Purple Innovation, Inc. Common Stock 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Purple Innovation reported second quarter 2026 net revenue of $98.3 million, down 6.5% year over year, primarily due to lower wholesale revenue offset by strong showroom growth.
- Direct to consumer revenue increased 3.4% to $60.9 million, with showroom revenue up 16.6% to $18.4 million and e-commerce revenue down 1.4% to $42.5 million but improving sequentially for the third consecutive quarter.
- Wholesale revenue decreased 19.1% to $37.4 million, impacted by a $5.3 million increase in payments to customers recorded as contra revenue and a $3.5 million decline in sales volume due to lower industry demand.
- GAAP gross profit increased 4.5% to $44.4 million with gross margin improving by approximately 470 basis points to 45.2%, aided by a $5.3 million tariff refund, tariff mitigation, favorable inventory adjustments, and lower scrap.
- Operating expenses decreased 14.3% to $48.7 million, driven by lower payroll expenses, reduced professional services, and the non-recurrence of prior restructuring and impairment charges.
- GAAP net loss improved by $14.1 million to $3.2 million, with net loss per share of $0.74 compared to $4.01 last year.
- Adjusted EBITDA was $2.1 million, a $4.4 million improvement from a loss of $2.4 million in the prior year period.
- Cash and cash equivalents ended at $23.3 million, and inventory was $55.4 million, down $4.3 million from December 31, 2025.
- Cash flow from operations was positive for the second consecutive quarter, totaling $3.6 million for the first six months of fiscal 2026, a $30.7 million improvement year over year.
- Capital spending of $3.6 million supported showroom expansion and manufacturing investments.
- Purple completed the rollout of Purple Royal at Mattress Firm and saw strong performance from Costco and Amazon, with Amazon delivering double-digit growth.
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Transcript
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I will now hand the conference over to Stacy Turnof.
Please go ahead. Thank you for joining Purple Innovation second quarter 2026 earnings call.
A copy of our earnings press release is available on the investor relations section of Purple's website at www.purple.com. Before we begin, I would like to remind you that certain statements made in this presentation are forward-looking statements. These statements reflect Purple Innovation's judgment and analysis as of today and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. You should not place undue reliance on these forward-looking statements. For more information, please refer to the risk factors outlined in our filings with the SEC. Additionally, today's presentation will reference non-GAAP financial measures such as adjusted gross margin, adjusted operating expenses, adjusted EBITDA, adjusted net loss, and adjusted net loss per share.
A reconciliation of these measures to their most comparable GAAP measures can be found in the earnings release available on our website. With that, I will turn the call over to Rob DeMartini, Purple Innovation's Chief Executive Officer.
Thanks, Stacy, and good afternoon, everyone. I want to start with what matters most from the quarter. While the market remains difficult, we continued to make progress in areas where we believe we have the greatest impact. Our showrooms had another strong quarter. Our premium products continued to perform well, e-commerce improved sequentially, and we delivered better profitability. This tells us the work we have been doing over the past year continues to take hold. We are a stronger and more disciplined business today than we were a year ago, and that is showing up in our direct-to-consumer business, product mix, and cost structure. The broader market did not give us any help in the second quarter. Demand remained uneven, and wholesale was softer than we expected. Turning to our quarterly performance, our results were mixed across channels.
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