Purple Sales Get a Lift in the 4th Quarter

Specialty mattress producer Purple Innovation said fourth-quarter sales were 1.1% above last year’s fourth quarter, and the company substantially reduced its net loss.

Sales for the quarter ended Dec. 31 totaled $145.9 million, compared with $144.3 million in the final quarter of 2022. The most recent quarter included a 4.3% jump in direct-to-consumer revenues and a 2.7% drop in wholesale revenues.

The Lehi, Utah-based company’s net loss totaled $18.3 million or 17 cents per share. In the fourth quarter of 2022, the loss was $71.7 million or 78 cents per share.

“The fourth quarter represented an encouraging finish to 2023 as sales finished within our guidance range and increased year-over-year for the first time in eight quarters,” said CEO Rob DeMartini. “Throughout last year we made meaningful progress capturing market share and repositioning Purple as a premium brand despite ongoing industry headwinds. The launch of our innovative new mattresses and new marketing campaign fueled improved sales trends across all channels in the second half.”

The company recorded an operating loss of $16.2 million in the fourth quarter, but DeMartini noted that Purple had positive operating income in December.

He said the company will continue to focus on a series of initiatives that should boost sales and earnings, including productivity improvements, increasing wholesale and showroom door velocity, and increasing conversion rates on its e-commerce site. In addition, he said earnings growth should come from price increases, an improved product mix, manufacturing improvements and more efficient ad spending.

“While near-term industry challenges persist, the foundation is now in place for long-term profitable growth,” DeMartini said.

For the 2023 calendar year, sales totaled $510.5 million, down 10.9% from $573.2 million in 2022. Last year’s numbers included a 10.2% drop in direct-to-consumer revenues and an 11.9% decline in wholesale revenues.

The net loss for 2023 was $120.8 million or $1.17 per share. That compares with a loss of $92.5 million or $1.13 per share in 2022.