shifting consumer behaviors. We also recently took decisive actions to reduce costs by more than $10 million on an annualized basis, demonstrating our commitment to achieving positive EBITDA.”
The company sells direct to consumers online and at 59 Casper storefronts. Sales in its direct channels grew 12.8% to $90.3 million during the first fiscal quarter. Revenues from its newer wholesale channel jumped to $22.7 million, a 142.9% increase compared with the prior-year fiscal quarter.
Gross profit was $53 million, a 21.6% increase, and gross margin declined from 48.7% to 46.9%.
The company had cash and cash equivalents of $116.1 million, compared with $67.6 million at the start of the fiscal quarter. The increase was driven by $88.2 million from the IPO, partially offset by $33.1 million of cash used in operating activities and $7.1 million invested in retail stores.
Prior to the release of first-quarter results, Casper issued an April 21 business update in response to the COVID-19 pandemic. It confirmed the company’s first-quarter guidance despite impacts from the pandemic, and announced cost-cutting measures, including the closure of European operations and termination of 78 European employees. It also announced the departure of Greg MacFarlane, chief operating officer and chief financial officer since January 2018.
MacFarlane left to take a position outside the industry, and his departure was “not related to any financial performance, policy or control issues or any disagreements on accounting or financial reporting matters,” the company said. A search is underway for his replacement.
In a second COVID-19 update, Casper said it had experienced only minor impacts to its supply chain due to the pandemic. It furloughed retail employees beginning in March, but as of mid-May, certain retail stores were slated to reopen. The company, like many others, declined to offer second-quarter or full-year guidance.