What Happened?
Shares of bedding and comfort retailer Purple (NASDAQ: PRPL)
fell 24.6% in the afternoon session after the company reported second-quarter revenue that missed Wall Street's expectations, even as it provided a stable sales forecast for the full year. The bedding company's revenue for the quarter declined 6.5% year-over-year to $98.27 million, falling short of analysts' projections.
While this top-line weakness seemed to disappoint investors, the company's results included some bright spots. Adjusted earnings per share of negative $1.52 was significantly better than anticipated. Furthermore, Purple guided for full-year revenue of approximately $430 million, which aligned with broader estimates. Despite the reassurance for the full year, the market focused on the current quarter's sales shortfall, sending the shares lower.
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What Is The Market Telling Us
Purple’s shares are extremely volatile and have had 52 moves greater than 5% over the last year. But moves this big are rare even for Purple and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 20.9% on the news that it reported disappointing first-quarter 2026 results and lowered its full-year revenue outlook. The company's revenue for the quarter came in at $95.73 million, a decline of 8.1% year on year, falling short of Wall Street's expectation of $101.7 million.
While Purple's adjusted loss of $0.13 per share met analysts' estimates, the outlook for sales weakened significantly. Management cut the full-year revenue guidance to a midpoint of $475 million, down from a previous forecast of $510 million and 4.8% below what analysts were expecting. Although the company guided for full-year adjusted EBITDA above consensus, this positive note was overshadowed by the weaker sales performance and forecast, sending shares down sharply.
Purple is down 61.6% since the beginning of the year, and at $6.92 per share, it is trading 77.9% below its 52-week high of $31.25 from August 2025. Investors who bought $1,000 worth of Purple’s shares 5 years ago would now be looking at only $10.03.
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