Purple Innovation Reports $104.2M Revenue in Q1 2025, Net Loss of $19.1M

Purple Innovation, Inc. reported a net revenue of $104.2 million for the first quarter of 2025, a decrease of 13.2% from $120.0 million in the same period last year. The decline was attributed to ongoing softness in demand for home-related products, particularly affecting the e-commerce and wholesale channels, which saw decreases of 8.2% and 24.2%, respectively. However, the showrooms channel experienced a 7.4% increase in revenue, marking the second consecutive quarter of growth in this segment. Gross profit for the quarter was $41.0 million, slightly down from $41.7 million a year earlier, but the gross profit margin improved to 39.4% from 34.8%, reflecting enhanced production efficiencies and a shift towards higher-margin direct-to-consumer sales.

The company’s operating expenses decreased by 14.4% to $55.5 million, down from $64.9 million in the prior year, primarily due to reductions in employee-related costs and legal fees as part of ongoing cost control measures. Purple Innovation reported an operating loss of $14.5 million, a significant improvement from the $23.1 million loss recorded in the same quarter of 2024. Other expenses also saw a notable reduction, decreasing by 82.8% to $4.6 million, largely due to a decrease in losses related to the fair value of warrants. The net loss attributable to Purple Innovation was $19.1 million, compared to a net loss of $50.2 million in the previous year.

In terms of strategic developments, Purple Innovation has been implementing a Restructuring Plan initiated in August 2024, which includes the consolidation of manufacturing operations and a reduction in workforce. The company recognized $2.9 million in restructuring-related charges during the first quarter of 2025 and anticipates additional charges in the upcoming quarters. Furthermore, on May 2, 2025, Purple entered into a significant agreement with Mattress Firm to expand its product inventory from approximately 5,000 to 12,000 mattress slots, which is expected to generate around $70 million in incremental revenue starting in 2026.

As of March 31, 2025, Purple Innovation had cash and cash equivalents of approximately $21.6 million and an accumulated deficit of $593.0 million. The company has taken steps to enhance liquidity, including securing additional term loan proceeds totaling $39 million through amendments to its credit agreements. Despite the current financial challenges, management believes that the company has sufficient liquidity to fund operations for at least the next year, although future capital needs may require additional financing, which could be difficult to secure under favorable terms.

Looking ahead, Purple Innovation aims to focus on product differentiation and gross margin improvements as part of its growth strategy. The company plans to launch a new line of products featuring innovative grid technology and intends to refocus its marketing efforts to highlight the unique benefits of its offerings. However, the company acknowledges that the execution of these initiatives is subject to various risks and uncertainties, including market conditions and operational challenges.