Specialty bedding producer Purple Innovation said first-quarter 2024 sales rose 12.5% to $120 million due to positive response to a recent product launch and an increase in floor slots in furniture and mattress stores.
The Lehi, Utah-based company, however, said its net loss nearly doubled to $50.2 million due largely to a noncash charge of $23.2 million for a decrease in the fair value of newly issued warrants. Without the one-time charges, the loss totaled $20.4 million, or 19 cents per share, compared with a loss of $14 million, or 14 cents per share, in last year’s first quarter.
“We are encouraged by our start to the year as our first-quarter performance was in line with our guidance despite continued industry softness,” CEO Rob DeMartini said in a news release. “Momentum in our business has been accelerating since the mid-2023 launch of our new product portfolio and brand repositioning, leading to market share gains and a return to growth.”
He said wholesale revenue increased 33.1%, but direct-to-consumer revenue was essentially even with last year’s first quarter. Within the DTC channel, lower e-commerce revenue was offset by growth in Purple retail showroom revenue, driven by a shift in sales toward higher-ticket mattresses and the net addition of five showrooms over the previous 12 months.
Gross margin fell to 34.8% from 38% in the same quarter last year, while the operating loss was trimmed to $23.1 million from $24.6 million in the comparable quarter.
The company reiterated an earlier projection of full-year sales of $540 to $560 million, and said it is also projecting adjusted earnings before interest, taxes, depreciation and amortization of negative $20 million to negative $10 million.
