Purple Innovation Expects 40% Gross Margin Exit in 2025, Driven by Mattress Firm Rollout and Product Launches

Purple Innovation expects a gross margin of over 40% in 2025, driven by the rollout of Mattress Firm and new product launches. Q2 2025 revenue reached $105 million, a 12.6% decrease from the prior year, but a slight increase from the previous quarter. Demand for the Rejuvenate 2.0 exceeded expectations.

Purple Innovation, Inc. (NASDAQ: PRPL) released its second quarter 2025 earnings report, showing a net loss that exceeded expectations, while its adjusted EBITDA margin improved by 120 basis points compared to the previous year. The company reported a net revenue of $105.1 million, a decline of 12.6% from $120.3 million in the same period last year. Gross profit decreased to $37.7 million from $48.9 million, with a gross margin of 35.9%, down 480 basis points year-over-year [2].

The company attributed the decline in revenue to delays in the timing of Rejuvenate 2.0 shipments, lapping reductions in wholesale door count from 2024, and softness in ecommerce. However, demand for the Rejuvenate 2.0 collection more than doubled compared to the Rejuvenate 1.0 launch in the direct-to-consumer (DTC) segment [2].

Purple Innovation's CEO, Rob DeMartini, expressed satisfaction with the company's performance, highlighting the disciplined execution and progress in building a premium, sustainable, and profitable brand. He noted that revenue and profit exceeded expectations, driven by strong consumer and partner demand [3].

Looking ahead, Purple Innovation expects full-year revenue to be in the range of $465 to $485 million and adjusted EBITDA to be between flat and positive $10 million. The company anticipates sequential growth in the second half of the year, supported by the successful launch of Rejuvenate 2.0 and the expanded partnership with Mattress Firm [2].

The company also aims to achieve a gross margin of over 40% in 2025, driven by the rollout of Mattress Firm and new product launches. This target is an ambitious goal, given the current gross margin of 35.9% [2].

References:
[1] https://za.investing.com/news/earnings/purple-innovation-earnings-matched-revenue-fell-short-of-estimates-3809587
[2] https://www.tradingview.com/news/tradingview:fbbdf94fb56c0:0-purple-innovation-reports-second-quarter-2025-results/
[3] https://finance.yahoo.com/news/purple-innovation-reports-second-quarter-200500722.html