Mattress producer Purple Innovation said first-quarter revenues tumbled 23.6 percent to $109.4 million amid weak demand for products for the home and inflationary pressures that crimped consumer spending.
The company said its net loss also increased to $23.3 million or 24 cents per share from $13.5 million or 20 cents per share in last year’s first quarter. Operating loss was $22 million, up from a loss of $18.4 million in the comparable quarter.
Gross margin, however, rose to 39.5 percent from 36.1 percent in the first quarter of 2022. The company attributed the increase to reduced raw materials, freight and labor costs, as well as a variety of cost-reduction initiatives that were implemented last year.
CEO Rob DeMartini said revenues were in line with expectations, and noted the company slashed advertising costs by more than 50 percent compared to last year’s first quarter as it prepared for a major product launch mid-May that’s being supported by increased ad spending.
“With the second quarter underway, we have started shipping our new mattresses to our wholesale partners ahead of their debut at retail, including in our showrooms and website,” DeMartini said. “With the improved and expanded product lineup and new brand messaging, we are optimistic that consumer demand will accelerate in the second half of the year. While near-term challenges persist, we believe we are on the right path toward returning to profitable growth and driving sustained market share gains over the long-term.”
The company reiterated its earlier revenue projection of $590 million to $615 million for the 2023 calendar year. DeMartini said second-quarter revenues should be roughly even with last year’s second quarter, as the full impact of the new products won’t be felt until the second half of the year.