Purple Innovation Pops On Q3 Earnings Beat

Purple Innovation Inc PRPL reported a third-quarter FY22 sales decline of 16.1% year-on-year to $143.28 million, beating the consensus of $139.18 million.
Wholesale revenue increased 1.3% Y/Y, and Direct-to-Consumer (DTC) revenue decreased 25%.
The gross profit fell 2.7% to $59.4 million, with gross profit margin expanding 570 basis points to 41.5%.
The operating income was $1.3 million, versus an operating loss of $(6.6) million last year. The operating margin was 0.9%.
Operating expenses rose 14.1% Y/Y to $58.1 million. Operating expenses were 40.6% of net revenue, versus 39.6% in the prior year.
Net cash provided by operating activities amounted to $22.3 million.
Adjusted EBITDA of $12.1 million compared to $0.6 million last year.
Adjusted EPS was $0.03, beating the Street view of $(0.05).
The company held $59.1 million in cash and equivalents as of September 30, 2022.
"While industry conditions remain challenging due to high inflation and a shift in consumer spending away from home related categories, we are optimistic that the work we are doing around product innovation and channel development will translate into sustainable market share gains," said CEO Rob DeMartini.
Outlook: Purple Innovation reiterated its FY22 sales outlook of $570 million - $590 million versus the consensus of $578.66 million.
It anticipates Purple brand revenue to be toward the lower end of the range, with contributions from Intellibed to put overall company revenue at approximately the mid-point of the range.
It raised adjusted EBITDA guidance from $(15) million - $(5) million to $2 million - $7 million.
Price Action: PRPL shares are trading higher by 18.77% at $4.05 in premarket on Thursday.

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