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Purple Innovation, Inc. Reports Third Quarter Results

November 8, 2026  by Karen Parrish in Business Strategy, Industry   

"Third quarter performance was mixed as we continued to navigate a challenging mattress environment," said Rob DeMartini, CEO of Purple Innovation. "We were encouraged by improving momentum in our e-commerce business as the quarter progressed, supported by stronger conversion rates on Purple.com, and we opened two new showrooms during the quarter, bringing our network to 57 stores.  Wholesale was not where we needed it to be, and we have begun increasing sales coverage and improving how we position and differentiate our products with retail partners."

"We have taken steps to improve our cost structure, and are consistently generating cash, with positive operating cash flow for the third consecutive quarter. At the same time, we are actively preparing for a significant product refresh planned for early 2027, including new Essentials and Hybrid collections representing almost 90% of our mattress unit volume. Our teams are focused on ensuring we are well positioned for a successful launch and believe these initiatives position us to strengthen our performance over the long term."

Third Quarter 2026 Financial Results
Third quarter 2026 net revenue was $96.5 million, down 18.7% compared with $118.8 million in the third quarter of 2025. The decrease was primarily driven by lower wholesale revenue, along with declines in showroom and e-commerce revenue.

Direct-to-consumer revenue, which includes e-commerce and showroom channels, was $60.9 million compared with $67.2 million in the prior year period. E-commerce revenue was $42.4 million versus $45.3 million last year. Showroom revenue was $18.5 million versus $22.0 million last year. Wholesale revenue was $35.6 million versus $51.5 million. Approximately one quarter of the reduction was due to an increase of $4.0 million in reductions of revenue due to certain payments to customers and a manufacturer under common control with a customer.

Gross margin was 43.4%, a decrease of 410 basis points versus last year. The decline reflected lower production leverage and inventory adjustments partially offset by lower tariff costs and favorable channel mix.

Third quarter operating expenses were $51.7 million, down 24.7% from the prior-year quarter. The improvement reflected lower restructuring costs versus the prior period as well as lower marketing expenses, and employee-related and professional services expenses.

GAAP Net Loss for the third quarter was $1.4 million, compared with a GAAP Net Loss of $11.7 million in the prior-year period.

Adjusted EBITDA for the third quarter was a loss of $0.5 million, compared with adjusted EBITDA of $0.2 million in the prior-year period. Adjusted EBITDA is a non-GAAP financial measure. See discussion under the heading "Non-GAAP Financial Measures" below for additional information.

Balance Sheet
The Company ended the third quarter with cash and cash equivalents of $28.3 million, compared with $24.3 million as of December 31, 2025. Cash flow from operating activities YTD as of September 30, 2026 was $10.6 million, a $38.7 million improvement over the prior year's same period.

Net inventories as of September 30, 2026, totaled $53.5 million, down $6.2 million from December 31, 2025.

2026 Outlook
We are maintaining our revenue guidance in the range of $420 million to $440 million, supported by an improved marketing plan, normal seasonal strength in DTC, and new product introductions, partially offset by continued pressure in wholesale.   Adjusted EBITDA is now expected to be in the range of $15 million and $20 million.

Conference Call and Webcast Information
Purple Innovation, Inc. will host a live conference call to discuss financial results on Nov. 4. After the conference call, a webcast replay will remain available at investors.purple.com on the investor relations section of the Company's website for one year.