The earnings call highlighted significant operational improvements and cost efficiencies, which have positively impacted gross margins and are expected to lead to EBITDA savings in the future. However, the company faced challenges with a decline in revenue and negative adjusted EBITDA, driven by macroeconomic pressures and strategic reductions in advertising and wholesale relationships. While there is optimism for future profitability, the current environment remains challenging.

Company Guidance

During the Purple Innovation Q3 2024 earnings call, the company provided guidance indicating that it anticipates finishing the year at the lower end of its revenue guidance range of $490 million to $510 million and adjusted EBITDA guidance of negative $20 million to negative $10 million. The company outlined several strategic initiatives aimed at improving profitability, including driving gross margin improvements, which saw a 340 basis point increase year-over-year to 40.5%. This improvement is supported by cost savings through supplier diversification, plant efficiency gains, and optimized freight scheduling. The restructuring and consolidation of manufacturing operations are expected to yield annual EBITDA savings of $15 million to $20 million starting in 2025. Additionally, the company aims to achieve positive cash flow and adjusted EBITDA next year, driven by its leaner corporate structure and rightsized manufacturing operations. Despite a 15% year-over-year decline in Q3 sales, Purple Innovation remains focused on its Path to Premium sleep strategy and expects continued pressure on the top line due to industry-wide demand declines.

Improved Gross Margin

Adjusted gross margin improved by 340 basis points year-over-year to 40.5%, exceeding the 40% year-end target for the second consecutive period.

Operational Efficiencies and Restructuring

The company achieved significant operational efficiencies with a corporate restructuring and consolidation of manufacturing facilities, expected to yield annual EBITDA savings of $15 to $20 million starting in 2025.

Positive Cash Flow and Adjusted EBITDA Forecast

The company plans to have positive cash flow and adjusted EBITDA in 2025, supported by a leaner corporate structure and rightsized manufacturing operations.

Successful Product Strategy

Showrooms were flat year-over-year, driven by an increase in average selling prices as the company continues to upsell customers to higher-priced models through its Path to Premium sleep strategy.

Inventory and Efficiency Improvements

Net inventories were reduced by 16.9% year over year, and mattress production became more efficient with a 25% decrease in hours per mattress produced compared to last year.

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Purple Innovation (PRPL) Earnings, Revenues Date & History

The upcoming earnings date is based on a company’s previous reporting, and may be updated when the actual date is announced

Daily Earnings Calendar >

PRPL Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Aug 09, 2018	2018 (Q2)	- / -0.09	-0.011	-718.18% (-0.08)	―	―
Nov 14, 2018	2018 (Q3)	- / -0.09	0.11	-181.82% (-0.20)	―	―
Mar 12, 2019	2018 (Q4)	- / -0.12	-0.02	-500.00% (-0.10)	―	―
May 07, 2019	2019 (Q1)	- / -0.02	-0.17	88.24% (+0.15)	―	―
Aug 13, 2019	2019 (Q2)	- / -0.16	-0.09	-77.78% (-0.07)	―	―
Nov 06, 2019	2019 (Q3)	- / 0.16	-0.09	277.78% (+0.25)	―	―
Mar 09, 2020	2019 (Q4)	- / -0.29	-0.12	-141.67% (-0.17)	―	―
May 11, 2020	2020 (Q1)	- / 0.11	-0.02	650.00% (+0.13)	―	―
Aug 13, 2020	2020 (Q2)	- / -0.11	-0.16	31.25% (+0.05)	―	―
Nov 10, 2020	2020 (Q3)	- / -0.02	0.16	-112.50% (-0.18)	―	―

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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PRPL Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Nov 04, 2024	$0.94	$0.83	-11.70%
Aug 05, 2024	$1.18	$1.08	-8.47%
May 07, 2024	$1.68	$1.53	-8.93%
Mar 12, 2024	$2.04	$1.66	-18.63%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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