Hour Loop Reports Third Quarter 2023 Results
- Hour Loop reported a 66.1% increase in net revenues to $29.2 million for the third quarter of 2023 compared to the year-ago period, showcasing significant growth.
- The company's net loss totaled $0.02 million, a decrease from the net income of $0.15 million in the year-ago period, indicating financial challenges.
- Hour Loop's gross margin was negatively affected by the challenging e-commerce environment and intense competition, but the company showed quarter-over-quarter margin improvement, reaching 52.6% in the third quarter.
- The operating expenses percentage was reduced compared to the year-ago period due to expense management efforts, indicating positive cost control measures.
- The company's full year 2023 revenue guidance has been increased to a range of $145 million to $153 million, representing a 40% to 48% year-over-year growth, demonstrating confidence in future performance.
- None.
Demonstrates Strong Revenue Growth Despite Challenging e-Commerce Environment
Increases Full Year 2023 Revenue Guidance
REDMOND, Wash., Nov. 13, 2023 (GLOBE NEWSWIRE) -- Hour Loop, Inc. (NASDAQ: HOUR) (“Hour Loop”), a leading online retailer, announces its financial and operational results for the quarter ended September 30, 2023.
Financial Highlights for Third Quarter 2023:
- Net revenues increased
66.1% to$29.2 million , compared to$17.6 million in the year-ago period; - Net loss totaled
$0.02 million , compared to net income$0.15 million in the year-ago period; and - Cash used for operating activities was
$3.8 million and$14.5 million for the nine months ended September 30, 2023 and 2022, respectively.
Management Commentary
“We are pleased to report our third quarter 2023 results, in which we continued to deliver significant revenue growth,” said Sam Lai, CEO of Hour Loop. “The revenue growth rate for the third quarter was
“However, our gross margin, compared with the year-ago period, was negatively affected by the inflation impacted macroeconomy, a challenging e-commerce environment and intense competition across the industry. Nevertheless, our QoQ margin improvement remained. Gross margin for the third quarter was
“Our operating expenses percentage was reduced compared with the year-ago period because of efforts made for expense management this year. 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 2023. We are confident in our ability to continue delivering value to our vendors, customers, and shareholders.”
Third Quarter 2023 Financial Results
Net revenues in the third quarter of 2023 were
Gross profit percentage decreased
Operating expenses percentage decreased
Net loss in the third quarter of 2023 was
As of September 30, 2023, the Company had
Inventories as of September 30, 2023, were
Full Year 2023 Financial Outlook
For the full year 2023, Hour Loop increased its guidance for gross 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 September 30, 2023 and December 31, 2022 (Unaudited) | ||||||||
September 30, | December 31, | |||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 562,612 | $ | 4,562,589 | ||||
Accounts receivable, net | 737,154 | 352,379 | ||||||
Inventory, net | 23,725,207 | 18,801,529 | ||||||
Prepaid expenses and other current assets | 1,153,552 | 741,243 | ||||||
Total current assets | 26,178,525 | 24,457,740 | ||||||
Property and equipment, net | 175,139 | 274,195 | ||||||
Deferred tax assets | 1,057,710 | 549,320 | ||||||
Right-of-use lease assets | 195,047 | 450,721 | ||||||
Total non-current assets | 1,427,896 | 1,274,236 | ||||||
TOTAL ASSETS | $ | 27,606,421 | $ | 25,731,976 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Short-term loan | $ | 620,732 | $ | 652,316 | ||||
Accounts payable | 16,909,757 | 11,883,253 | ||||||
Accrued expenses and other current liabilities | 900,654 | 1,742,972 | ||||||
Operating lease liabilities-current | 171,626 | 385,216 | ||||||
Total current liabilities | 18,602,769 | 14,663,757 | ||||||
Non-current liabilities | ||||||||
Operating lease liabilities-non-current | 5,598 | 64,945 | ||||||
Due to related parties | 4,170,418 | 4,170,418 | ||||||
Total non-current liabilities | 4,176,016 | 4,235,363 | ||||||
Total liabilities | 22,778,785 | 18,899,120 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity | ||||||||
Preferred stock: | - | - | ||||||
Common stock: | 3,507 | 3,506 | ||||||
Additional paid-in capital | 5,709,652 | 5,675,320 | ||||||
(Accumulated deficit) retained earnings | (842,596 | ) | 1,177,072 | |||||
Accumulated other comprehensive loss | (42,927 | ) | (23,042 | ) | ||||
Total stockholders’ equity | 4,827,636 | 6,832,856 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 27,606,421 | $ | 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 Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) | ||||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | |||||||||||||
Ended | Ended | Ended | Ended | |||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues, net | $ | 29,152,360 | $ | 17,556,053 | $ | 72,637,417 | $ | 44,710,554 | ||||||||
Cost of revenues | (13,819,798 | ) | (7,999,769 | ) | (36,331,604 | ) | (20,340,948 | ) | ||||||||
Gross profit | 15,332,562 | 9,556,284 | 36,305,813 | 24,369,606 | ||||||||||||
Operating expenses | ||||||||||||||||
Selling and marketing | 13,632,333 | 7,779,145 | 33,385,216 | 19,785,872 | ||||||||||||
General and administrative | 1,682,242 | 1,740,427 | 5,353,403 | 5,692,033 | ||||||||||||
Total operating expenses | 15,314,575 | 9,519,572 | 38,738,619 | 25,477,905 | ||||||||||||
Income (Loss) from operations | 17,987 | 36,712 | (2,432,806 | ) | (1,108,299 | ) | ||||||||||
Other (expenses) income | ||||||||||||||||
Other expense | (3,702 | ) | (6,651 | ) | (18,419 | ) | (16,045 | ) | ||||||||
Interest expense | (62,476 | ) | (22,876 | ) | (185,964 | ) | (127,001 | ) | ||||||||
Other income | 70,683 | 155,983 | 109,131 | 176,676 | ||||||||||||
Total other income (expenses), net | 4,505 | 126,456 | (95,252 | ) | 33,630 | |||||||||||
Income (Loss) before income taxes | 22,492 | 163,168 | (2,528,058 | ) | (1,074,669 | ) | ||||||||||
Income tax (expense) benefit | (37,548 | ) | (12,963 | ) | 508,390 | 266,579 | ||||||||||
Net (loss) income | (15,056 | ) | 150,205 | (2,019,668 | ) | (808,090 | ) | |||||||||
Other comprehensive (loss) income | ||||||||||||||||
Foreign currency translation adjustments | (12,032 | ) | 12,441 | (19,885 | ) | 8,399 | ||||||||||
Total comprehensive (loss) income | $ | (27,088 | ) | $ | 162,646 | $ | (2,039,553 | ) | $ | (799,691 | ) | |||||
Basic and diluted (loss) income per common share | $ | (0.00 | ) | $ | 0.01 | $ | (0.06 | ) | $ | (0.02 | ) | |||||
Weighted-average number of common shares outstanding | 35,058,340 | 33,300,058 | 35,061,286 | 34,973,580 |
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 Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) | ||||||||
Nine Months | Nine Months | |||||||
Ended | Ended | |||||||
September 30, | September 30, | |||||||
2023 | 2022 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (2,019,668 | ) | $ | (808,090 | ) | ||
Reconciliation of net loss to net cash used in operating activities: | ||||||||
Depreciation expenses | 100,441 | 39,993 | ||||||
Amortization of right-of-use lease assets | 262,913 | 212,126 | ||||||
Deferred tax assets | (508,390 | ) | (266,709 | ) | ||||
Stock-based compensation | 34,333 | 76,013 | ||||||
Inventory allowance | 130,319 | 605,316 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (384,775 | ) | (137,434 | ) | ||||
Inventory | (5,053,997 | ) | (14,921,838 | ) | ||||
Prepaid expenses and other current assets | (412,309 | ) | (467,412 | ) | ||||
Accounts payable | 5,026,504 | 1,474,511 | ||||||
Accrued expenses and other current liabilities | (683,276 | ) | (152,606 | ) | ||||
Operating lease liabilities | (280,333 | ) | (179,701 | ) | ||||
Net cash used in operating activities | (3,788,238 | ) | (14,525,831 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (14,024 | ) | (268,342 | ) | ||||
Net cash used in investing activities | (14,024 | ) | (268,342 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments to related parties | (159,042 | ) | (898,583 | ) | ||||
Proceeds from Short-term debt | - | 630,915 | ||||||
Proceeds from issuance of shares | - | 6,156,360 | ||||||
Net cash provided by financing activities | (159,042 | ) | 5,888,692 | |||||
Effect of changes in foreign currency exchange rates | (38,673 | ) | 17,015 | |||||
Net change in cash | (3,999,977 | ) | (8,888,466 | ) | ||||
Cash at beginning of period | 4,562,589 | 10,592,572 | ||||||
Cash at end of period | $ | 562,612 | $ | 1,704,106 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for interest | $ | 172,964 | $ | - | ||||
Cash paid for income tax | $ | 362 | $ | - | ||||
Noncash investing and financing activities: | ||||||||
Right-of-use of assets and operating lease liabilities recognized | $ | 27,330 | $ | 688,440 |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
FAQ
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