Hour Loop Reports Full Year 2023 Results
- Hour Loop achieved a substantial revenue growth of 37.7% in 2023, reaching $132.1 million.
- The net loss for the year was $2.4 million, compared to $1.5 million in 2022.
- Despite challenges like inflation and intense competition, Hour Loop managed to decrease operating expenses percentage by 0.5%.
- The company's cash position decreased to $2.5 million in 2023, from $4.6 million in 2022.
- Hour Loop anticipates a net revenue range of $145 million to $172 million for 2024, with expected net income between $0.5 million to $2 million.
- Gross margin decreased by 0.8% to 50.3% in 2023 due to increased market competition and aggressive clearance sales.
- Net loss increased to $2.4 million in 2023, impacting the company's cash position.
- Inventory decreased to $14.3 million in 2023, reflecting sales made throughout the year.
Insights
The reported revenue growth of 37.7% in a challenging e-commerce landscape is a notable achievement for Hour Loop, Inc. This outperformance relative to peers indicates a robust operational model and effective market penetration strategies. However, the decrease in gross margin by 0.8% and an increase in net loss from the previous year are areas of concern. The reduction in operating expenses as a percentage of net revenues suggests effective cost management, yet it was insufficient to counterbalance the margin contraction.
Investors should be aware of the potential risks associated with the company's increased competition and aggressive discounting strategies, which are likely contributing factors to the reduced margins. The guidance for 2024, with expected net income turning positive, reflects management's confidence but must be viewed in the context of the broader economic uncertainties and the company's recent performance trends.
Hour Loop's financial health can be partially assessed by examining its cash position, which decreased significantly year-over-year. This decline, coupled with a net loss, may raise questions about the company's liquidity and long-term sustainability. The reduction in inventories suggests that the company is effectively turning over its inventory, which is positive for cash flow.
From an investment perspective, the projected revenue growth for 2024 indicates optimism about the company's future performance. However, investors should scrutinize the company's ability to improve profitability and manage expenses amidst inflationary pressures and higher Amazon fees. The provided guidance range is quite broad, which suggests there is still a degree of uncertainty regarding the company's future performance.
Hour Loop's performance must be contextualized within the broader e-commerce sector and macroeconomic environment. The company's growth amidst inflationary pressures and a challenging e-commerce environment is commendable. Nonetheless, the macroeconomic headwinds, such as inflation and potential shifts in consumer spending, could affect future performance. The company's ability to manage these headwinds while maintaining growth will be critical to its success.
Long-term sustainability will hinge on the company's ability to adapt to the dynamic e-commerce market. The guidance for 2024 indicates a cautious yet optimistic outlook, which seems reasonable given the current economic uncertainty. Stakeholders should monitor how Hour Loop navigates these challenges and capitalizes on demand for its products.
Demonstrates Strong Revenue Growth Despite Challenging e-Commerce Environment
Provides Full Year 2024 Revenue and Net Income Guidance
Redmond, WA, March 26, 2024 (GLOBE NEWSWIRE) -- Hour Loop, Inc. (NASDAQ: HOUR) (“Hour Loop”), a leading online retailer, announces its financial and operational results for the year ended December 31, 2023.
Financial Highlights for 2023:
- Net revenues increased
37.7% to$132.1 million , compared to$95.9 million in 2022; - Net loss totaled
$2.4 million , compared to net loss$1.5 million in 2022; and - Cash used for operating activities was
$2.1 million and$11.6 million for the year ended December 31, 2023 and 2022, respectively.
Management Commentary
“We are pleased to report our full year 2023 results, in which we continued to deliver significant revenue growth,” said Sam Lai, CEO of Hour Loop. “The revenue growth rate for 2023 was
“However, our gross margin, compared with 2022, was negatively affected by the inflation impacted macroeconomy, a challenging e-commerce environment, intense competition across the industry, and more aggressive clearance sales during the holiday season.
Our operating expenses percentage decreased compared with 2022 because of efforts made for expense management this year amid higher Amazon related fees. Overall, we believe we’ve built a solid foundation to continue generating strong growth. We also aim to continue making improvements on profitability.”
“Looking forward, we’re cautiously optimistic. Despite an uncertain economy, we continue to see strong demand for our products so far in 2024. We are confident in our ability to continue delivering value to our vendors, customers, and shareholders.”
Full Year 2023 Financial Results
Net revenues in 2023 were
Gross margin decreased
Operating expenses percentage decreased
Net loss in 2023 was
As of December 31, 2023, the Company had
Inventories as of December 31, 2023, were
Full Year 2024 Financial Outlook
For the full year 2024, Hour Loop is providing guidance for net revenue to be in the range of
About Hour Loop, Inc.
Hour Loop is an online retailer engaged in e-commerce retailing in the U.S. market. It has operated as a third-party seller on www.amazon.com and has sold merchandise on its website at www.hourloop.com since 2013. Hour Loop further expanded its operations to other marketplaces such as Walmart, eBay, and Etsy. To date, Hour Loop has generated practically all its revenue as a third-party seller on www.amazon.com and only a negligible amount of revenue from its own website and other marketplaces. Hour Loop manages more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, apparel, and electronics. Hour Loop’s primary strategy is to bring most of its vendors’ product selections to the customers. It has advanced software that assists Hour Loop in identifying product gaps so it can keep such products in stock year-round including the entirety of the last quarter (holiday season) of the calendar year. In upcoming years, Hour Loop plans to expand its business rapidly by increasing the number of business managers, vendors, and SKUs.
Forward-Looking Statements
This press release contains statements that constitute "forward-looking statements" including with respect to Hour Loop’s business strategy, product development and industry trends. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of Hour Loop. While Hour Loop believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to Hour Loop on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in Hour Loop’s filings with the Securities and Exchange Commission, as the same may be updated from time to time. Thus, actual results could be materially different. Hour Loop undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, after the date of this release, except as required by law.
Investor Contact
Finance Department
finance@hourloop.com
HOUR LOOP, INC.
CONSOLIDATED BALANCE SHEETS
(In U.S. Dollars, except for share data)
As of December 31, 2023 and 2022
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 2,484,153 | $ | 4,562,589 | ||||
| Accounts receivable, net | 747,650 | 352,379 | ||||||
| Inventory, net | 14,276,555 | 18,801,529 | ||||||
| Prepaid expenses and other current assets | 504,973 | 741,243 | ||||||
| Total current assets | 18,013,331 | 24,457,740 | ||||||
| Property and equipment, net | 148,788 | 274,195 | ||||||
| Deferred tax assets | 1,304,215 | 549,320 | ||||||
| Operating lease right-of-use lease assets | 83,946 | 450,721 | ||||||
| Total non-current assets | 1,536,949 | 1,274,236 | ||||||
| TOTAL ASSETS | $ | 19,550,280 | $ | 25,731,976 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 3,812,954 | $ | 6,651,721 | ||||
| Credit cards payable | 4,404,445 | 5,231,532 | ||||||
| Short-term loan | 652,422 | 652,316 | ||||||
| Operating lease liabilities-current | 82,269 | 385,216 | ||||||
| Accrued expenses and other current liabilities | 1,972,512 | 1,742,972 | ||||||
| Total current liabilities | 10,924,602 | 14,663,757 | ||||||
| Non-current liabilities | ||||||||
| Operating lease liabilities-non-current | 2,363 | 64,945 | ||||||
| Due to related parties | 4,170,418 | 4,170,418 | ||||||
| Total non-current liabilities | 4,172,781 | 4,235,363 | ||||||
| Total liabilities | 15,097,383 | 18,899,120 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock: | - | - | ||||||
| Common stock: | 3,508 | 3,506 | ||||||
| Additional paid-in capital | 5,727,650 | 5,675,320 | ||||||
| (Accumulated deficit) retained earnings | (1,252,622 | ) | 1,177,072 | |||||
| Accumulated other comprehensive loss | (25,639 | ) | (23,042 | ) | ||||
| Total stockholders’ equity | 4,452,897 | 6,832,856 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 19,550,280 | $ | 25,731,976 | ||||
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
HOUR LOOP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In U.S. Dollars, except for share and per share data)
For the years Ended December 31, 2023 and 2022
| 2023 | 2022 | |||||||
| Revenues, net | $ | 132,124,202 | $ | 95,930,091 | ||||
| Cost of revenues | (65,606,947 | ) | (46,942,770 | ) | ||||
| Gross profit | 66,517,255 | 48,987,321 | ||||||
| Operating expenses | ||||||||
| Selling and marketing | 61,135,227 | 42,221,425 | ||||||
| General and administrative | 8,385,451 | 8,681,682 | ||||||
| Total operating expenses | 69,520,678 | 50,903,107 | ||||||
| Loss from operations | (3,003,423 | ) | (1,915,786 | ) | ||||
| Other (expenses) income | ||||||||
| Other expense | (9,542 | ) | (9,950 | ) | ||||
| Interest expense | (248,779 | ) | (144,479 | ) | ||||
| Other income | 101,290 | 130,429 | ||||||
| Total other expenses | (157,031 | ) | (24,000 | ) | ||||
| Loss before income taxes | (3,160,454 | ) | (1,939,786 | ) | ||||
| Income tax benefit | 730,760 | 462,163 | ||||||
| Net loss | (2,429,694 | ) | (1,477,623 | ) | ||||
| Other comprehensive loss | ||||||||
| Foreign currency translation adjustments | (2,597 | ) | (15,171 | ) | ||||
| Total comprehensive loss | $ | (2,432,291 | ) | (1,492,794 | ) | |||
| Basic and diluted loss per common share | $ | (0.07 | ) | (0.04 | ) | |||
| Weighted-average number of common shares outstanding | 35,066,592 | 34,991,666 | ||||||
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
HOUR LOOP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars)
For the years Ended December 31, 2023 and 2022
| 2023 | 2022 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (2,429,694 | ) | $ | (1,477,623 | ) | ||
| Reconciliation of net loss to net cash used in operating activities: | ||||||||
| Depreciation expenses | 138,001 | 79,084 | ||||||
| Amortization of Operating lease right-of-use lease assets | 387,446 | 310,161 | ||||||
| Deferred tax assets | (754,895 | ) | (503,832 | ) | ||||
| Stock-based compensation | 52,332 | 91,013 | ||||||
| Inventory allowance | 675,886 | 657,543 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (395,271 | ) | (226,388 | ) | ||||
| Inventory | 3,849,088 | (12,417,208 | ) | |||||
| Prepaid expenses and other current assets | 236,270 | (352,113 | ) | |||||
| Accounts payable | (2,838,767 | ) | 1,445,824 | |||||
| Credit cards payable | (827,087 | ) | 898,171 | |||||
| Accrued expenses and other current liabilities | 229,540 | 175,436 | ||||||
| Operating lease liabilities | (386,224 | ) | (283,244 | ) | ||||
| Net cash used in operating activities | (2,063,375 | ) | (11,603,176 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (14,823 | ) | (339,518 | ) | ||||
| Net cash used in investing activities | (14,823 | ) | (339,518 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments to related parties | - | (1,024,188 | ) | |||||
| Repayments from related parties | - | 138,854 | ||||||
| Proceeds from Issuance of shares | - | 6,156,360 | ||||||
| Proceeds from Short-term debt | - | 652,316 | ||||||
| Net cash provided by financing activities | - | 5,923,342 | ||||||
| Effect of changes in foreign currency exchange rates | (238 | ) | (10,631 | ) | ||||
| Net change in cash | (2,078,436 | ) | (6,029,983 | ) | ||||
| Cash at beginning of year | 4,562,589 | 10,592,572 | ||||||
| Cash at end of year | $ | 2,484,153 | $ | 4,562,589 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | 406,103 | $ | 4,300 | ||||
| Cash paid for income tax | $ | 1,696 | $ | 470,601 | ||||
| Noncash investing and financing activities: | ||||||||
| Operating lease right-of-use of assets and operating lease liabilities recognized | $ | 27,249 | $ | 701,526 | ||||
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
FAQ
What was Hour Loop's net revenue in 2023?
What was Hour Loop's net loss in 2023?
What is Hour Loop's full year 2024 revenue guidance?
What is Hour Loop's expected net income range for 2024?
