Shares of Purple Innovation (NASDAQ:PRPL) jumped more than 18% on Wednesday following the release of the mattress, pillow, and cushion maker's second-quarter results.
Purple's net revenue surged 36% to $103 million. That was well above Wall Street's estimates for revenue of approximately $95 million.
"The positive top-line momentum we experienced at the start of the year carried over into the second quarter," CEO Joe Megibow said in a press release. "We once again delivered strong year-over-year revenue growth as our wholesale door expansion and enhanced marketing programs are continuing to drive greater awareness of the Purple brand and create even greater demand for our differentiated product offering."
Better still, Purple's profitability improved as its operating expenses as a percent of revenue declined from 48.2% to 43.8%. In turn, the company generated a significantly smaller operating loss than it did in the year-ago period.
"We posted another quarter of record production, which enabled the company to capitalize fully on the increased demand for our products, and we achieved this output without increasing our labor costs, thanks to efficiencies in our production line from improved processes and increased automation," Chief Operating Officer John Legg said during a conference call with analysts. "This has allowed us to better control costs and further improve yields on both a year-over-year and sequential basis."
These strong results prompted Purple to boost its full-year financial forecast.
Management is now guiding for revenue of $400 million to $425 million, up from prior guidance of $350 million to $375 million. Purple is also now guiding for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $24 million to $27 million, up from $3 million to $8 million.
"I am confident that we are well-positioned to profitably capitalize on the numerous growth opportunities we believe exist for the company in the near and long-term," Megibow said.