Buffeted by sluggish demand, specialty mattress producer Purple Innovation said third-quarter revenues fell 15.3% to $118.6 million and its net loss widened to $39.2 million, or 36 cents per share.
The most recent quarterly loss, which compares with a loss of $36 million, or 34 cents per share, in last year’s third quarter, included more than $32 million in restructuring and impairment charges. The Lehi, Utah-based company is in the process of shutting down its two factories in Utah and shifting all production to its plant in Georgia — a move the company says will result in “significant operational efficiencies.”
“The restructuring plan … is on track to deliver meaningful cost savings in the new year as we improve our operational efficiencies and positions us to capitalize on tailwinds when the market improves,” said CEO Rob DeMartini.
DeMartini said Purple will incur additional restructuring charges of about $9.9 million through the second quarter of 2025, but noted the restructuring effort should boost EBITDA by $15 million to $20 million annually starting next year.
The third quarter sales picture included an 11.7% decline in direct-to-consumer sales and a 20.1% drop in wholesale sales. In addition, gross margin fell to 29.7% from 33.8% in last year’s third quarter.
For the nine months ending Sept. 30, sales fell 1.6% to $358.9 million. The nine-month net loss totaled $89.4 million, or 84 cents per share. That compares with a loss of $102.4 million, or 99 cents per share, in the first nine months of last year.
The company said it is expecting total sales for 2024 to be at the lower end of its earlier estimate of $490 million to $510 million. Adjusted EBITDA, which excludes several one-time costs, is projected to be a loss of $10 million to $20 million.
