BARK, Inc. (NYSE: BARK) (“BARK” or the “Company”), a leading global omnichannel dog brand with a mission to make all dogs happy, today announced its financial results for the fiscal first quarter ended June 30, 2023.
Key Highlights
- Total revenue was $120.6 million, broadly in-line with the Company's guidance range.
- Consolidated gross margin increased 280 basis points to 60.6%, compared to last year.
- Net Loss improved 24.3% to $(11.7) million, year-over-year.
- Adjusted EBITDA was $(7.4) million, approximately $3.1 million ahead of the midpoint of the Company's guidance range, and a 43.0% improvement versus last year.
“The strategic actions we took in fiscal 2023 to improve our unit economics and strengthen the long-term financial health of the business are beginning to bear fruit. These efforts, coupled with our continued expansion into exciting new categories like consumables and the encouraging progress of our unified platform made us a stronger and more dynamic company as we entered fiscal 2024,” said Matt Meeker, Chief Executive Officer of BARK. “I am pleased to report, fiscal 2024 is off to a strong start. Last quarter, we improved our consolidated gross margin by 280 basis points, narrowed our Adjusted EBITDA loss by 43%, and reduced our cash burn by over $8 million, compared to the first quarter of last year. Looking ahead, we anticipate continued improvements in each of these areas as the year unfolds. We also expect our top line to gain momentum, particularly in the second half, as we continue to expand our consumables footprint.”
Key Performance Indicators
Three Months Ended | ||||||||
June 30, | ||||||||
2023 | 2022 | |||||||
Total Orders (in thousands) | 3,560 | 3,867 | ||||||
Average Order Value | $ | 31.43 | $ | 30.61 | ||||
Direct to Consumer Gross Profit (in thousands) | $ | 69,583 | $ | 71,249 | ||||
Direct to Consumer Gross Margin | 62.2 | % | 60.2 | % | ||||
Fiscal First Quarter 2024 Highlights
- Revenue was $120.6 million, broadly in-line with the low-end of the Company's guidance range and an 8% decrease year-over-year.
- Direct to Consumer (“DTC”) revenue was $111.9 million, a 5% decrease year-over-year.
- Commerce revenue was $8.7 million, a 32% decrease year-over-year.
- Gross profit was $73.0 million, $2.8 million lower than the same period last year.
- Gross margin was 60.6%, as compared to 57.8% in the same period last year. The increase was driven by a $0.82 increase in Average Order Value coupled with a reduction in unit cost of goods in the most recent period.
- Advertising and marketing expenses were $17.6 million as compared to $16.4 million in the previous year.
- General and administrative ("G&A") expenses were $69.4 million, as compared to $79.6 million in the prior year.
- Net loss was $(11.7) million, as compared to a net loss of $(15.4) million in the previous year. Prior year included a $6.0 million positive, non-cash impact from the change in fair value of warrants compared to $1.3 million this year.
- Adjusted EBITDA was $(7.4) million, a $5.6 million improvement compared to last year and $3.1 million ahead of the mid-point of the Company's guidance range. The Company did benefit from certain timing related items in the most recent quarter.
- Net Cash Used In Operating Activities was $(10.7) million. free cash flow, defined as net cash used in operating activities less capital expenditures, was $(13.7) million, an improvement of $8.4 million compared to the same period last year.
Balance Sheet Highlights
- The Company’s cash and cash equivalents balance as of June 30, 2023 was $163.9 million.
- The Company's inventory balance as of June 30, 2023 was $112.5 million, a decrease of $11.9 million compared to the prior quarter.
Fiscal Second Quarter and Full Year 2024 Financial Outlook
Based on current market conditions as of August 8, 2023, BARK is providing guidance for revenue and Adjusted EBITDA, which is a Non-GAAP financial measure, as follows.
For the fiscal second quarter 2024, we expect:
- Total revenue of $123 to $127 million.
- Adjusted EBITDA of $(3) million to $(1) million.
For the fiscal full year 2024, we expect:
- Total revenue of flat to (5)% year-over-year, unchanged from the Company's prior guidance.
- Adjusted EBITDA of $(8) million to $2 million, unchanged from the Company's prior guidance.
We do not provide guidance for Net Loss due to the uncertainty and potential variability of certain items, including stock-based compensation expenses and related tax effects, which are the reconciling items between Net Loss and Adjusted EBITDA. Because such items cannot be calculated or predicted without unreasonable efforts, we are unable to provide a reconciliation of Adjusted EBITDA to Net Loss. However, such items could have a significant impact on Net Loss.
The guidance provided above constitutes forward looking statements and actual results may differ materially. Please refer to the “Forward Looking Statements” section below for information on the factors that could cause our actual results to differ materially from these forward looking statements and “Non-GAAP Financial Measures” for additional important information regarding Adjusted EBITDA.
Conference Call Information
A conference call to discuss the Company's fiscal first quarter 2024 results will be held today, August 8, 2023, at 4:30 p.m. ET. During the conference call, the Company may make comments concerning business and financial developments, trends and other business or financial matters. The Company's comments, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed.
The conference call can be accessed by dialing 1-888-330-2120 for U.S. participants and 1-646-960-0290 for international participants. The conference call passcode is 5515653. A live audio webcast of the call will be available at https://investors.bark.co/ and will be archived for 1 year.
About BARK
BARK is the world’s most dog-centric company, devoted to making dogs happy with the best products, services and content. BARK’s dog-obsessed team applies its unique, data-driven understanding of what makes each dog special to design playstyle-specific toys, wildly satisfying treats, great food for your dog’s breed, effective and easy to use dental care, and dog-first experiences that foster the health and happiness of dogs everywhere. Founded in 2011, BARK loyally serves dogs nationwide with themed toys and treats subscriptions, BarkBox and BARK Super Chewer; custom product collections through its retail partner network, including Target and Amazon; its high-quality, nutritious meals made for your breed with BARK Food; and products that meet dogs’ dental needs with BARK Bright®. At BARK, we want to make dogs as happy as they make us because dogs and humans are better together. Sniff around at bark.co for more information.
Forward Looking Statements
This press release contains forward-looking statements relating to, among other things, the future performance of BARK that are based on the Company’s current expectations, forecasts and assumptions and involve risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” "anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology. These statements include, but are not limited to, statements about future operating results, including our strategies, plans, commitments, objectives and goals. Actual results could differ materially from those predicted or implied and reported results should not be considered as an indication of future performance. Other factors that could cause or contribute to such differences include, but are not limited to, risks relating to the uncertainty of the projected financial information with respect to BARK; the risk that spending on pets may not increase at projected rates; that BARK subscriptions may not increase their spending with BARK; BARK’s ability to continue to convert social media followers and contacts into customers; BARK’s ability to successfully expand its product lines and channel distribution; competition; the uncertain effects of the COVID-19 pandemic or other global or macroeconomic events or challenges.
More information about factors that could affect BARK's operating results is included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company's quarterly report on Form 10-Q, copies of which may be obtained by visiting the Company’s Investor Relations website at https://investors.bark.co/ or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to the Company on the date hereof. The Company assumes no obligation to update such statements.
Definitions of Key Performance Indicators
Total Orders
We define Total Orders as the total number of DTC orders shipped in a given period. These include all orders across all of our product categories, regardless of whether they are purchased on a subscription, auto-ship, or one-off basis.
Average Order Value
Average Order Value (“AOV”) is Direct to Consumer revenue for the period divided by Total Orders for the same period. In prior periods, the Company calculated AOV by dividing DTC revenue by total subscription shipments.
BARK, Inc. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands) | ||||||||
Three Months Ended | ||||||||
June 30, | ||||||||
2023 | 2022 | |||||||
REVENUE | $ | 120,591 | $ | 131,150 | ||||
COST OF REVENUE | 47,555 | 55,336 | ||||||
Gross profit | 73,036 | 75,814 | ||||||
OPERATING EXPENSES: | ||||||||
General and administrative(1) | 69,421 | 79,589 | ||||||
Advertising and marketing | 17,619 | 16,363 | ||||||
Total operating expenses | 87,040 | 95,952 | ||||||
LOSS FROM OPERATIONS | (14,004 | ) | (20,138 | ) | ||||
INTEREST INCOME (EXPENSE)—NET | 758 | (1,389 | ) | |||||
OTHER INCOME—NET (2) | 1,583 | 6,119 | ||||||
NET LOSS BEFORE INCOME TAXES | (11,663 | ) | (15,408 | ) | ||||
PROVISION FOR INCOME TAXES | — | — | ||||||
NET LOSS AND COMPREHENSIVE LOSS | $ | (11,663 | ) | $ | (15,408 | ) | ||
(1) | For the three months ended June 30, 2023 and 2022, General and administrative included shipping and fulfillment expense of $36.2 million and $41.1 million, respectively. | |
(2) | For the three months ended June 30, 2023 and 2022, Other Income, Net, is primarily due to income related to the changes in fair value of our warrant liabilities during the period of $1.3 million and $6.0 million, respectively. |
DISAGGREGATED REVENUE (In thousands) | ||||||
Three Months Ended | ||||||
June 30, | ||||||
2023 | 2022 | |||||
Revenue | ||||||
Direct to Consumer: | ||||||
Toys & Accessories (1) | $ | 72,129 | $ | 77,520 | ||
Consumables (1) | 39,758 | 40,877 | ||||
Total Direct to Consumer | $ | 111,887 | $ | 118,397 | ||
Commerce | 8,704 | 12,753 | ||||
Revenue | $ | 120,591 | $ | 131,150 | ||
(1) | The allocation between Toys & Accessories and Consumables includes estimates and was determined utilizing data on stand-alone selling prices that the Company charges for similar offerings, and also reflects historical pricing practices. |
GROSS PROFIT BY SEGMENT (In thousands) | ||||||
Three Months Ended | ||||||
June 30, | ||||||
2023 | 2022 | |||||
Direct to Consumer: | ||||||
Revenue | $ | 111,887 | $ | 118,397 | ||
Costs of revenue | 42,304 | 47,148 | ||||
Gross profit | 69,583 | 71,249 | ||||
Commerce: | ||||||
Revenue | 8,704 | 12,753 | ||||
Costs of revenue | 5,251 | 8,188 | ||||
Gross profit | 3,453 | 4,565 | ||||
Consolidated: | ||||||
Revenue | 120,591 | 131,150 | ||||
Costs of revenue | 47,555 | 55,336 | ||||
Gross profit | $ | 73,036 | $ | 75,814 | ||
BARK, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) | ||||||||
June 30, | March 31, | |||||||
2023 | 2023 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 163,923 | $ | 177,911 | ||||
Accounts receivable—net | 5,128 | 6,554 | ||||||
Prepaid expenses and other current assets | 5,153 | 3,552 | ||||||
Inventory | 112,465 | 124,336 | ||||||
Total current assets | 286,669 | 312,353 | ||||||
PROPERTY AND EQUIPMENT—NET | 38,366 | 39,851 | ||||||
INTANGIBLE ASSETS—NET | 5,582 | 4,090 | ||||||
OPERATING LEASE RIGHT-OF-USE ASSETS | 35,820 | 36,892 | ||||||
OTHER NONCURRENT ASSETS | 7,416 | 7,234 | ||||||
TOTAL ASSETS | $ | 373,853 | $ | 400,420 | ||||
LIABILITIES, AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 19,548 | $ | 34,370 | ||||
Operating lease liabilities, current | 5,136 | 5,484 | ||||||
Accrued and other current liabilities | 29,564 | 31,975 | ||||||
Deferred revenue | 26,345 | 27,772 | ||||||
Total current liabilities | 80,593 | 99,601 | ||||||
LONG-TERM DEBT | 81,406 | 81,221 | ||||||
OPERATING LEASE LIABILITIES | 46,672 | 47,240 | ||||||
OTHER LONG-TERM LIABILITIES | 3,244 | 1,821 | ||||||
Total liabilities | 211,915 | 229,883 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Common stock, par value $0.0001 per share—500,000,000 shares authorized; 178,760,600 shares issued and outstanding as of June 30, 2023 and 500,000,000 shares authorized; 177,647,754 shares issued and outstanding as of March 31, 2023 | 1 | 1 | ||||||
Additional paid-in capital | 483,432 | 480,370 | ||||||
Accumulated deficit | (321,495 | ) | (309,834 | ) | ||||
Total stockholders’ equity | 161,938 | 170,537 | ||||||
TOTAL LIABILITIES, AND STOCKHOLDERS’ EQUITY | $ | 373,853 | $ | 400,420 | ||||
BARK, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | ||||||||
