Cuộc họp công bố kết quả kinh doanh quý 3/2026 của Purple Innovation (PRPL): Doanh thu giảm 19%, hạ triển vọng EBITDA

Điểm nhấn chính

• Doanh thu thuần quý 3 giảm 19% so với cùng kỳ năm trước xuống còn 96,5 triệu USD, chủ yếu do kênh bán buôn tiếp tục suy yếu. Doanh thu bán buôn giảm 31% xuống còn 35,6 triệu USD, với hiệu quả hoạt động cơ bản của kênh này giảm khoảng 23% sau khi tính đến các tác động liên quan đến kế toán.
• Doanh thu từ kênh bán hàng trực tiếp tới người tiêu dùng (DTC) giảm 9% xuống còn 60,9 triệu USD. Tuy nhiên, tổng doanh thu DTC của tháng 8 và tháng 9 đã tăng khoảng 1% so với cùng kỳ năm trước nhờ nhu cầu cải thiện sau tháng 7 ảm đạm.
• Biên lợi nhuận gộp thu hẹp khoảng 410 điểm cơ bản xuống còn 43,4%, chủ yếu do đòn bẩy sản xuất suy giảm và các điều chỉnh hàng tồn kho. EBITDA điều chỉnh ghi nhận mức lỗ 0,5 triệu USD.
• Các biện pháp cắt giảm chi phí đã giúp lỗ ròng theo chuẩn GAAP thu hẹp xuống còn 1,4 triệu USD so với mức lỗ 11,7 triệu USD cùng kỳ năm trước. Chi phí hoạt động giảm 25% xuống còn 51,7 triệu USD.
• Purple Innovation duy trì kế hoạch doanh thu năm 2026 ở mức 420 triệu đến 440 triệu USD, nhưng hạ dự báo EBITDA điều chỉnh xuống còn 15 triệu - 20 triệu USD so với mức 20 triệu - 25 triệu USD trước đó.
• Công ty kết thúc quý với 28,3 triệu USD tiền mặt và ghi nhận dòng tiền từ hoạt động kinh doanh dương quý thứ ba liên tiếp. Ban lãnh đạo cũng đang đánh giá các phương án tái cấp vốn và các giải pháp chiến lược trước kỳ hạn đáo hạn nợ trong vòng sáu tháng tới.

Dữ liệu tài chính quan trọng

Kết quả kinh doanh và hoạt động

Kết quả của kênh DTC đã cải thiện trong quý sau khi đợt tăng giá vào tháng 6 ảnh hưởng nặng nề hơn dự kiến đến nhu cầu trong tháng 7. Doanh số dịp Lễ Lao động (Labor Day) nhỉnh hơn một chút so với cùng kỳ năm trước. Tổng doanh thu thương mại điện tử tháng 8 và tháng 9 tăng khoảng 2%, nhờ sự đóng góp từ Purple.com và Amazon. Ban lãnh đạo cho rằng kết quả tích cực của Amazon đến từ phạm vi áp dụng gói Prime mở rộng hơn, nguồn cung sản phẩm tốt hơn và thời gian giao hàng nhanh hơn.

Doanh thu từ showroom giảm 16%, một phần phản ánh mức nền so sánh cao của năm trước khi các đợt giao sản phẩm Rejuvenate bị trì hoãn dồn lại. Tính chung quý 2 và quý 3, doanh số showroom thấp hơn 2% so với cùng kỳ, trong khi doanh số các cửa hàng hiện hữu giảm 1%. Purple có 57 showroom vào cuối quý và dự kiến kết thúc năm 2026 với 60 showroom. Ban lãnh đạo tiếp tục đặt mục tiêu mở mới từ 9 đến 12 showroom trong năm 2027.

Kênh bán buôn tiếp tục là trở ngại lớn nhất. Các nhà bán lẻ độc lập và theo khu vực ghi nhận tốc độ bán hàng chậm lại, số lượng vị trí phân phối bị cắt giảm và mất khách hàng. Khoảng một phần tư mức sụt giảm bán buôn được báo cáo xuất phát từ khoản giảm trừ doanh thu 4 triệu USD liên quan đến một số khoản thanh toán cho khách hàng và một nhà sản xuất chịu sự kiểm soát chung với khách hàng.

Purple đang mở rộng độ bao phủ bán buôn và tăng cường đào tạo cho các nhà bán lẻ, đồng thời chuẩn bị cho các đợt ra mắt sản phẩm lớn. Các bộ sưu tập Essentials và hybrid mới sẽ được giới thiệu tại triển lãm Las Vegas Market vào tháng 1. Dòng đệm hybrid sẽ thay thế Restore và dự kiến có mặt tại các showroom của Purple trong quý 1 trước khi bắt đầu giao hàng bán buôn vào tháng 3. Tổng thể, các sản phẩm đệm nâng cấp này chiếm gần 90% sản lượng đệm của công ty.

Công ty cũng có kế hoạch mở rộng danh mục sản phẩm tại Costco với một mẫu đệm mới và lần đầu tiên cung cấp gối Purple sau dịp Black Friday. Các sản phẩm ra mắt bổ sung bao gồm gối đệm lưới Renew, gối du lịch máy bay và gối lông vũ siêu cao cấp.

Kế hoạch kinh doanh của Ban lãnh đạo

Purple Innovation duy trì kế hoạch doanh thu cả năm 2026 trong khoảng 420 triệu đến 440 triệu USD. Triển vọng này dựa trên giả định quý 4 sẽ khởi sắc hơn nhờ tính chu kỳ thông thường của kênh DTC, kế hoạch tiếp thị được cải thiện, các sản phẩm mới và hoạt động gia tăng tại Costco, bù đắp một phần cho áp lực tiếp diễn từ kênh bán buôn.

Kế hoạch EBITDA điều chỉnh cả năm được hạ xuống còn 15 triệu - 20 triệu USD so với mức 20 triệu - 25 triệu USD trước đó. Ban lãnh đạo cho biết nguyên nhân là do suy giảm hiệu quả theo quy mô sản xuất khi sản lượng bán buôn thấp hơn khiến chi phí cố định phải phân bổ trên một sản lượng nhỏ hơn.

Ban lãnh đạo dự kiến toàn ngành chăn ga gối đệm nói chung sẽ không có sự phục hồi đáng kể trong phần còn lại của năm 2026. Dẫu vậy, công ty vẫn kỳ vọng dòng tiền sẽ dương trong quý 4, giai đoạn vốn có dòng tiền mạnh nhất trong lịch sử của công ty.

Công ty tin rằng đợt tăng giá hồi tháng 6 là đủ dựa trên xu hướng chi phí nguyên vật liệu hiện tại. Do việc điều chỉnh giá bán buôn cần nhiều thời gian hơn để thẩm thấu ra thị trường, ban lãnh đạo kỳ vọng toàn bộ lợi ích sẽ thể hiện rõ nét hơn trong quý 4 và hỗ trợ cải thiện biên lợi nhuận gộp.

Rủi ro và các trọng tâm cần lưu ý

• Ban lãnh đạo nhận định ngành hàng đệm đang suy yếu, với nhu cầu toàn ngành giảm ở mức một chữ số từ trung bình đến cao và tiếp tục yếu đi trong quý.
• Hiệu quả bán buôn tại các đại lý khu vực và độc lập vẫn chịu áp lực, và ban lãnh đạo cảnh báo kênh này sẽ không thể phục hồi ngay lập tức.
• Sản lượng bán buôn thấp hơn đang làm giảm khả năng hấp thụ chi phí sản xuất, gây áp lực lên biên lợi nhuận gộp và EBITDA điều chỉnh.
• Đợt tăng giá vào tháng 6 đã tác động mạnh hơn dự kiến đến nhu cầu của người tiêu dùng, đặc biệt là trong giai đoạn khuyến mãi dịp 4/7.
• Các bộ sưu tập mới cần tăng cường sự khác biệt hóa sản phẩm và mức độ gắn kết với các nhà bán lẻ tại các cửa hàng đa thương hiệu, nơi ban lãnh đạo thừa nhận danh mục sản phẩm hiện tại đã trở nên kém hiệu quả hơn.
• Dư nợ hiện tại của Purple sẽ đáo hạn trong vòng sáu tháng tới. Công ty đang thảo luận các phương án với bên cho vay, trong khi một ủy ban đặc biệt tiếp tục đánh giá các giải pháp chiến lược và làm việc với các bên quan tâm.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Khi được hỏi liệu tình trạng suy yếu của kênh bán buôn phản ánh tình hình chung của ngành hay các vấn đề riêng của công ty, ban lãnh đạo cho biết cả hai yếu tố đều có tác động. Purple thừa nhận dòng sản phẩm của mình đã “có phần kém hấp dẫn” đối với các nhà bán lẻ độc lập và khu vực, đồng thời công ty chưa hỗ trợ các đối tác này hiệu quả như đối với các khách hàng bán buôn lớn nhất.

Ban lãnh đạo cho biết các sản phẩm sắp ra mắt sẽ không có giá thấp hơn và không có kế hoạch tăng giá bổ sung khi ra mắt. Biên lợi nhuận sản phẩm dự kiến sẽ tương đương với danh mục hiện tại. Công ty tin rằng sản lượng cao hơn có thể cải thiện khả năng hấp thụ chi phí sản xuất và giúp biên lợi nhuận gộp duy trì ổn định ở mức “vượt xa 45%”, mặc dù đây vẫn là mục tiêu của ban lãnh đạo chứ chưa phải kết quả thực tế được báo cáo.

Về vấn đề giá cả, công ty cho biết hiện tại họ nhận thấy không cần thiết phải tăng giá thêm nhưng sẽ tiếp tục theo dõi chi phí nguyên vật liệu. Đợt tăng giá tháng 6 đã được áp dụng ngay lập tức đối với kênh DTC nhưng mất nhiều thời gian hơn để chuyển giao sang các khách hàng bán buôn.

Về việc tái cấp vốn cho các khoản nợ, ban lãnh đạo cho biết một số phương án đang được xem xét nhưng không nêu rõ cơ cấu cụ thể. Công ty kỳ vọng tình hình sẽ rõ ràng hơn vào cuối quý 4 và đầu năm 2027.

Toàn văn biên bản cuộc gọi báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Hello, everyone. Thank you for joining us, and welcome to Purple Innovation's Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Stacy Turnof. Please go ahead.

Stacy Turnof

Thank you for joining Purple Innovation's Third Quarter 2026 Earnings Call. A copy of our earnings press release is available on the Investor Relations section of Purple's website at www.purple.com.

Before we begin, I'd like to remind you that certain statements made in this presentation are forward-looking statements. These statements reflect Purple Innovation's judgment and analysis as of today and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. We should not place undue reliance on these forward-looking statements. For more information, please refer to the risk factors outlined in our filings with the SEC.

Additionally, today's presentation will reference non-GAAP financial measures such as adjusted gross margin, adjusted operating expenses, adjusted EBITDA, adjusted net loss and adjusted net loss per share. A reconciliation of these measures to the most comparable GAAP measures can be found in the earnings release available on our website. With that, I'll turn the call over to Rob DeMartini, Purple Innovation's Chief Executive Officer.

Robert DeMartini

Thanks, Stacy, and good afternoon, everyone. Third quarter performance was mixed as we continue to navigate a challenging mattress environment. Industry trends remain under pressure with category expected to decline in the second half of the year. Higher interest rates and product pricing continue to weigh on housing and overall mattress demand. Despite this industry backdrop, we saw encouraging signs of improvement in our direct-to-consumer business as we moved through the quarter.

At the same time, wholesale was not where we needed to be. The weakness was most pronounced with our regional and independent partners, and that put pressure on both our sales and profitability. We know we have work to do in this channel to improve performance. The good news is that the business is operating from a stronger foundation than it was a year ago. We have the fullest product innovation pipeline in Purple's history with new mattresses rolling out across our Essentials and hybrid collections, and we plan to showcase the full assortment at the Las Vegas market in January.

We've never introduced new mattresses across two collections at one time, and we believe these launches represent a significant opportunity to reinvigorate our business, strengthen our competitive position and reach more customers by helping them understand what makes Purple products unique. As we celebrate our 10th anniversary, I'm confident in Purple's continued role as an innovator in the sleep category and the opportunities ahead for our brand. Additionally, we've taken steps to improve our cost structure, and we're consistently generating cash.

We ended the quarter with more than $28 million of cash compared with approximately $23 million at the end of the second quarter, and operating cash flow was positive for the third consecutive quarter. That's meaningful progress for this business, particularly given the industry pressure on demand. Importantly, we expect to continue to generate cash in the fourth quarter, which is traditionally our strongest cash flow quarter.

Let me walk you through what we saw in our third quarter. Starting with our direct-to-consumer business, the quarter's performance was uneven. July and the period around July 4 were weak as the price increases we implemented in June had a greater impact on demand than anticipated. However, we saw the business improve meaningfully around mid-August with better performance during the Labor Day promotional period.

Labor Day was particularly encouraging with direct-to-consumer sales slightly above last year during the holiday period. With Labor Day falling six days later this year, the entire holiday weekend occurred in September compared to most of the weekend falling in August last year. This shift affects the monthly year-over-year comparisons. So looking at August and September together provides a clearer view of the trend. Across the two months, direct-to-consumer net sales increased approximately 1% year-over-year. July performance, however, caused DTC revenue for the full quarter to decline 9% versus last year.

For the third quarter, e-commerce sales were down 6% versus last year, driven by weakness in July. Trends improved in August and September with overall e-commerce sales up 2% year-over-year across the two months combined, driven by growth at Amazon and purple dot com. Over the last several quarters, we've made a number of changes to the website to provide consumers with the information they need and to make it easier to understand which product is right for them. This includes connecting our advertising more directly to the website, taking consumers to the right product based on what brought them to Purple in the first place and creating a more seamless customer journey from advertising through purchase. These efforts are translating into early positive results with conversion rates on purple dot com improving significantly year-over-year.

Amazon also continued to significantly outperform during the quarter, supported by improvements in fulfillment, inventory availability and advertising efficiency. We still have work to do, but we're encouraged by the progress we're making on purple dot com and the continued strength we're seeing on Amazon.

Moving to showrooms. We saw softness in our showroom business during the quarter with sales down 16%, primarily due to two factors. First, in 2025, delivery issues related to the Rejuvenate launch pushed a meaningful number of orders written in May and June to be delivered in July and August, which increased the comparison base for the quarter. Second, the price increase we implemented in June had a greater impact on consumer demand than anticipated, particularly around the July 4 promotion. Following that period, consumers gradually acclimated to the higher prices with performance improving as we approach Labor Day and through the latter part of the quarter.

So looking at Q2 and Q3 together, gives us a better picture of how the showroom business is performing. On that basis, the showroom business was 2% below same period last year with same-store comp sales only down 1%. Importantly, when you neutralize the shipping change and acknowledge the price increases, we are encouraged that year-to-date, showroom comps are up nearly 2%. We continue to view showrooms as an important part of our growth strategy. While the third quarter represented a departure from recent trends, our showroom business had delivered year-over-year growth in the prior 4 quarters, and we expect the same-store comps to turn positive again in the fourth quarter, which will deliver positive comps for showrooms for the full year.

Turning to our expansion efforts. We opened two new showrooms during the quarter in San Antonio and Jacksonville, bringing our total to 57 at quarter end. We opened another location in Cleveland in October and with two additional expected openings in the fourth quarter, we should end the year with 60 showrooms.

Looking into 2027, we continue to target 9 to 12 new showrooms with approximately half of those locations already identified and several first quarter locations approved and under construction. We remain confident in the long-term opportunity for our showroom business. When consumers experience the GelFlex grid and our sales teams explain what makes Purple different and which Purple is right for them, we see better conversion, a much more premium mix and highly satisfied consumers.

Wholesale represented our largest headwind during the quarter with sales down 31% versus last year. Accounting changes represent roughly 1/4 of that decline. True channel performance was down approximately 23%. We continue to see pressure in our regional and independent retailer business with declines in sales velocity, distribution slots and customers, and that dynamic has not yet changed materially. We know we need to do a better job supporting these retailers, and we started taking steps to address that.

First, we began increasing sales coverage in the latter part of the quarter, and we plan to expand that effort into the fourth quarter. Our objective is to develop and execute improved training and business support plans that help these retailers sell Purple more effectively. Second, as I mentioned earlier, over the next two quarters, we're rolling out two new mattress collections and an assortment of pillow products that will provide these retailers with new and improved products to engage their customers.

One of the challenges we face is that our existing mattress assortment has not been as effective as it needs to be in a multi-brand environment. We have opportunities to make the aesthetics more compelling and to differentiate models to make it easier for consumers and retail sales associates to distinguish and explain. We're addressing these issues directly with the new collections, which feature significantly improved aesthetics, more distinct product designs and a much clearer step-up story. The updated mattresses have a new athletic-inspired look with redesigned covers that help differentiate models on the retail floor.

Combined with more intuitive naming and clear technology differences, these changes give retail sales associates a better way to explain what makes Purple unique and guide consumers through the assortment. We'll be introducing both collections at the Las Vegas market in January, giving us an important opportunity to get the new products in front of our wholesale partners. Early retailer and customer feedback on these products has been very strong, and we believe they give us an opportunity to reengage retailers and strengthen the wholesale business. We know that wholesale isn't going to turn around overnight, but with improved sales coverage, better training and a significant number of new products coming, we believe we're taking the right steps to improve performance.

Additionally, Costco remains an important wholesale partner, and we see opportunities to expand our assortment with them as we move into the fourth quarter. Following Black Friday, we plan to introduce a new mattress for the holiday season, along with our first Purple pillow offering at Costco. These new products will give us an opportunity to reach more Costco members and expand our presence with this important partner. Our strategy continues to focus on three priorities: understanding our consumer, delivering better sleep through product experience and expanded distribution and executing with financial discipline.

Let me give you an update on each. We continue to get better at understanding what matters to our customers and what it takes to move them from awareness to consideration and ultimately to purchase. As part of that effort, we're becoming more disciplined about where we invest our marketing dollars and the returns we expect from them. Our marketing approach continues to evolve in several important ways. First, we've shifted towards a more consistent always-on approach to brand awareness advertising rather than concentrating investment around individual promotional periods. We're also putting more emphasis on national advertising, helping us reach consumers earlier in their purchasing journey.

Second, we're doing more to let our customers tell the Purple story through testimonial marketing. We have people who have been sleeping on our products for years, and their experiences can help explain why Purple is different and what the GelFlex Grid does for them. As part of our recent 10th anniversary celebration in October, we brought together 50 of our earliest customers, including original Kickstarter backers to experience our next generation of products. These are customers who have been with Purple from the beginning and hearing directly from them is a powerful way to showcase what makes us special.

Building on that momentum, we're launching Grid Day on November 8, along with our Grid it Forward campaign to celebrate our long-time customers and give them the opportunities to share Purple with friends and family. The goal is to activate our existing customer base, generate more word of mouth around Purple and build a stronger community of brand advocates. This is not just a onetime campaign, but something we intend to make a core part of our marketing approach going forward. We're also looking to expand our influencer marketing, affiliate partnerships and consumer PR efforts to reach new audiences and generate more organic conversations about Purple.

Another important priority is strengthening how we communicate the Purple brand. When Purple was founded 10 years ago, our story was centered on innovation and what made our products different. Today, we're building on that foundation by placing greater emphasis on the broader benefits of our products and the role better sleep can play in consumers' health and wellness. Our goal is to position Purple as more than a mattress brand, helping consumers understand how better sleep can contribute to a better life. Our product remains the biggest differentiator we have.

Last month, we unveiled the first major redesign of our proprietary GelFlex Grid technology, featuring a new patented circular geometry that enables more precise contouring and better responsiveness while reducing motion transfer. Innovation has always been at the heart of Purple, and we have a significant number of new products coming to market over the next two quarters with major updates to both our Essentials and hybrid mattress offerings.

Today, we launched our new Essentials collection on our e-com site with a broader market launch expected around March. This is an important launch for our e-commerce business as Essentials represent a significant portion of our mattress sales and offers consumers an accessible entry point to the Purple brand.

As previously mentioned, we're also introducing the new Essentials line and our new hybrid line to retailers at the Las Vegas market in January. Early retailer feedback has been very strong, and we expect these new products to generate meaningful retailer interest. The new hybrid collection will replace Restore with improved construction and performance and improve aesthetics for the multi-brand retail environment. Hybrid is expected to begin rolling into our own stores in the first quarter and begin shipping to wholesale customers in March. We've also created clear differentiation between models and a much more compelling look for the multi-brand environment. Taken together, this is a significant refresh of our mattress portfolio, representing almost 90% of our mattress unit volume.

Innovation also extends beyond mattresses. We recently introduced a new airline travel pillow, and we have a super premium down pillow coming. The airline travel pillow gives us another opportunity to bring the GelFlex grid into more use cases and expand our presence in the travel category. While we're also introducing the Renew grid pillow at Costco, a more accessible alternative to our Harmony pillow, featuring GelFlex Grid on one side, it gives consumers another way to experience what makes Purple different at a more accessible price point.

The third part of our focus is continuing to operate the business with financial discipline. Two years ago, we were focused on stabilizing the business. We consolidated our manufacturing footprint, took costs out and changed the way we operate. Those actions have made us a more efficient business, but the lower wholesale volume is putting temporary pressure on our margins and profitability as we absorb fixed manufacturing costs over a lower production base. We're responding by managing the things we can control. We're keeping a close eye on plant costs, adjusting labor to match production volume and continuing to manage inventory and working capital carefully.

Our sourcing work also continues to create additional opportunities. Supplier diversification initiatives are beginning to show benefits and additional sourcing initiatives are expected to take effect during the first half of 2027. At the end of the quarter, we also took another step to reduce costs by subletting our corporate headquarters and bringing our teams together into the Dream Lab or our innovation center. This not only reduces operating expenses but improves collaboration and brings our people closer to the product we're developing. We continue to focus on the things we can control, costs, working capital, inventory and where we put our investment dollars.

As we move into the fourth quarter, we have several exciting opportunities in front of us. We expect a normal seasonal benefit in DTC, a significant increase in Costco activity supported by a new mattress launch for the holiday season and our first Purple pillow offering there and additional wholesale opportunities as we begin introducing our new Essentials collection. We also have new pillow products coming to market, and we'll continue to invest in marketing and customer experience where we're seeing a return. We don't expect the wholesale business to turn around overnight, but we're increasing our sales coverage, strengthening support of our regional and independent partners and beginning to introduce new products that we believe will help improve performance as we move into 2027. And with that, I'll turn it over to CFO, Bob Lucier.

Robert Lucian

Thank you, Rob, and good afternoon, everyone. As Rob discussed, we had a mixed quarter with continued pressure on revenue, particularly in wholesale. Despite the pressure on the top line, our cost reduction initiatives helped mitigate the impact of lower volumes. We maintained adjusted EBITDA near breakeven and generated positive operating cash flow for the third consecutive quarter. I'll walk through the quarter in more detail, starting with revenue.

Net revenue for the third quarter was $96.5 million, down 19% from the prior year period. The decline was primarily driven by continued weakness in wholesale. By channel, direct-to-consumer or DTC net revenue was $60.9 million, down 9% from last year. The year-over-year DTC comparison was affected by two factors: the initial impact of the June price increases on consumer demand and prior year second quarter Rejuvenate orders being delivered in last year's third quarter, primarily impacting showrooms. DTC revenue improved as the quarter progressed.

August and September combined increased approximately 1% year-over-year. E-commerce revenue was $42.4 million, down 6% versus last year. Encouragingly, trends improved through the quarter. E-commerce sales increased approximately 2% across August and September combined, supported by growth in purple dot com and Amazon. Amazon was a particularly bright spot, benefiting from expanded Prime eligibility, improved product availability and faster delivery, which helped support its strong performance despite the challenging demand environment.

Showroom revenue was $18.5 million, down 16% versus last year. Showroom performance was affected by the June price increases and the previously mentioned prior year Rejuvenate delivery shift. Wholesale revenue was $35.6 million, a 31% reduction versus last year. Regional and independent retailers represented the largest area of weakness. Approximately 1/4 of the reduction was due to an increase of $4 million in reductions of revenue due to certain payments to customers and to manufacture under common control with a customer.

Gross profit was approximately $41.9 million compared with $56.5 million in the prior period presented on the reclassified basis adopted in the second quarter of 2026. Gross margin was 43.4%, down approximately 410 basis points from the prior year period on a reclassified basis. The year-over-year decline reflected lower production leverage and inventory adjustments, partially offset by lower tariff costs and favorable channel mix.

Operating expenses for the quarter were $51.7 million, 25% lower than the prior year period. The year-over-year improvement in operating expenses primarily reflected continued cost discipline and structural savings across the business, including lower marketing and sales expenses, advertising spending and payroll-related costs. We also incurred lower restructuring and impairment charges versus the prior year. GAAP net loss was $1.4 million versus a GAAP net loss of $11.7 million in the prior year period. Adjusted EBITDA was a loss of $0.5 million compared with positive adjusted EBITDA of $0.2 million last year.

We ended September 30, 2026, with cash and cash equivalents of $28.3 million compared with $24.3 million on December 31, 2025. Net inventories were $53.5 million, down 10% from $59.7 million on December 31, 2025, reflecting continued inventory improvements and improved working capital efficiency. Cash flow from operations was positive for the third consecutive quarter and totaled $10.6 million through the first 9 months of fiscal 2026. This was a $38.7 million improvement over the previous year's first 9 months results.

Capital spending in the first nine months was $5.2 million, supporting showroom expansion and investments in our manufacturing operations. We remain focused on disciplined working capital management and expect to continue generating cash in the fourth quarter, which is traditionally our strongest cash flow quarter.

Finally, turning to our outlook for the remainder of 2026. We continue to expect no meaningful recovery in the broader bedding category. We are maintaining our full year revenue guidance of $420 million to $440 million -- our revenue outlook reflects a stronger Q4, supported by an improved marketing plan, normal seasonal strength in DTC and new product introductions, partially offset by continued pressure in wholesale. We now expect full year adjusted EBITDA to be in the range of $15 million to $20 million compared with our prior outlook of $20 million to $25 million, reflecting the impact of continued volume deleverage in our manufacturing operations. With that, I'll turn the call back to Rob.

Robert DeMartini

I want to thank our associates and our partners for the work they continue to put into the business. We're excited about what the future holds regarding the significant amount of new product coming to market and the opportunities to regain momentum with consumers and partners. Our focus is on improving execution and building on the progress we've made across the business.

Finally, we're within six months of our maturity of our outstanding debt. We continue to talk with our lenders about the best path forward. Additionally, our special committee continues to evaluate strategic alternatives, and we continue to engage with interested parties regarding the potential opportunities that could provide Purple with the scale and the capital needed to continue delivering less pain and better sleep to our consumers. And now with that, I'll turn it over to the moderator for Q&A.

Operator

[Operator Instructions] Your first question comes from the line of Brad Thomas with KeyBanc Capital Markets.

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Bradley Thomas

I wanted to first follow up on the wholesale performance and just wondering how much you think the performance in the quarter was a function of what's going on in the industry and kind of broader price increases pushed through by the whole industry versus some of the dynamics specific to Purple?

Robert DeMartini

Brad, thank you for the question. And there's no question there's accountability in all of those buckets that you raised. We believe the category remains weak, mid- to high single digits and got a little bit weaker during the quarter. But clearly, some of it is us, and we own that. We've got to execute better with our partners. Our product line is a little bit tired, particularly in our regional and independent wholesalers as we focus on other parts of the wholesale channel of late. And that's why we're accelerating the innovation as fast as we can. And I clearly cannot put all of this on the category that we own a chunk of it and we've got to fix it.

Bradley Thomas

I appreciate that. And as we think about some of the new products coming, certainly seems like an exciting opportunity. I'm sure that driving growth overall is a key priority here. But maybe can you talk a little bit about potential margin implications from some of the new products and how you're thinking about perhaps some trade down or cannibalization as you roll out maybe some lower price point items?

Robert DeMartini

Yes. The line doesn't have any lower prices in it, but we also won't take price with it because of the prices we took in June. Most of the margin hurt we experienced this quarter has definitely been cost absorption. And so getting the line growing, we'll see the margins bounce back to the progress we've been consistently making over the last 4 quarters. So the margin profile of the new products is similar to the old, but we think the volume energy they'll bring will get the margins back up to where we've got to be well north of 45% on a consistent basis.

Operator

Your next question comes from the line of Brian Nagel with Oppenheimer.

Brian Nagel

[Technical Difficulty] So the first question I have, and I want to follow up a bit on -- I guess, on Brad's question, just on wholesale. So the pressures you're talking about this evening, is this -- is there something new? Or is it more that this has been an issue for you in that channel that needs to be correct? Is there something that's really that there's like an inflection point on what I'm asking?

Robert DeMartini

Brian, I wouldn't call it an inflection point, but I think there's a couple of things going on. Over the last three quarters, we've had our focus in our wholesale channel tied to a couple of customers and probably at the expense of some of our regional independents. And we've got to get back and make sure we're servicing them as well as we're servicing our necessarily largest customers. So I wouldn't call it an inflection point. I just call it an outcome of trying to do the right thing and not covering our bases as well as we should.

I also think the price increases in June because of the input pressure, they were certainly higher than I would have liked to have taken. And I think the consumer response to them in July, in particular, was pretty negative. Our July 4 was not good at all, and it's taken time to come back. We've seen the demand return in our DTC business and August and September in both channels were much, much stronger than July. And the wholesale channel has been a little bit slower coming. So I don't think there's an inflection point, but I think we definitely need to get our new product to market. And it's the first grid change in the company's history.

And I got to say it's the first time we've designed the product to compete aesthetically better in a multi-brand environment. Being born of a DTC company, I don't think we gave it the attention it needs. And if you don't catch the consumer's attention, it makes it harder to get them to get on the bed and feel how good the product works. So we're excited about getting that to market.

Brian Nagel

That's helpful. A follow-up with regard to price increases, clearly, there's no price increases happening really across consumer given supply chain input costs. But as you're looking at your, I guess your supply chain, do you think you're largely done with price increases now? Or are you still having to work higher prices through?

Robert DeMartini

No. Bob, do you want to talk to that?

Robert Lucian

Yes, sure. Right now, we believe we're done. We're watching prices of our raw materials to make sure that is the case. We took pricing in the middle of June and that took effect immediately on our DTC business for our showrooms and for the e-com. However, it takes a while for that to filter through to our wholesale customers. So we did not get that full pricing all the way through Q3 for all of our customers. We'll see that show up in Q4, and that's one of the reasons why our ability in Q4 to improve our gross margin will improve.

Brian Nagel

Got it. And then one final question, if I could. Just with respect to the debt, the refinancing, are there parameters you can give us for how we should be thinking about the potential options?

Robert DeMartini

Yes. We've got options ahead of us, and we're trying to evaluate which ones are best and which ones are attainable. And as the quarter unfolds and we get into the beginning of next year, I think we'll get much more clear on exactly which option we're going to take going forward.

Operator

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.