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From Home Furnishing Business
Purple Innovation Reports 3Q Results; Compared to 3Q/21 and Q2/22
November 9,
2022 by HFBusiness Staff in Business Strategy, Industry 
"I am pleased with the significant improvement in profitability we delivered on both a year-over-year and quarter-over-quarter basis in a very difficult environment," said Purple Chief Executive Officer Rob DeMartini.
Net revenue was $143.3 million, a decrease of 16.1% compared to 3Q/21 and relatively flat compared to 2Q/22. Wholesale revenue increased 1.3% compared to 3Q21 and decreased 6.1% compared to 2Q/22, and Direct-to-Consumer (DTC) revenue decreased 25.0% compared to 3Q21 while advertising spend decreased 56.8% compared to 3Q21.
DeMartini continued, "Execution of our manufacturing and supply chain efficiency initiatives, along with earlier actions to right size headcount and align marketing spend with the current demand environment fueled a meaningful increase in our third quarter Adjusted EBITDA.”
EBITDA was $5.9 million compared to $2.4 million in 3Q/21 and $(8.0) million in 2Q/22. Adjusted EBITDA was $12.1 million compared to $0.6 million in 3Q/21 and $(0.3) million in 2Q22. Cash and cash equivalents, including restricted cash, were $59.1 million on September 30, 2022.
“While industry conditions remain challenging due to high inflation and a shift in consumer spending away from home related categories,” DeMartini said, “we are optimistic that the work we are doing around product innovation and channel development will translate into sustainable market share gains.”
Gross margin increased 570 basis points year-over-year to 41.5% from 35.8% in 3Q/21 and increased 760 basis points compared with 33.9% in 2Q22. Operating expenses as a percent of net revenue were 40.6% compared to 39.6% in 3Q21 and 42.3% in 2Q22.
Operating income inclusive of $3.4 million in one-time expenses related to the Intellibed acquisition was $1.3 million compared to an operating loss of $(6.6) million in 3Q21 and $(12.1) million in 2Q22.
DeMartini concluded, “This includes our recent acquisition of Intellibed which elevated and strengthened our product offering and provides us with an immediate entrée into the high-margin, luxury mattress category. We are making tangible progress positioning Purple as a leading sleep and wellness brand and setting the Company up for long-term success."