Purple Reports Q1 CY2025 Results: Revenue Meets Expectations, Sales Decline by 13.2% Year-on-Year
Purple, a leading bedding and comfort retailer listed on the NASDAQ under the ticker PRPL, has announced its financial results for the first quarter of calendar year 2025 (Q1 CY2025). The company’s revenue met Wall Street’s expectations, standing at $104.2 million, while sales declined by 13.2% year-on-year. This performance is in line with analyst estimates and reflects Purple’s continued efforts to stabilize and strengthen its business.
Key Takeaways from Purple’s Q1 CY2025 Results
- Revenue: $104.2 million vs analyst estimates of $104.5 million (in line)
- Sales Decline: 13.2% year-on-year
- Adjusted EPS: -$0.11 vs analyst estimates of -$0.14 (23.3% beat)
- Adjusted EBITDA: -$4.73 million vs analyst estimates of -$7.59 million (-4.5% margin, 37.7% beat)
Despite the decline in sales, Purple’s revenue guidance for the full year stands at $475 million at the midpoint, which is 0.7% above analysts’ estimates. The company’s operating margin has also shown improvement, averaging negative 13.9% in Q1 compared to negative 19.3% in the same quarter last year.
Company Overview
Purple was founded by two brothers with a mission to create sleep and home comfort products that are both affordable and of high quality. The company offers a range of mattresses, pillows, and bedding accessories, catering to the needs of consumers seeking better sleep and relaxation solutions.
Revenue Growth and Performance
A company’s long-term performance is often seen as an indicator of its overall quality. Purple has struggled to consistently increase demand in recent years, with sales growth stagnating at around $472 million for the trailing 12 months. This represents a decline from its revenue five years ago, raising concerns about the company’s ability to adapt to changing market trends.
Purple’s quarterly revenue performance over the last two years shows a consistent decline of 6.3% annually. The recent quarter saw a 13.2% year-on-year revenue decline to $104.2 million, in line with Wall Street’s estimates. Looking ahead, analysts expect revenue to grow by 1.5% over the next 12 months, which is below the sector average.
Operating Margin and Earnings Per Share
Purple’s operating margin has been trending up over the last 12 months but still averaged negative 19.7% over the last two years due to its large expense base and inefficient cost structure. In Q1, Purple generated a negative 13.9% operating margin, highlighting the company’s consistent lack of profits.
The long-term change in earnings per share (EPS) points to the profitability of growth. Unfortunately for Purple, its EPS declined by 18.8% annually over the last five years while its revenue was flat. This indicates that the company struggled due to its fixed cost base making it difficult to adjust to choppy demand.
Conclusion
Purple’s Q1 CY2025 results show a mix of both positive and negative trends. The company met Wall Street’s revenue expectations, but sales declined by 13.2% year-on-year. Purple’s operating margin has shown improvement, and the company’s guidance for the full year is above analyst estimates. However, its long-term performance raises concerns about the company’s ability to adapt to changing market trends.
Investors should carefully consider the bigger picture of valuation, business qualities, and the latest earnings before making any investment decisions. Our actionable full research report provides a comprehensive analysis of Purple’s Q1 CY2025 results and offers insights into whether this is a good time to invest in the company.