Hour Loop Reports Second Quarter 2022 Results
Hour Loop, Inc. (NASDAQ: HOUR) reported Q2 2022 revenues of $14.8 million, a 27.1% increase year-over-year, despite a decline in e-commerce traffic. The net loss narrowed to $0.31 million from last year's net income of $1.1 million. Operating expenses rose 52.8% to $8.7 million due to increased platform fees and labor costs. Cash and equivalents fell to $2.3 million from $10.6 million at 2021 year-end. The company maintains its full-year revenue guidance of $81 million to $90 million, projecting 30% to 45% growth.
- Q2 2022 revenues increased 27.1% to $14.8 million.
- Net loss narrowed significantly compared to Q1 2022.
- Full-year 2022 revenue guidance remains robust at $81-$90 million (30%-45% growth).
- Net loss of $0.31 million in Q2 compared to net income of $1.1 million last year.
- Operating expenses rose 52.8% to $8.7 million.
- Gross profit percentage declined 1.92% to 56.46%.
Demonstrates Strong Execution Despite Challenging Macroeconomic Environment and Unfavorable e-Commerce Traffic in Q2
Provides Full Year 2022 Revenue Guidance Range of
REDMOND, Wash., Aug. 12, 2022 (GLOBE NEWSWIRE) -- Hour Loop, Inc. (NASDAQ: HOUR) (“Hour Loop”), a leading online retailer, announces its financial and operational results for the second quarter ended June 30, 2022.
Financial Highlights for Second Quarter 2022:
- Total revenues increased
27.1% and19.8% to$14.8 million , compared to$11.6 million in the year-ago period and$12.4 million for the first quarter of 2022, respectively. - Net loss totaled
$0.31 million , compared to net income of$1.1 million in the year-ago period and net loss of$0.65 million for the first quarter of 2022. - Cash used in operating activities for the six months ended June 30, 2022 was
$13.2 million , compared to$0.2 million in the year-ago period.
Management Commentary
“We’re pleased with our second quarter 2022 performance as we reported strong financial and operational results despite the significantly impacted consumer spending environment driven by inflationary and supply chain pressures and the trending down traffic in overall e-commerce,” said Sam Lai, CEO of Hour Loop. “Against this backdrop, we further demonstrated our ability to execute on our strategy and drive growth as planned. Given that our investment in labor and inventories were frontloaded in the first quarter, we have delivered second quarter 2022 revenues of
“While we are encouraged by our progress, we are not immune to the challenging macroeconomic environment, which impacted our gross profit percentage as a result of increased operating expenses, FBA fees, and a strong competitive environment. However, despite these challenges, we are frontloading our investments for the year while projecting to show profitability and maintain double digit growth for the full year 2022. We believe our investments are necessary to grow our headcount, rapidly scale, and set a foundation for future success once these headwinds ease, and we are building on our momentum since our IPO. We look forward to continuing to execute, drive growth, and ultimately deliver increased value for our shareholders.”
Second Quarter 2022 Financial Results
Total revenues in the second quarter of 2022 were
Gross profit percentage declined
Operating expenses increased
Net loss in the second quarter was
As of June 30, 2022, the Company had
Inventories as of June 30, 2022, were
Full Year 2022 Financial Outlook
For the full year 2022, the Company maintains its guidance for 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. The Company expanded its operations to www.walmart.com in October 2020. To date, the Company has generated practically all of its revenue as a third-party seller on www.amazon.com and only a negligible amount of revenue from its own website and Walmart. Hour Loop manages more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, apparels, and electronics. The Company's primary strategy is to bring most of its vendors product selections to the customers. It has advanced software that assists the Company 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 the Company's business strategy, product development and industry trends. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company. While the Company 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 the Company 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 the Company'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. The Company 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2022 (Unaudited) and December 31, 2021
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 2,306,430 | $ | 10,592,572 | ||||
| Accounts receivable, net | 151,607 | 125,991 | ||||||
| Inventory, net | 14,601,346 | 7,041,864 | ||||||
| Prepaid expenses and other current assets | 831,839 | 965,298 | ||||||
| Total current assets | 17,891,222 | 18,725,725 | ||||||
| Property and equipment, net | 156,335 | 15,667 | ||||||
| Deferred tax assets | 325,030 | 45,488 | ||||||
| Right-of-use lease assets | 485,066 | 30,111 | ||||||
| TOTAL ASSETS | $ | 18,857,653 | $ | 18,816,991 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 5,358,935 | $ | 9,539,258 | ||||
| Accrued expenses and other current liabilities | 1,255,714 | 1,282,161 | ||||||
| Due to related parties | 4,294,731 | 5,214,794 | ||||||
| Income taxes payable | 126,333 | 126,333 | ||||||
| Current operating lease liabilities | 303,923 | - | ||||||
| Total current liabilities | 11,339,636 | 16,162,546 | ||||||
| Non-current liabilities | ||||||||
| Long-term operating lease liabilities | 184,704 | - | ||||||
| Total liabilities | 11,524,340 | 16,162,546 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock: | - | - | ||||||
| Common stock: | 3,504 | 3,330 | ||||||
| Additional paid-in capital | 5,645,322 | 4,291 | ||||||
| Retained earnings | 1,696,400 | 2,654,695 | ||||||
| Accumulated other comprehensive loss | (11,913 | ) | (7,871 | ) | ||||
| Total stockholders’ equity | 7,333,313 | 2,654,445 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 18,857,653 | $ | 18,816,991 | ||||
HOUR LOOP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the Periods Ended June 30, 2022 AND 2021
(Unaudited)
| Three Months | Three Months | Six Months | Six Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues, net | $ | 14,800,518 | $ | 11,643,230 | $ | 27,154,501 | $ | 20,966,143 | ||||||||
| Cost of revenues | (6,443,910 | ) | (4,845,441 | ) | (12,341,179 | ) | (8,939,993 | ) | ||||||||
| Gross profit | 8,356,608 | 6,797,789 | 14,813,322 | 12,026,150 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling and marketing | 6,480,625 | 4,803,598 | 12,006,727 | 8,630,792 | ||||||||||||
| General and administrative | 2,275,642 | 925,698 | 3,951,606 | 1,462,507 | ||||||||||||
| Total operating expenses | 8,756,267 | 5,729,296 | 15,958,333 | 10,093,299 | ||||||||||||
| (Loss) income from operations | (399,659 | ) | 1,068,493 | (1,145,011 | ) | 1,932,851 | ||||||||||
| Other (expenses) income | ||||||||||||||||
| Other expense | (3,944 | ) | (3,754 | ) | (9,394 | ) | (4,624 | ) | ||||||||
| Interest expense | (20,567 | ) | (10,328 | ) | (104,125 | ) | (10,328 | ) | ||||||||
| Other income | 13,754 | 52,098 | 20,693 | 54,504 | ||||||||||||
| Total other (expenses) income, net | (10,757 | ) | 38,016 | (92,826 | ) | 39,552 | ||||||||||
| (Loss) income before income taxes | (410,416 | ) | 1,106,509 | (1,237,837 | ) | 1,972,403 | ||||||||||
| Provision for income taxes | 97,009 | - | 279,542 | - | ||||||||||||
| Net (loss) income | (313,407 | ) | 1,106,509 | (958,295 | ) | 1,972,403 | ||||||||||
| Other comprehensive (loss) income | ||||||||||||||||
| Foreign currency translation adjustments | (9,497 | ) | 2,893 | (11,913 | ) | 1,671 | ||||||||||
| TOTAL COMPREHENSIVE (LOSS) INCOME | $ | (322,904 | ) | $ | 1,109,402 | $ | (970,208 | ) | $ | 1,974,074 | ||||||
| Basic and diluted (loss) income per common share | $ | (0.01 | ) | $ | 0.03 | $ | (0.03 | ) | $ | 0.06 | ||||||
| Weighted-average number of common shares outstanding | 34,939,695 | 33,300,000 | 33,300,000 | 33,300,000 | ||||||||||||
HOUR LOOP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2022 and 2021
(Unaudited)
| Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Stockholders’ Equity | |||||||||||||||||||
| BALANCE AT March 31, 2021 | 33,300,000 | $ | 3,330 | $ | 4,291 | $ | 4,885,513 | $ | (4,403 | ) | $ | 4,888,731 | ||||||||||||
| Contribution | - | |||||||||||||||||||||||
| Distribution | (2,132,000 | ) | (2,132,000 | ) | ||||||||||||||||||||
| Currency translation adjustments | 1,671 | 1,671 | ||||||||||||||||||||||
| Net Income | - | - | - | 1,106,509 | - | 1,106,509 | ||||||||||||||||||
| BALANCE AT June 30, 2021 | 33,300,000 | $ | 3,330 | $ | 4,291 | $ | 3,860,022 | $ | (2,732 | ) | $ | 3,864,911 | ||||||||||||
| BALANCE AT March 31, 2022 | 35,032,753 | $ | 3,503 | $ | 5,615,322 | $ | 2,009,807 | $ | (10,287 | ) | $ | 7,618,345 | ||||||||||||
| Stock based compensation | 9,825 | 1 | 30,000 | 30,001 | ||||||||||||||||||||
| Currency translation adjustments | (1,626 | ) | (1,626 | ) | ||||||||||||||||||||
| Net Loss | - | - | - | (313,407 | ) | - | (313,407 | ) | ||||||||||||||||
| BALANCE AT June 30, 2022 | 35,042,578 | $ | 3,504 | $ | 5,645,322 | $ | 1,696,400 | $ | (11,913 | ) | $ | 7,333,313 | ||||||||||||
FAQ
What were Hour Loop's Q2 2022 revenue figures?
How did Hour Loop perform financially compared to last year?
What is Hour Loop's revenue guidance for 2022?
What factors contributed to Hour Loop's increased operating expenses?
What was the trend in Hour Loop's gross profit percentage in Q2 2022?
