Purple Innovation (PRPL) Tops Q1 EPS by 7c, Revenues Beat; Raises FY21 Revenues Mid-Point Guidance Above Consensus, 2Q Revs. View Above Consensus

Purple Innovation (NASDAQ: PRPL) reported Q1 EPS of $0.17, $0.07 better than the analyst estimate of $0.10. Revenue for the quarter came in at $186.4 million versus the consensus estimate of $167.16 million.

First Quarter Financial Summary (Comparisons versus First Quarter 2020)1

• Net revenue increased 52.3% to $186.4 million, compared to $122.4 million.
  • Direct-to-Consumer (DTC) revenue increased 54.8%; Wholesale revenue increased 47.6%.
• Gross margin improved to 46.9% compared to 43.5%.
• Operating expenses as a percent of net revenue were 37.9% compared to 37.3%.
• Operating income increased 125.3% to $16.9 million compared to operating income of $7.5 million.
• Net income was $20.9 million as compared to a net income of $28.0 million. Adjusted net income was $12.0 million, or $0.17 per diluted share as compared to $4.6 million, or $0.08 per diluted share.
• EBITDA was $27.8 million compared to $30.8 million. Adjusted EBITDA increased 115.1% to $22.8 million compared to $10.6 million.
• Cash and cash equivalents were $103.8 million at March 31, 2021.

"Our first quarter results meaningfully exceeded expectations and represent a great start to 2021," said Joe Megibow, Chief Executive Officer. "We experienced strong demand early in the year, particularly in our digital channel, followed by a sharp acceleration in our wholesale business as the first quarter progressed. The product and marketing strategies we are executing, which showcase the premium nature of our brand and differentiated comfort technologies, continue to set Purple apart from the competition and fuel important market share gains. Importantly, our recent capacity expansion has us well positioned to take advantage of the strong wholesale momentum we are experiencing as brick-and-mortar traffic further approaches pre-pandemic levels and current consumer spending benefits from recent government stimulus."

Megibow continued, "Looking ahead, our plans are firmly around providing customers with innovative comfort solutions through our omni-channel retail strategy. This includes upgrading our digital capabilities in order to better integrate our multiple product categories and enhance the online shopping experience, accelerating the rollout of Purple showrooms, and strengthening our wholesale relationships. We've built a great foundation and we are very excited to leverage the many strengths of our organization to capitalize on the tremendous opportunities that exist for our business."

GUIDANCE:

Purple Innovation sees Q2 2021 revenue of $200-210 million, versus the consensus of $194.09 million.

Purple Innovation sees FY2021 revenue of $860-900 million, versus the consensus of $860.97 million.

Based on first quarter results, the Company is raising its 2021 outlook. It now expects full year 2021 net revenue to be between $860 million and $900 million, up from its previous range of $840 million to $880 million. The new range represents an increase of 33% to 39% over 2020 results. Considering the first quarter results and recent trends indicating an even greater channel mix shift toward wholesale in the second quarter, adjusted EBITDA is now expected to be between $95 million and $105 million, up from its previous range of $90 million to $100 million.

The Company continues to expect capital expenditures for 2021 to be in the range of $45 to $50 million consisting primarily of approximately $20 million for the continued buildout of the Georgia manufacturing facility and $19 million related to the acceleration of showroom expansion, as well as expansion of wholesale displays and additional equipment for production and innovation facilities in Utah.

For the second quarter of 2021, the Company expects net revenue to be between $200 million to $210 million and adjusted EBITDA between $21 million and $25 million.

For earnings history and earnings-related data on Purple Innovation (PRPL) click here.

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