KIDPIK Reports First Quarter 2022 Financial Results
Kidpik Corp. (NASDAQ: PIK) reported a first-quarter revenue of $4.3 million, down 18.7% year-over-year. The gross margin contracted slightly to 59.9% from 60.9% in Q1 2021. Shipped items totaled 370,985, a decrease from 543,243 in the same quarter last year. The net loss was $1.8 million or $0.24 per share, with an adjusted EBITDA loss of $1.5 million. Customer acquisition challenges impacted sales, but the keep rate improved to 70.4%. New subscription options could enhance future revenue.
- Keep rate improved to 70.4%, up from 67.7% year-over-year.
- Introduction of new subscription boxes may drive future sales growth.
- Revenue decreased 18.7% compared to Q1 2021.
- Active subscriptions dropped 16% to $3.1 million.
- New subscriptions fell 59.2% to 0.35 million.
- Cash balance reduced from $8.4 million to $5.4 million.
First Quarter Highlights:
-
Revenue, net: was
$4.3 million 18.7% -
Gross margin: was
59.9% , compared with60.9% in the first quarter of 2021 - Shipped items: were 370,985 items, compared to 543,243 shipped items in the first quarter of 2021
-
Average shipment keep rate: increased to
70.4% , compared to67.7% in the first quarter of 2021 -
Net Loss: was
$1.8 million $0.24 -
Adjusted EBITDA: was a loss of
$1.5 million
“Lower customer acquisition rates across the traditional social advertising channels persisted throughout the industry in the first quarter, negatively impacting our net sales and results. This was partially offset by improvement in our
“The online shopping experience our platform provides remains a valued service for families, and we continue to work hard to delight our members. We recently introduced our Summer 2022 subscription box offerings, which now give customers the option to receive a box that contains either 8 or 12 items, as opposed to just 8 items that we’ve traditionally offered. Given we are seeing about half of new subscribers opt for the 12-piece box, this will positively impact our future sales. We continue to pursue additional channels to attract new members, including a third-party software we’ve engaged that will allow us to sell the KIDPIK brand on other top retailer’s e-commerce platforms. We remain dedicated to providing our members with the best possible experience when it comes to outfitting their kids, and to delivering value for our stockholders,” concluded
Revenue by Subscription (For first quarter 2022)
Active Subscriptions (recurring boxes): decreased
New Subscriptions (first boxes): decreased
Total Subscriptions: decreased
Balance Sheet and Cash Flow
-
Cash at the end of the first quarter totaled
$5.4 million $8.4 million 1/01/2022 -
Net cash used in operating activities was
$2.2 million $2.7 million
Earnings Call Information:
Today at
A replay of the conference call will be available approximately two hours after the conclusion of the call on the investor relations section of the
About
Founded in 2016,
Forward-Looking Statements
This press release may contain statements that constitute “forward-looking statements.” The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. 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 “Risk Factors” section of the Company's Quarterly Report on Form 10-Q, as well as its Registration Statement and prospectus filed with the
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Condensed Interim Statements of Operations |
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(Unaudited) |
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13 Weeks Ended |
|
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|
|
|
|
|
|
|
||
Revenue, net |
|
$ |
4,325,997 |
|
|
$ |
5,320,533 |
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
1,733,914 |
|
|
|
2,082,202 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
2,592,083 |
|
|
|
3,238,331 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Shipping and handling |
|
|
1,132,084 |
|
|
|
1,534,454 |
|
Payroll, related costs and equity-based compensation |
|
|
1,599,236 |
|
|
|
958,639 |
|
General and administrative |
|
|
1,930,893 |
|
|
|
2,072,053 |
|
Depreciation and amortization |
|
|
5,665 |
|
|
|
9,721 |
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
4,667,878 |
|
|
|
4,574,867 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(2,075,795 |
) |
|
|
(1,336,536 |
) |
|
|
|
|
|
|
|
|
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Other expenses |
|
|
|
|
|
|
|
|
Interest expense |
|
|
21,674 |
|
|
|
160,627 |
|
Other (income) expense |
|
|
(286,794 |
) |
|
|
316 |
|
|
|
|
|
|
|
|
|
|
Total other (income) expenses |
|
|
(265,120 |
) |
|
|
160,943 |
|
|
|
|
|
|
|
|
|
|
Loss before provision for income taxes |
|
|
(1,810,675 |
) |
|
|
(1,497,479 |
) |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
- |
|
|
|
507 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,810,675 |
) |
|
$ |
(1,497,986 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.24 |
) |
|
$ |
(0.30 |
) |
Diluted |
|
$ |
(0.24 |
) |
|
$ |
(0.30 |
) |
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
7,617,834 |
|
|
|
5,075,444 |
|
Diluted |
|
|
7,617,834 |
|
|
|
5,075,444 |
|
|
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Condensed Interim Statements of Cash Flows |
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(Unaudited) |
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|
|
13 Weeks Ended |
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|
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Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,810,675 |
) |
|
$ |
(1,497,986 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
5,665 |
|
|
|
9,721 |
|
Amortization of debt issuance costs |
|
|
- |
|
|
|
44,086 |
|
Equity-based compensation |
|
|
617,164 |
|
|
|
- |
|
Bad debt expense |
|
|
93,142 |
|
|
|
131,788 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
66,171 |
|
|
|
(39,624 |
) |
Inventory |
|
|
(650,649 |
) |
|
|
(1,718,654 |
) |
Prepaid expenses and other current assets |
|
|
81,608 |
|
|
|
(7,746 |
) |
Operating lease right-of-use assets and liabilities |
|
|
1,896 |
|
|
- |
|
|
Accounts payable |
|
|
28,282 |
|
|
|
297,772 |
|
Accounts payable, related parties |
|
|
(194,142 |
) |
|
|
134,649 |
|
Accrued expenses and other current liabilities |
|
|
(472,125 |
) |
|
|
(41,150 |
) |
|
|
|
|
|
|
|
|
|
Net cash flows used in operating activities |
|
|
(2,233,663 |
) |
|
|
(2,687,144 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchases of leasehold improvements and equipment |
|
|
(17,018 |
) |
|
|
- |
|
Net cash used in investing activities |
|
|
(17,018 |
) |
|
|
- |
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Net proceeds from line of credit |
|
|
- |
|
|
|
99,128 |
|
Net proceeds (repayments) from advance payable |
|
|
(735,126 |
) |
|
|
415,233 |
|
Proceeds from loan payable |
|
|
- |
|
|
|
2,100,000 |
|
Net cash provided by (used in) financing activities |
|
|
(735,126 |
) |
|
|
2,614,361 |
|
Net decrease in cash and restricted cash |
|
|
(2,985,807 |
) |
|
|
(72,783 |
) |
|
|
|
|
|
|
|
|
|
Cash and restricted cash, beginning of period |
|
|
8,420,500 |
|
|
|
685,297 |
|
Cash and restricted cash, end of period |
|
$ |
5,434,693 |
|
|
$ |
612,514 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash and restricted cash: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
5,430,075 |
|
|
$ |
132,079 |
|
Restricted cash |
|
|
4,618 |
|
|
|
480,435 |
|
| $ | 5,434,693 |
$ | 612,514 |
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Supplemental disclosure of cash flow data: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
3,890 |
|
|
$ |
133,141 |
|
Taxes paid |
|
$ |
- |
|
|
$ |
507 |
|
Supplemental disclosure of non-cash flow data: |
|
|
|
|
|
|
|
|
Record right-of-use asset and operating lease liabilities |
|
$ |
418,951 |
|
|
$ |
- |
|
SUPPLEMENTAL INFORMATION- RESULTS OF OPERATIONS
The Company’s revenue, net is disaggregated based on the following categories:
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Revenue by channel |
|
|
|
|
|
|
|
|
Subscription boxes |
|
$ |
3,483,851 |
|
|
$ |
4,584,612 |
|
Amazon sales |
|
|
549,500 |
|
|
|
608,250 |
|
Online website sales |
|
|
292,646 |
|
|
|
127,671 |
|
Total revenue |
|
$ |
4,325,997 |
|
|
$ |
5,320,533 |
|
Gross Margin
Gross profit is equal to our net sales less cost of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin. Cost of sales consists of the purchase price of merchandise sold to customers and includes import duties and other taxes, freight in, returned from customers, inventory write-offs, and other miscellaneous shrinkage.
|
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For the 13 weeks ended |
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Gross margin |
|
|
59.9 |
% |
|
|
60.9 |
% |
Shipped Items
We define shipped items as the total number of items shipped in a given period to our customers through our active subscription, Amazon and online website sales.
|
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For the 13 weeks ended |
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(In thousands) |
|
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||
|
|
|
|
|
|
|
|
|
Shipped Items |
|
|
371 |
|
|
|
543 |
|
Average Shipment Keep Rate
Average shipment keep rate is calculated as the total number of items kept by our customers divided by total number of shipped items in a given period.
|
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For the 13 weeks ended |
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|
Average Shipment Keep Rate |
|
|
70.4 |
% |
|
|
67.7 |
% |
Revenue by Channel
|
|
13 weeks ended
|
|
|
13 weeks ended
|
|
|
Change
|
|
|
Change
|
|
||||
Revenue by channel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription boxes |
|
$ |
3,483,851 |
|
|
$ |
4,584,612 |
|
|
$ |
(1,100,761 |
) |
|
|
(24.0 |
)% |
Amazon sales |
|
|
549,500 |
|
|
|
608,250 |
|
|
|
(58,750 |
) |
|
|
(9.7 |
)% |
Online website sales |
|
|
292,646 |
|
|
|
127,671 |
|
|
|
164,975 |
|
|
|
129.2 |
% |
Total revenue |
|
$ |
4,325,997 |
|
|
$ |
5,320,533 |
|
|
$ |
(994,536 |
) |
|
|
(18.7 |
)% |
Subscription Boxes Revenue
|
|
13 weeks ended
|
|
|
13 weeks ended
|
|
|
Change
|
|
|
Change
|
|
||||
Subscription boxes revenue from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subscriptions – recurring boxes |
|
$ |
3,136,569 |
|
|
$ | 3,733,722 |
|
|
$ | (597,153 |
) |
|
|
(16.0 |
)% |
New subscriptions - first box |
|
|
347,282 |
|
|
850,890 |
|
|
(503,608 |
) |
|
|
(59.2 |
)% |
||
Total subscription boxes revenue |
|
$ |
3,483,851 |
|
|
$ |
4,584,612 |
|
|
$ |
(1,100,761 |
) |
|
|
(24.0 |
)% |
Revenue by Product Line
|
|
13 weeks ended
|
|
|
13 weeks ended
|
|
|
Change
|
|
|
Change
|
|
||||
Revenue by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Girls’ apparel |
|
$ |
3,256,893 |
|
|
$ |
4,182,652 |
|
|
$ |
(925,761 |
) |
|
|
(22.1 |
)% |
Boys’ apparel |
|
|
867,794 |
|
|
|
1,130,474 |
|
|
|
(262,680 |
) |
|
|
(23.2 |
)% |
Toddlers’ apparel |
|
|
201,310 |
|
|
|
7,407 |
|
|
|
193,903 |
|
|
|
2,618 |
% |
Total revenue |
|
$ |
4,325,997 |
|
|
$ |
5,320,533 |
|
|
$ |
(994,536 |
) |
|
|
(18.7 |
)% |
Non-GAAP Financial Measures
We report our financial results in accordance with generally accepted accounting principles in
Our non-GAAP financial measure should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
- Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
- Adjusted EBITDA does not reflect certain non-routine items that may represent a reduction in cash available to us; and
- Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Adjusted EBITDA
We define adjusted EBITDA as net loss excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, and equity-based compensation expense. The following table presents a reconciliation of net loss, the most comparable GAAP financial measure, to adjusted EBITDA for each of the periods presented:
|
|
For the 13 weeks Ended |
|
|||||
|
|
|
|
|
|
|
||
Net loss |
|
$ |
(1,810,675 |
) |
|
$ |
(1,497,986 |
) |
Add (deduct): |
|
|
|
|
|
|
|
|
Interest expense |
|
|
21,674 |
|
|
|
160,627 |
|
Other (income) expense, net |
|
|
(286,794 |
) |
|
|
316 |
|
Provision for income taxes |
|
|
- |
|
|
|
507 |
|
Depreciation and amortization |
|
|
5,665 |
|
|
|
9,721 |
|
Equity-based compensation |
|
|
617,164 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
(1,452,966 |
) |
|
$ |
(1,326,815 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220516005876/en/
Investor Relations:
ir@kidpik.com
Media:
press@kidpik.com
(212) 399-2784
Source:
FAQ
What were Kidpik's revenue results for the first quarter of 2022?
What was Kidpik's net loss in the first quarter of 2022?
How did Kidpik's gross margin change in the first quarter of 2022?
What is the future outlook for Kidpik's subscription services?
