Daily News

From Home Furnishing Business

Purple Innovation, Inc. Releases Results for First Quarter 2025

May 6, 2025  by Karen Parrish in Business Strategy, Industry   

"Our first quarter performance reflects continued progress against our strategic priorities to stabilize and strengthen the business, and position Purple for long-term success," said Rob DeMartini, CEO of Purple Innovation. "Revenue was in line with expectations, led by positive showroom growth, while continued improvement in gross margin and cost control drove Adjusted EBITDA ahead of guidance."

DeMartini continued, "As we move forward, our focus is on unlocking growth through continued innovation, including the full rollout of our Rejuvenate 2.0 collection, promoting our unique Gel Grid differentiation, and further optimizing our operations. Though the current economic environment remains uncertain, including the evolving impact of tariffs, we believe the structural improvements we have achieved, and investments we have made across innovation and partnership expansion, position us to navigate near-term pressures and deliver sustained growth over time."

First Quarter 2025 Financial Results
First quarter 2025 net revenue declined by 13.2% to $104.2 million, compared to $120.0 million in the first quarter of 2024, reflecting the impact of persistent macroeconomic challenges and reduced demand in our wholesale and ecommerce channels.

Gross profit for the first quarter decreased slightly to $41.0 million, compared to $41.7 million in the prior-year period. GAAP gross margin improved to 39.4%, an increase of 460 basis points year-over- year. Adjusted gross margin, which excludes restructuring and related charges, expanded to 40.3%, an improvement of 550 basis points year-over-year, driven by ongoing strategic sourcing efforts, production efficiencies, and the successful integration of our consolidated manufacturing operations.

Operating expenses for the first quarter were $55.5 million, down 14.4% from $64.9 million in the first quarter 2024. This improvement was primarily driven by headcount reductions from our restructuring efforts and the in-sourcing of certain functions in marketing and finance.

Net loss attributable to Purple Innovation, Inc. for the first quarter was ($19.1) million, an improvement from $(50.2) million in the prior year.

Adjusted EBITDA for the first quarter was $(4.7) million, a significant improvement compared to $(13.2) million last year, driven by ongoing improvements in gross margin and well-managed expenses.

Balance Sheet 
As of March 31, 2025, the Company had cash and cash equivalents of $21.6 million compared to $29.0 million as of December 31, 2024.

Inventories as of March 31, 2025 totaled $60.2 million, down 16.5% compared to March 31, 2024, and an increase of 5.8% compared to December 31, 2024.

2025 Outlook 
The Company is reiterating its 2025 outlook for full year revenue to be in the range of $465 to $485 million and adjusted EBITDA in the range of flat to positive $10 million. This guidance incorporates expected revenue and EBITDA contributions from expanded wholesale distribution in the second half of the year, and anticipated impacts from recently announced tariffs. Given the ongoing uncertainty around timing and scope of the tariffs, the Company's outlook remains subject to change.

Mattress Firm Update
The Company announced a significant expansion of its commercial partnership with Mattress Firm, through an agreement with Somnigroup International, Inc. Under the terms of this multifaceted agreement, Purple will more than double its retail footprint in Mattress Firm stores nationwide through the second half of 2025, from approximately 5,000 mattress slots to a minimum of 12,000 mattress slots. The agreement also expands the existing strategic supply relationship with Tempur Sherwood, LLC, a subsidiary of Tempur Sealy, which will have the exclusive right to assemble certain product lines that Purple sells to Mattress Firm. Purple will maintain production of its proprietary grid technology and retain all related intellectual property. These expanded partnerships are a clear endorsement of Purple's product differentiation and brand strength, and enable further investment in driving innovation, brand visibility, and top-line growth.

Term Loan Amendment
Subsequent to quarter-end, Purple successfully borrowed an incremental $20 million through an amendment to its Term Loan. These funds will support the ramp-up of one-time rollout costs and inventory production associated with the new, expanded distribution agreement with Mattress Firm. The additional capital also provides a financial cushion to help navigate ongoing market uncertainty.

Conference Call and Webcast Information

Purple Innovation, Inc. will host a live conference call to discuss financial results. A webcast replay will remain available at investors.purple.com for 30 days.