Purple Innovation 2025 Q2 Earnings Misses Targets as Net Loss Soars 193%

Purple Innovation (PRPL) reported its fiscal 2025 Q2 earnings on Jul 30th, 2025. Despite strong demand for its Rejuvenate 2.0 collection, the company's earnings fell short of expectations. Revenue for Q2 2025 dropped 12.6% year-over-year to $105.1 million, missing the consensus estimate. The net loss widened dramatically to $17.3 million, reflecting operational challenges and increased debt servicing costs. Purple Innovation reaffirmed its full-year 2025 revenue guidance between $465 million and $485 million, aligning with market expectations, and anticipates adjusted EBITDA to range from flat to a positive $10 million.

Revenue

The total revenue of Purple Innovation decreased by 12.6% to $105.10 million in 2025 Q2, down from $120.27 million in 2024 Q2.

Earnings/Net Income

Purple Innovation maintained stable EPS at $-0.16 in 2025 Q2 compared to 2024 Q2. Meanwhile, the company's net loss widened to $-17.37 million in 2025 Q2, representing a 192911.1% increase from the $-9000 loss recorded in 2024 Q2. The EPS performance indicates ongoing financial challenges for the company.

Price Action

The stock price of Purple Innovation has tumbled 13.04% during the latest trading day, has tumbled 12.16% during the most recent full trading week, and has surged 15.75% month-to-date.

Post-Earnings Price Action Review

The strategy of buying PRPL when it beats revenue and holding for 30 days resulted in a -97.15% return, significantly underperforming the benchmark return of 87.61%. Despite this, the strategy's Sharpe ratio was -0.58, indicating substantial risk. The maximum drawdown remained at 0.00%, suggesting no additional losses beyond the initial investment. This performance highlights the volatility and inherent risk in Purple Innovation's stock, especially amidst the current financial uncertainties. Investors may need to reassess the reliability of this strategy, given the company's recent earnings volatility and broader market conditions.

CEO Commentary

Rob DeMartini, CEO of Purple Innovation, emphasized the company's disciplined execution in the second quarter, noting that despite a challenging environment, they displayed resilience through strategic initiatives. He highlighted strong consumer demand for the Rejuvenate 2.0 collection, which has seen more than double the launch performance of its predecessor. DeMartini acknowledged the impact of delayed shipments and e-commerce softness but expressed optimism regarding the ongoing expansion with Mattress Firm and deepening relationships with partners like Walmart and Costco. He conveyed confidence in the company's path toward premium sleep, driven by innovation and operational improvements.

Guidance

Purple Innovation reaffirmed its full-year 2025 guidance, expecting revenue to be between $465 million and $485 million. The company anticipates adjusted EBITDA to range from flat to a positive $10 million. DeMartini mentioned that they expect sequential growth in the latter half of the year, largely fueled by the successful Rejuvenate 2.0 launch and the expansion of their partnership with Mattress Firm.

Additional News

In recent non-earnings developments, Purple Innovation is strengthening its executive team with the appointment of a new Chief Operating Officer, focusing on optimizing supply chain and production efficiency. The company also announced a strategic partnership with Tempur Sherwood, enhancing its manufacturing capabilities and aiming to boost product quality and delivery times. Furthermore, Purple Innovation is increasing its retail footprint through an expanded collaboration with Mattress Firm, which is expected to significantly enhance its market presence and consumer reach. These initiatives underscore the company's commitment to operational improvement and strategic growth, positioning it for long-term success in a competitive industry.