Purple Innovation has launched its newest advertising campaign, the first in five years.
Lhi, Utah – Digital native bedding brand Purple Innovation attributed its second quarter net sales slide to five key things: pull-forward consumer demand and the economic stimulus in the prior-year quarter during COVID; shifting consumer demand, inflationary impact on consumer spending and the company’s reduced advertising spend.
The company’s net revenue for the second quarter ended June 30 dropped 21.1% to $144.1 million, compared with net revenue $182.3 million in the second quarter of 2021. The company’s wholesale revenue decreased 5.9% compared with the same quarter last year, while second quarter direct-to-consumer revenue dropped 29.8% when compared with the same period last year.
For the second quarter, the company reported a net loss of $8.3 million in the second quarter ended June 30, compared with net income of $2.6 million in the same period last year.
“We continue to make important progress improving Purple’s operational health despite increasing macro headwinds,” said CEO Rob DeMartini, who joined the company in December. “The meaningful improvement in second quarter adjusted EBITDA compared with the first quarter on similar revenue underscores the work we’ve done since the start of this year right sizing our cost structure.
“While the continued shift in demand away from home-related categories and the impact of inflation on consumer discretionary spending is delaying our top-line recovery, we remain confident that our four strategic initiatives – operational excellence, brand elevation, channel development and accelerating innovation – are the right building blocks for delivering long-term profitable growth. We are moving forward focused on executing our plans and preparing the company to emerge from the current macroeconomic environment well positioned to accelerate growth and expand market share.”
Purple’s operating expenses were 42.3% of net revenue for the second quarter of 2022 compared with 46.1% in the year-ago period. The company said the decrease in operating expenses as a percent of net revenue compared with the prior year period was driven primarily by its intentional reduction in advertising spend to improve marketing efficiency and stabilize profitability and the restructuring of the marketing organization that occurred in the second quarter of this year. Advertising spend for the quarter was reduced $24.1 million, or 56% year-over-year and $4.9 million, or 20.6% from the first quarter of 2022.
Based on second quarter results and “the current macroeconomic environment”, the company is revising its 2022 outlook. Now, the company said it expects full year 2022 net revenue to be between $570 million and $590 million, compared with its prior range of $650 million to $690 million.
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I’m Sheila Long O’Mara, executive editor at Furniture Today. Throughout my 25-year career in the home furnishings industry, I have been an editor with a number of industry publications and spent a brief stint with a public relations agency where I worked with some of the industry’s leading bedding brands. I rejoined Furniture Today in December 2020 with a focus on bedding and sleep products. It’s a homecoming for me, as I was a writer and editor with Furniture Today from 1994 until 2002. I’m happy to be back and look forward to telling the important stories impacting bedding retailers and manufacturers.
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