Purple Innovation, Inc. (NASDAQ: PRPL) reported first‑quarter 2026 results that fell short of analyst expectations, with net revenue of $95.7 million, a decline of 8.1% from the $104.2 million reported in the same quarter last year. The company posted a net loss of $30.5 million, up from a $19.1 million loss in Q1 2025, and an adjusted EBITDA of $(4.8) million, unchanged from the prior year. Analysts had estimated revenue of about $101.7 million, so the $95.7 million reported missed estimates by roughly 6%. The adjusted loss per share of $-0.13 matched consensus expectations, indicating that the loss was largely driven by the accounting adjustment rather than a deterioration in operating performance.
Gross margin contracted to 36.8% from 39.4% in Q1 2025, a decline attributed to a strategic investment in Royale floor models for Mattress Firm and lower production volumes. CFO Todd Vogensen noted, "Gross margin for the quarter was approximately 36.8%". The accounting‑related wholesale revenue adjustment reduced reported revenue but did not affect gross profit dollars, EBITDA, or cash flow. E‑commerce revenue fell 10.6% year‑over‑year, while showroom revenue increased about 5%, reflecting a shift toward higher‑margin retail channels.
The company reduced its full‑year 2026 revenue guidance to $465 million–$485 million from the prior $500 million–$520 million range, citing the accounting adjustment as the primary reason for the downward revision. Adjusted EBITDA guidance was maintained at $20 million–$30 million, signaling management’s confidence in cost‑control initiatives and the expectation that margin compression will normalize in the second half of the year.
Management highlighted early traction for the Purple Royale line at Mattress Firm and continued momentum in the Rejuvenate 2.0 portfolio. CEO Rob DeMartini said, "We are encouraged by the strong response to our premium portfolio, including early traction for Purple Royale at Mattress Firm and continued momentum in Rejuvenate 2.0, as we expand our wholesale partnerships and improve operating efficiency." He also noted that e‑commerce trends improved sequentially, but that consumer nervousness and category softness remain concerns.
Investors reacted with a mixed response, reflecting concerns over the revenue miss and margin compression while acknowledging the company’s focus on premium product demand and cost‑control initiatives. The guidance reduction and ongoing accounting adjustment underscore the need for continued monitoring of revenue trends and margin recovery as Purple scales its showroom and wholesale partnerships.
Purple’s earnings miss and flat adjusted EBITDA underscore ongoing softness in e‑commerce and wholesale channels, but the company’s focus on premium product demand and cost‑control initiatives suggests it is positioning for a rebound in the second half of the year. Investors will watch how the company’s margin compression and loss profile evolve as it continues to scale its showroom and wholesale partnerships.
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