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The DTC space has been colored lately by a slew of layoffs at top players, with Glossier, Allbirds and Warby Parker all letting go of employees within weeks of each other. They’re not alone: Other retail darlings like Shopify and Klarna, and even mass merchant Walmart, have made cuts to their workforce in recent months amid decelerating e-commerce trends and record inflation.

Earnings across the board in retail have been depressed, with major companies slashing their guidance as consumers avoid spending on discretionary categories. Last week was an especially big reporting week in the DTC space and some fared better than others. Below we break down the results from major players including Purple, Bark, Warby Parker, Allbirds, Canada Goose and more.

Allbirds

Key numbers from Allbirds’ quarter
Metric Amount Year-over-year change
Net sales $78.2 million +15%
Net loss $29.4 million +287%
Operating loss $29 million +604%

Source: Allbirds press release

Allbirds earnings came shortly after the brand laid off 8% of its global corporate workforce and carried much the same tone. The company’s second quarter net loss was up by 287% and its total loss for the first half of the year (over $51 million) has already exceeded its loss for the entirety of 2021.

That said, revenue was still up by 15% and sales from stores grew by nearly 120%. Allbirds also announced it was changing its approach to apparel, and would sunset its leggings category to focus instead on basics and other seasonless clothing.

“[W]ith external conditions becoming less favorable Allbirds needs to look at how it can shift its business model to maximize sales and minimize costs,” GlobalData Managing Director Neil Saunders wrote in emailed comments. “Some layoffs have already been made, but we suspect more action is needed on the sales front to both keep investors satisfied and the bottom line from plunging any further into the red.”

Olaplex

Key numbers from Olaplex’s quarter
Metric Amount Year-over-year change
Net sales $211 million +39%
Net income $88 million +78%
Operating income $120 million +57%

Source: Olaplex press release

Unlike many others in the retail industry, there were no cuts to guidance at Olaplex this earnings period. The retailer reaffirmed its outlook on the back of 38.6% revenue growth.

“This reflects the successful execution of our strategy as we disrupt the prestige haircare market with science-based, patent-protected products that are designed to fix real hair problems from first use,” CEO JuE Wong said in a statement. “We continue to see strength in prestige beauty and the prestige hair care category as we believe consumers are prioritizing their own wellbeing – even during uncertain times.”

DTC revenue rose 19.3% and its “specialty retail” channel was up by nearly 70%. Olaplex’s wholesale operations have been a boon for the retailer in the past.

Unlike many of its peers, Olaplex has strong net income, and posted close to 80% growth in that metric for Q2. For the first six months of the year, net income is up 57.7%.

Last quarter, Chief Financial Officer Eric Tiziani pointed to Olaplex’s profitability as a differentiator, adding that the company has “high cash generation and we’re in a consumer replenishable category with strong growth tailwinds in 2022 and beyond.”

Purple

Key numbers from Purple’s quarter
Metric Amount Year-over-year change
Net sales $144 million -21%
Net loss $8.3 million -$10.9 million
Operating loss $12 million +376%

Source: Purple press release

Mattress brand Purple joined the ranks of struggling home retailers in Q2 with a 21% revenue decline that the company attributed to inflation, less demand for home products and the end of positive influences like stimulus payments that helped buoy last year’s sales. The company also cut its advertising spend by 56% year over year.

“While the continued shift in demand away from home related categories and the impact of inflation on consumer discretionary spending is delaying our top-line recovery, we remain confident that our four strategic initiatives – operational excellence, brand elevation, channel development and accelerating innovation – are the right building blocks for delivering long-term profitable growth,” CEO Rob DeMartini said in a statement.

Sales declines were steeper in the DTC business, where revenue decreased almost 30%. Wholesale revenue was also down, but by a more palatable 5.9%. The company is expanding that channel and it now makes up 43% of sales. The declines in DTC were attributed to the advertising pullback, which sent e-commerce sales down 39%. 

DeMartini highlighted improvements in profitability, saying on a call with analysts that the company was “healthier” than the start of the year, and stressed that the brand’s issues were largely shared by the entire industry.



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