Utah, US – Purple, the mattress manufacturer, has reported a 21% drop in revenue in 2022, down from $726m in 2021 to $576m last year. This resulted in an operating loss of $40.3m, up from $23m in 2021.
The company attributed these declines to changing demand for home-related products, inflationary pressure on consumer spending, and its decision to cut advertising spend by 59% compared to the previous year.
It added that its e-commerce sales fell by 40%. “[This] underscores our significant improvement in advertising spend efficiency,” the company said. Showroom net revenue was up by 95%, largely because it had a net increase of 27 new showrooms over the year.
Gross margin for the year was 36.6%, down from 40.6% in 2021. This was attributed to higher costs for materials, labour and freight, and the increased proportion of wholesale sales, where the average selling price is lower. Cost reduction initiatives helped to offset these impacts.
It projects 2023 revenue will fall in the range $590-615m, with higher margin new products set for launch in the second quarter.
