Purple Innovation 2025 Q1 Earnings Narrowed Losses Amid Revenue Decline

Purple Innovation (PRPL) reported its fiscal 2025 Q1 earnings on May 06th, 2025. Despite a 13.2% revenue decline due to macroeconomic challenges affecting consumer discretionary spending, the company demonstrated improved profitability metrics. The GAAP gross margin increased by 460 basis points to 39.4%, while the adjusted gross margin reached 40.3%. Purple reaffirmed its 2025 guidance, forecasting revenue between $465 and $485 million and adjusted EBITDA ranging from flat to a positive $10 million, driven by expanded wholesale distribution, though potential tariff impacts remain a concern.

Revenue

The total revenue of Purple Innovation decreased by 13.2% to $104.17 million in 2025 Q1, down from $120.03 million in 2024 Q1.

Earnings/Net Income

Purple Innovation narrowed losses to $0.18 per share in 2025 Q1 from a loss of $0.47 per share in 2024 Q1, marking a 61.7% improvement. Meanwhile, the company successfully narrowed its net loss to $-19.17 million in 2025 Q1, reducing losses by 61.9% compared to the $-50.27 million net loss reported in 2024 Q1. This improvement in EPS reflects positive strides despite revenue challenges.

Price Action

The stock price of Purple Innovation has climbed 3.05% during the latest trading day, jumped 12.39% during the most recent full trading week, and has increased 9.04% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Purple Innovation (PRPL) shares following a quarter with a revenue drop and holding for 30 days has resulted in a loss of 26.57% over the past five years. This suggests that this approach has not been profitable for PRPL, indicating a need for reevaluation or alteration of the strategy. Investors may need to consider other factors or market conditions when deciding on this investment strategy, as the historical data points to significant losses rather than gains.

CEO Commentary

"Our first quarter performance reflects continued progress against our strategic priorities to stabilize and strengthen the business, and position Purple for long-term success," said Rob DeMartini, CEO of Purple Innovation. He noted that while revenue was impacted by ongoing macroeconomic challenges, there was positive showroom growth and significant improvements in gross margin and cost control, which drove Adjusted EBITDA ahead of guidance. DeMartini emphasized the company's focus on unlocking growth through innovation, specifically the full rollout of the Rejuvenate 2.0 collection and optimizing operations, despite the uncertain economic environment and potential impacts from tariffs.

Guidance

Purple Innovation reaffirms its 2025 guidance with expected revenue in the range of $465 to $485 million and adjusted EBITDA projected to be flat to a positive $10 million. The guidance anticipates contributions from the expanded wholesale distribution in the latter half of the year while acknowledging potential uncertainties related to tariffs, indicating a cautious yet confident outlook for the year ahead.

Additional News

Recently, Purple Innovation announced a significant expansion of its commercial relationship with Somnigroup, aiming to bolster its market presence and product offerings. This move signifies Purple’s strategic intent to leverage partnerships for enhanced market penetration. Additionally, Purple revealed the full rollout of its Rejuvenate Collection featuring advanced grid technology, which is expected to redefine luxury sleep by offering unmatched comfort. Furthermore, the company is exploring strategic alternatives to maximize shareholder value, including possible mergers or sales, following expressions of interest. These developments highlight Purple’s proactive steps in strengthening its operational and competitive positioning in the market.