Purple Innovation (PRPL) Q2 2026 earnings summary

Executive summary

• Showroom sales grew 16.6% year-over-year, marking the fourth consecutive quarter of positive comps, while total net revenue declined 6.5% to $98.3 million due to a 19.1% drop in wholesale and a 1.4% decline in e-commerce.

• Direct-to-consumer revenue increased 3.4%, driven by premium product strength and improved traffic and conversion.

• Profitability improved with gross profit up 4.5% to $44.4 million and gross margin expanding to 45.2%, aided by a $5.3 million tariff refund and cost controls.

• Operating expenses decreased 14.3% to $48.7 million, reflecting lower payroll, restructuring, and professional services costs.

• GAAP net loss improved to $3.2 million from $17.3 million in the prior year quarter; adjusted EBITDA turned positive at $2.1 million, a $4.4 million improvement.

Financial highlights

• Net revenue was $98.3 million, down 6.5% from $105.1 million in the prior year period.

• Gross profit increased 4.5% to $44.4 million; gross margin rose to 45.2%, up 470 basis points year-over-year.

• Operating expenses decreased 14.3% to $48.7 million.

• GAAP net loss was $3.2 million, a $14.1 million improvement year-over-year; adjusted EBITDA was $2.1 million, up $4.4 million from prior year.

• Cash and cash equivalents ended at $23.3 million; positive operating cash flow of $3.6 million for the first six months.

Outlook and guidance

• Fiscal year 2026 revenue guidance lowered to $420 million–$440 million due to continued softness in wholesale.

• Adjusted EBITDA guidance maintained at $20 million–$25 million, supported by DTC strength and cost discipline.

• Gross margin target revised upward to approximately 45% for fiscal 2026, reflecting reclassification of certain expenses.

• Management is focused on premium product innovation, brand building, and operational efficiency.

• The company is exploring strategic alternatives, including potential mergers or sales, to maximize shareholder value.