Purple Innovation (NASDAQ: PRPL) reported Q2 EPS of ($0.11), $0.30 worse than the analyst estimate of $0.19. Revenue for the quarter came in at $165.1 million versus the consensus estimate of $175.88 million.

Second Quarter Financial Summary (Comparisons versus Second Quarter 2019)1

Net revenue increased 60.3% to $165.1 million, compared to $103.0 million.

Direct-to-Consumer (DTC) revenue increased 127.9%; Wholesale revenue decreased 49.3%

• Gross margin improved to 49.4% compared to 41.5%.
• Operating expenses as a percent of net revenue were 30.1% compared to 43.8%.
• Operating income was $32.0 million compared to operating loss of $(2.4) million.
• Net loss was $(5.8) million compared to a net loss of $(7.3) million. Adjusted net income was $30.6 million compared to $2.6 million.
• EBITDA was $(37.8) million compared to $(5.2) million. Adjusted EBITDA was $35.2 million compared to $6.2 million.

"It was a record breaking quarter from both a revenue and operating income standpoint as our organization successfully capitalized on the strengths of our business model and the changes in consumer buying behavior brought on by COVID-19," said Joe Megibow, Chief Executive Officer. "Following a brief scale back in our operations early in the pandemic, we quickly ramped production and fulfillment capabilities and pivoted back to our digital roots, shifting our efforts into a mostly direct-to-consumer business to capture the growing online demand. In addition to driving an increase in online purchasing, shelter-at-home directives also fueled higher demand for many categories tied to the home. This was certainly true for Purple as our direct-to-consumer mattress business grew triple digits as did several of our other categories led by seat cushions, pillows and sheets. Our exceptional digital performance more than offset the decline in wholesale revenue, which was down due to significant store closures and reduced traffic, particularly during the first half of the quarter."

Megibow continued, "Looking ahead, we remain optimistic. The positive momentum in our business has carried over into the third quarter and our strong cash position is allowing us to further invest in our key growth initiatives. This includes a new 520,000 square foot facility in Georgia opening later this year that will significantly expand our domestic manufacturing capacity over time. In terms of channel performance, we have seen a resurgence in wholesale sales as partner doors continue to reopen and resume more normalized store operations. We are encouraged with the improvement in this channel, as brick and mortar retail – both third party and Company-owned – is an important part of our omni-channel strategy. While we still have much work to be done, we are pleased with how our team is navigating through these unprecedented times and are confident that the long-term growth prospects for our Company are stronger than ever."

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