Purple Innovation Q2 Revenue Tops Estimate; Cuts FY21 Outlook Citing Production Issues

Purple Innovation Inc PRPL reported second-quarter FY21 revenue growth of 10.6% year-on-year, to $182.6 million, beating the analyst consensus of $176.99 million.
Wholesale revenue increased 233.2% Y/Y, and Direct-to-Consumer (DTC) revenue decreased 19.9%.
The gross profit was nearly flat at $81.69 million, with gross profit margin contracting 470 basis points to 44.7%.
The operating loss was $(2.5) million, versus operating income of $32.0 million last year.
Operating expense rose 69.5% Y/Y to $84.2 million. Operating expenses were 46.1% of net revenue, versus 30.1% in the prior year.
Net cash provided by operating activities amounted to $20.9 million.
Adjusted EBITDA of $11 million declined 68.8% Y/Y.
Adjusted EPS was $0.05 versus $0.35 last year.
The company held $110.1 million in cash and equivalents as of June 30, 2021.
"Unfortunately, our recent performance was impacted by isolated manufacturing challenges that limited our ability to fulfill a meaningful portion of demand during the second quarter," said CEO Joe Megibow.
Outlook: Purple Innovation sees FY21 sales of $820 million - $850 million (prior $860 million - $900 million), versus the consensus of $821.03 million.
It lowered the adjusted EBITDA outlook to $78 million - $88 million (prior $95 million - $105 million).
Price action: PRPL shares closed lower by 3.13% at $24.75 on Monday.

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