Kidpik Q2 2023 Earnings Report

Kidpik EPS Results

• Actual EPS: -$1.30
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Kidpik Revenue Results

• Actual Revenue: $3.45 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Kidpik Announcement Details

• Quarter: Q2 2023
• Date: 8/15/2023
• Time: N/A
• Conference Call Date: Tuesday, August 15, 2023
• Conference Call Time: 4:30PM ET

Kidpik (NASDAQ:PIK) operates as a subscription-based e-commerce company that sells kids apparel, footwear, and accessories. It offers apparel, including tops, bottoms, cardigans, jackets, dresses, and swimwear in knit and woven fabrications; shoes, such as sneakers, boots, sandals, and dress shoes; and accessories comprising sunglasses, jewelry, bags, socks, hats, hair goods, and other items. The company serves its customers through its retail websites, kidpik.com and shop.kidpik.com; third- party websites; and clothing subscription boxes, which provide mix-&-match coordinated outfits that are personalized based on each member's preferences. The company was incorporated in 2015 and is based in New York, New York.

Kidpik Q2 2023 Earnings Call Transcript

[Operator]

Greetings, and welcome to the KidPick Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ezra Daba.

[Operator]

Thank you, Ezra. You may begin.

[Speaker 1]

Thank you, operator, and thank you, everyone, for joining us today. We are pleased to welcome everyone to today's call, where we will review Q2 2023 and provide an update on Kitschpic's business. We will begin with a review of our financial business highlights, followed by a financial review, which Jill, our Chief Accounting Officer, will take us Drew, I'd like to start by sharing that our 2nd quarter earnings were For the most part, consistent was our Q1. During the Q2, we continued to take action to execute our plan We are focused on increasing sales from our current inventory level, which we believe will support our cash flow needs in the short term. In preparing for the back to school season, we have taken the opportunity to elevate the look and feel of our brand And the experience of our subscription service and to further enhance shopping options.

[Speaker 1]

We believe that the combination of our marketing team's Efforts to vividly showcase our unique outfits and the confidence children feel while wearing Kippik Against the backdrop of Central Park, with the tech advancements made by our technology team, we have enriched Our brand and website user experience. In our continued commitment to value addition, We recently launched exclusive member benefits, including a 10% discount at our Kitpik shop for active members. Our active subscriber base has been stable over the Q2 year to date. We believe we hold a competitive advantage within the kids clothing subscription marketplace by our ability to personalize and deliver Head to toe, stylized outfits at a great value. We continue to explore other paid and unpaid channels Stand behind our subscription boxes.

[Speaker 1]

In the Q2, we have grown our e commerce shop sales by 72% over the same period last year. We also experienced sales increases and demand for our products on the Walmart e Commerce platform. We invite you to visit kitpick.comandshop. Kitpick.com to view our back to school collection and experience the technology that drives it. With that, I will turn the call over to Jill to detail the financial highlights for the quarter.

[Speaker 1]

Jill?

[Speaker 2]

Thank you, Ezra. Q2 revenue was $3,400,000 a decrease of 7.7% year over year and a decrease of 8.6% quarter over quarter. The decrease in revenue was primarily driven by a decrease in subscription box sales. Looking at Q2 revenue by channel, subscription sales were approximately $2,600,000 A decrease of 12.3 percent quarter over quarter. 3rd party website sales were lower at $427,000 a decrease of 23.6 percent quarter over quarter.

[Speaker 2]

Online website sales increased by 71.9 percent to 414,000 for the quarter. Moving to revenue by subscription for the quarter. Active subscriptions or recurring boxes decreased by 17.8% to 2,200,000 year over year. New subscriptions of First Box increased by 32.7 2,400,000. Total subscriptions decreased by 12.3% to $2,600,000 which represents 76% of total revenue.

[Speaker 2]

Turning to gross margin. Gross margin for the quarter was 60.2%, a year over year decrease of 80 basis points. Shipped items for the 2nd quarter decreased by 18% to 290,000. Keep rate for the 2nd quarter was 75.1% versus 69.2% for the 2nd quarter last year. On the bottom line, net loss for the quarter was approximately $2,000,000 or a loss of $0.26 per share compared to a net loss of 1,600,000 or a loss of $0.21 per share for the Q2 last year.

[Speaker 2]

Speaking to non GAAP, Adjusted EBITDA for the quarter was negative $1,700,000 compared to negative $1,100,000 for the Q2 last year. Now to the balance sheet and cash flow. Cash at the end The quarter was approximately $163,000 compared to $2,500,000 at the end of 2022. We used $400,000 in operating cash flow for the 26 week period compared to $4,000,000 last year. In order to improve our cash position, we have significantly reduced purchases of new inventory and may enter Into a cash advance or other financing arrangements.

[Speaker 2]

As of July 1, 2023, We had $11,000,000 in total current assets, dollars 6,000,000 in total current liabilities and working capital of $4,900,000 With that, I will turn the call back to the operator for Q and A. Operator?

[Operator]

Thank you. We will now be conducting a question and answer Thank you. There are no questions at this time. I would like to hand the floor back over to management for any closing comments.

[Speaker 1]

Thank you, operator. Thank you all for joining us today. Thank you for your continued support and interest in Kitbik. If you have any additional question or any questions at all, please contact us at irkitbig.com. Wishing everybody a great day, health and happiness always.

[Speaker 1]

Thank you.

[Operator]

This concludes today's conference.