Purple Innovation Reports 15.3% Revenue Decline, Net Loss in Q3 2024 Amid Restructuring Efforts

Purple Innovation, Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, revealing significant changes in revenue, profitability, and strategic initiatives compared to the previous fiscal period.

For the three months ended September 30, 2024, Purple Innovation generated revenues of $118.6 million, a decrease of $21.4 million (15.3%) from $140.0 million in the same period of 2023. The decline was attributed to a general softness in demand for home-related products and reduced advertising spending. Direct-to-consumer (DTC) revenues fell by 11.7%, while wholesale revenues decreased by 20.1%. For the nine months, total revenues were $358.9 million, down slightly from $364.6 million in 2023.

Despite the revenue decline, gross profit for the three months ended September 30, 2024, was $35.2 million, down from $47.3 million, resulting in a gross profit margin of 29.7%, compared to 33.8% in the prior year. Operating expenses increased to $82.0 million, primarily due to $19.8 million in restructuring charges. The company reported an operating loss of $46.8 million for the quarter, compared to a loss of $32.6 million in Q3 2023. The net loss attributable to Purple Innovation was $39.2 million, compared to $36.0 million in the same quarter of the previous year.

For the nine months ended September 30, 2024, the net loss was $89.6 million, an improvement from a loss of $102.8 million in 2023. The company’s operating loss for this period was $84.5 million, down from $97.5 million in the prior year.

In terms of strategic developments, Purple Innovation initiated a restructuring plan in August 2024 aimed at consolidating manufacturing operations and improving profitability. This plan includes the closure of two manufacturing facilities in Utah and a workforce reduction at its headquarters. The restructuring is expected to incur additional charges of approximately $9.9 million through Q2 2025. The company also recorded $32.7 million in restructuring and impairment charges in Q3 2024, which included accelerated depreciation and inventory write-downs.

Financially, total current assets decreased to $123.2 million as of September 30, 2024, from $141.8 million at the end of 2023. Total liabilities decreased to $94.5 million, while total stockholders’ equity fell significantly to $28.0 million from $115.6 million at the end of 2023. The company’s total debt increased to $50.8 million as of September 30, 2024, compared to $29.0 million at the end of the previous year.

Overall, Purple Innovation is navigating a challenging market environment while implementing strategic changes to enhance operational efficiency and profitability.