© Reuters.
BARK Inc (NYSE:BARK) reported its second-quarter results for the fiscal year ending September 30, 2023, Wednesday. Despite facing a tough economic environment, the company saw a decrease in total revenue by 14.4% to $123 million, attributing this drop to macroeconomic challenges. However, it also demonstrated an increase in gross margin by 560 basis points to 61.5%.
The company’s direct-to-consumer (DTC) revenue decreased by 11.3% year-over-year due to macroeconomic headwinds affecting discretionary toy products, a key product line, while commerce revenue fell by 28.7%. Despite these declines, BARK Inc managed to improve its net loss by 2.8% to $(10.3) million year-over-year. This marks the first time the company has posted positive Adjusted EBITDA since it went public.
Gross profit stood at $75.6 million, largely due to new contract pricing that reduced the unit costs of goods. In a move demonstrating resilience amid economic pressures, CEO Matt Meeker announced the strategic repurchase of $45.0 million of its 2025 Convertible Notes at a 6% discount. This is expected to reduce future interest expenses by an estimated $5.5 million as part of its focus on profitability improvements.
On the expenditure side, advertising and marketing expenses increased to $17.8 million, while general and administrative (G&A) expenses, including non-recurring charges, decreased to $68.9 million.
The company concluded the quarter with $160.5 million in cash and cash equivalents. Inventory levels reflected a decrease amounting to a $51.2 million reduction. Net cash provided by operating activities was reported at $2.8 million and free cash flow at $0.9 million, marking an improvement of $12.4 million compared to the same period last year.
Looking ahead, BARK Inc updated its fiscal 2024 guidance, projecting total revenue growth of (8)% to (11)% year-over-year and Adjusted EBITDA of $(6) million to $(12) million. This update marks the company’s first positive Adjusted EBITDA quarter as a public company, potentially attracting value investors.
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