Purple Innovation Reports Fourth Quarter and Annual Earnings for 2024 Amidst Strategic Changes

Purple Innovation Reports Financial Results for 2024

Overview
On March 13, 2025, Purple Innovation, Inc. (NASDAQ: PRPL), a key player in the comfort innovation market, released its financial statements for the fourth quarter and the complete year ending December 31, 2024. Despite facing challenges, the company highlighted significant operational improvements and a strategic pivot to enhance its financial health.

Key Financial Highlights
In the fourth quarter, Purple recorded a net revenue of $129.0 million, an 11.6% decrease compared to $145.9 million in the same quarter of 2023. This revenue drop was attributed to ongoing softness in the industry and adjustments related to new mattress line launches. Notably, the company achieved a positive EBITDA for the first time in eight quarters, underscoring successful cost-containment strategies and operational enhancements.

CEO Rob DeMartini emphasized the importance of these results, noting, "Returning to positive adjusted EBITDA reflects our disciplined approach, operational efficiency, and effective cost-reduction measures. We are excited about our future trajectory, especially with upcoming product launches like Rejuvenate 2.0 that promise to drive profitability."
The gross profit for the fourth quarter rose to $55.3 million from $48.5 million a year earlier, with a gross margin improving substantially to 42.9%, marking a significant 970 basis points increase year-over-year. Adjusted gross margin soared to 44.9% due to sourcing optimizations and efficient inventory liquidations.

Annual Financial Performance
For the year 2024, Purple's total revenue stood at $487.9 million, reflecting a 4.4% decline from the previous year's $510.5 million. This decline was similarly driven by market challenges and the memory foam mattress product transition. Year-over-year, gross profit reached $181.1 million, increasing from $171.8 million, with a gross margin rise to 37.1%. Adjusted gross margin also improved to 40.3%, showcasing benefits from production efficiencies and sourcing strategies.

Operating expenses for 2024 decreased by 4.6% to $273.3 million, thanks in part to prudent cost-saving efforts. However, the company experienced a net loss attributable to Purple Innovation of $97.9 million, an improvement compared to $120.8 million in 2023, reinforcing the effectiveness of recent restructuring initiatives.

Balance Sheet Strength
As of December 31, 2024, Purple's cash and cash equivalents totaled $29.0 million, a positive shift from $26.9 million at the end of 2023. Additionally, the inventory levels dropped by 15% to $56.9 million, further signaling strategic management of resources.
In a notable financial maneuver, Purple secured a $19.0 million increase in its term loan, bolstering its liquidity to support continued investments in innovation and marketing. DeMartini expressed gratitude to the company's lenders for their confidence and reiterated the importance of this capital in executing the Path to Premium strategy.

Looking Ahead to 2025
For the upcoming fiscal year, Purple anticipates revenues between $465 million and $485 million, along with an adjusted EBITDA forecast ranging from breakeven to a positive $10 million. Early indicators show hope for sequential improvements as the year progresses. In the first quarter of 2025, expected total revenue is projected between $102 million and $107 million, anticipating an adjusted EBITDA in the range of -$6 million to -$9 million.

Strategic Alternative Review
Moreover, the company has initiated a review of potential strategic alternatives to maximize shareholder value, including possibilities like mergers or sales, prompted by external interest in its operations.

Conclusion
Purple Innovation's recent financial results reflect a pivotal moment for the company as it navigates through industry challenges while aligning its focus on innovation and operational excellence. With a recovery in EBITDA and strategic investments underway, Purple aims to solidify its market position and enhance profitability through effective product launches and ongoing commitment to comfort innovation.

For more updates, Purple will be hosting a live conference on March 13, 2025, to delve into the details of their financial results and future strategies.