Bedding and comfort retailer Purple (NASDAQ: PRPL) fell short of the market’s revenue expectations in Q1 CY2026, with sales falling 8.1% year on year to $95.73 million. The company’s full-year revenue guidance of $475 million at the midpoint came in 4.8% below analysts’ estimates. Its non-GAAP loss of $0.13 per share was in line with analysts’ consensus estimates.
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Purple (PRPL) Q1 CY2026 Highlights:
- Revenue: $95.73 million vs analyst estimates of $101.7 million (8.1% year-on-year decline, 5.9% miss)
- Adjusted EPS: -$0.13 vs analyst estimates of -$0.13 (in line)
- Adjusted EBITDA: -$4.78 million (-5% margin, 1.2% year-on-year decline)
- The company dropped its revenue guidance for the full year to $475 million at the midpoint from $510 million, a 6.9% decrease
- EBITDA guidance for the full year is $25 million at the midpoint, above analyst estimates of $16.33 million
- Operating Margin: -17.6%, down from -13.9% in the same quarter last year
- Free Cash Flow was $1.38 million, up from -$25.31 million in the same quarter last year
- Market Capitalization: $70.13 million
"During the first quarter, we continued to build on the progress we made at the end of last year, with improving consistency across our business and solid performance in our showroom and wholesale channels," said Rob DeMartini, CEO of Purple Innovation.
Company Overview
Founded by two brothers, Purple (NASDAQ: PRPL) creates sleep and home comfort products such as mattresses, pillows, and bedding accessories.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Purple struggled to consistently generate demand over the last five years as its sales dropped at a 8.4% annual rate. This wasn’t a great result and is a sign of poor business quality.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Purple’s annualized revenue declines of 6.3% over the last two years suggest its demand continued shrinking. 
This quarter, Purple missed Wall Street’s estimates and reported a rather uninspiring 8.1% year-on-year revenue decline, generating $95.73 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 12.2% over the next 12 months. Although this projection implies its newer products and services will spur better top-line performance, it is still below average for the sector.
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Operating Margin
Purple’s operating margin has risen over the last 12 months, but it still averaged negative 13.8% over the last two years. This is due to its large expense base and inefficient cost structure.
This quarter, Purple generated a negative 17.6% operating margin. The company's consistent lack of profits raise a flag.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Sadly for Purple, its EPS declined by 20.2% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.
In Q1, Purple reported adjusted EPS of negative $0.13, down from negative $0.11 in the same quarter last year. This print missed analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.
Key Takeaways from Purple’s Q1 Results
We were impressed by Purple’s optimistic full-year EBITDA guidance, which blew past analysts’ expectations. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance missed and its revenue fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 9.5% to $0.59 immediately following the results.
Purple underperformed this quarter, but does that create an opportunity to invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
