by What’s happening: Purple has announced preliminary estimated results for the fiscal year that ended Dec. 31, 2022.
For the year that ended Dec. 31, 2022, the company expects to report:
- Net sales of approximately $574 million compared to guidance of $570 million to $590 million.
- Net loss between $(97.5) million and ($83.7) million.
- Adjusted EBITDA at the low end of its guidance range of $2 million to $7 million.
Why it matters: Rob DeMartini, chief executive officer, says, “I am pleased that we delivered sequential improvement in quarterly net sales despite ongoing macroeconomic challenges. While our fourth-quarter top-line performance was encouraging, industry headwinds, in particular the impact of inflation on consumer discretionary spending and a highly promotional environment during the holiday season, put some additional pressure on gross margins and profitability.
The company anticipates a net impact of approximately $51 million to $65 million of non-cash additional expense to the consolidated financial statements for the quarter and year ended Dec. 31, 2022.
It is possible that, in the future, conditions will require the company to reevaluate the valuation allowance for deferred tax assets and the Tax Receivable Agreement liability, which may result in increases or decreases in such balances, resulting in increases or decreases in net income. While future conditions may make it possible for the company to utilize DTAs, there is no guarantee that any of the benefits of the DTAs will be realized.
