Purple’s third quarter results reflected ongoing industry challenges, as management pointed to persistent softness in the mattress category and heightened price sensitivity among consumers. CEO Rob DeMartini highlighted that while direct-to-consumer demand improved later in the quarter, wholesale sales remained under pressure, especially with regional and independent partners. He described the period as “mixed,” noting the company’s need to execute better with wholesale partners and refresh its product assortment. DeMartini acknowledged that price increases implemented in June impacted demand more than anticipated, particularly around promotional periods, which weighed on both sales and profitability.
Is now the time to buy PRPL? Find out in our full research report (it’s free for active Edge members).
Purple (PRPL) Q3 2026 highlights:
- Revenue $96.51 million vs S&P analysts’ estimates of $105.7 million (18.7% year-on-year decline, 8.7% miss)
- Adjusted EPS -$2.41 vs S&P analysts’ estimates of -$1.09 (significant miss)
- Adjusted EBITDA -$536,000 vs analyst estimates of $7.50 million (-0.6% margin, significant miss)
- Revenue guidance The company reconfirmed its revenue guidance for the full year of $430 million at the midpoint
- EBITDA guidance $17.5 million at the midpoint for the full year, below analyst estimates of $19.75 million
- Operating margin -10.1%, in line with the same quarter last year
- Market capitalization $11.06 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Purple’s Q3 earnings call
- Brad Thomas (KeyBanc Capital Markets) asked about the extent to which wholesale weakness was industry-driven versus Purple-specific. CEO Rob DeMartini acknowledged both factors, stating, “We own a chunk of it, and we have got to fix it.”
- Brad Thomas (KeyBanc Capital Markets) questioned the margin implications of new product launches and risk of cannibalization. DeMartini responded that new items maintain similar margins, and improved volume should help margins rebound above 45%.
- Brian Nagel (Oppenheimer) inquired whether current wholesale pressures signaled an inflection point or ongoing issues. DeMartini said it was not an inflection point, but emphasized the need to better support regional independents and address past execution gaps.
- Brian Nagel (Oppenheimer) sought clarity on future price increases. CFO Bob Lucian stated, “Right now, we believe we're done,” but noted full price realization will show up in the next quarter.
- Brian Nagel (Oppenheimer) asked about debt refinancing options. DeMartini confirmed that multiple options are being evaluated and expects more clarity by early next year.
Catalysts in upcoming quarters
Moving forward, the StockStory team will be watching (1) the early sales impact and consumer response to the new Essentials and Hybrid mattress collections, (2) signs of stabilization or turnaround in the wholesale channel as new products and expanded sales support are rolled out, and (3) the company’s ability to sustain positive operating cash flow and execute additional cost control measures. The resolution of strategic alternatives and debt refinancing will also be important milestones.
Purple currently trades at $2.55, down from $2.81 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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