Purple Innovation Reports 4.4% Revenue Decline, Plans Restructuring and New Product Launches

Purple Innovation, Inc. reported a decrease in net revenues for the fiscal year ending December 31, 2024, totaling $487.9 million, down 4.4% from $510.5 million in 2023. This decline was attributed to a general softness in demand for home-related products and a strategic reduction in advertising expenditures aimed at enhancing profitability. The company's direct-to-consumer (DTC) sales fell by 4.4%, while wholesale revenues decreased by 4.5%. However, Purple's showroom sales increased by 5.8%, driven by higher average selling prices and the introduction of new premium products.

The company's gross profit rose to $181.1 million, reflecting a 5.4% increase from the previous year, with the gross profit margin improving to 37.1% from 33.7%. This improvement was largely due to enhanced production efficiency and cost-saving measures implemented over the past year, despite incurring $15.4 million in restructuring-related charges. Operating expenses also decreased by 4.3% to $273.3 million, primarily due to reduced marketing costs and non-recurring legal expenses from the previous year.

In terms of strategic developments, Purple initiated a restructuring plan in August 2024, which included the closure of two manufacturing facilities in Utah and consolidation of operations in Georgia. This plan is expected to enhance operational efficiency and profitability. The company also launched new product collections, including the Rejuvenate 2.0 line, set to debut in the second quarter of 2025. As of March 7, 2025, Purple operated 58 showrooms across the U.S., a slight decrease from 60 in 2023, and employed approximately 1,200 individuals.

Purple's financial outlook remains cautious, with management emphasizing the need for continued focus on cost savings and operational efficiencies. The company reported a net loss of $97.9 million for 2024, an improvement from a loss of $120.8 million in 2023. The net loss was influenced by restructuring charges and interest expenses related to a new term loan agreement. Despite these challenges, Purple anticipates that its restructuring efforts and product innovations will position the company for future growth and improved market share.

Looking ahead, Purple plans to prioritize gross margin improvements and product differentiation in its marketing strategy. The company aims to leverage its proprietary Hyper-Elastic Polymer technology to maintain a competitive edge in the sleep products market. However, management acknowledges the inherent risks and uncertainties in executing these initiatives, particularly in a challenging economic environment.