KIDPIK CORP. Reports Q2 2024 Financial Results

KIDPIK CORP., a leading subscription-based fashion service for kids, has released its Form 10-Q report for the second quarter of 2024. The report highlights significant financial and operational challenges faced by the company, including a notable decline in revenue and operational disruptions due to a warehouse relocation. Despite these challenges, the company has made strides in cost management and is optimistic about future growth prospects.

Financial Highlights

• Revenues, net: $1.13 million for the 13 weeks ended June 29, 2024, a decrease of 67.3% compared to $3.45 million for the 13 weeks ended July 1, 2023. This decline was primarily due to a reduction in new subscribers and the decision to move the warehouse from California to Texas, which disrupted operations.
• Gross Profit: $0.75 million for the 13 weeks ended June 29, 2024, compared to $2.08 million for the same period in 2023. The gross margin improved to 66.2% from 60.2% due to an inventory write-down in the fourth quarter of 2023.
• Operating Loss: $(1.29) million for the 13 weeks ended June 29, 2024, compared to $(2.00) million for the same period in 2023, reflecting cost management efforts despite lower revenues.
• Net Loss: $(1.30) million for the 13 weeks ended June 29, 2024, compared to $(2.03) million for the same period in 2023. The improvement was driven by cost reductions and efficiency improvements.
• Net Loss Per Share - Basic and Diluted: $(0.67) for the 13 weeks ended June 29, 2024, compared to $(1.31) for the same period in 2023, reflecting a decrease in net loss and a stable share count.

Business Highlights

• Revenue Segments: The company reported a significant decrease in revenue across all product lines for the 13 and 26 weeks ended June 29, 2024. Girls' apparel revenue decreased by 67.6% and 55.5% for the 13 and 26 weeks, respectively. Boys' apparel saw a decline of 63.5% and 49.5%, while toddlers' apparel dropped by 77.0% and 68.1%. This decline was attributed to reduced marketing expenditures and a focus on selling existing inventory.
• Sales Units: The number of items shipped decreased significantly, with a 53.4% drop for the 13 weeks and a 47.6% drop for the 26 weeks ended June 29, 2024, compared to the same periods in the previous year. This was due to the elimination of marketing expenditures and the temporary closure of the warehouse during its relocation from California to Texas.
• Warehouse Relocation: In March 2024, the company moved its warehouse from California to Texas, which resulted in business disruption during March and April. This move led to a temporary halt in shipping and processing returns, affecting sales and operational efficiency.
• Future Outlook: The company anticipates that the merger with Nina Footwear, expected to close in the fourth quarter of 2024, will strengthen its balance sheet and provide additional cash flow to support operations. The company is also focused on improving customer experience and selling existing inventory amidst macroeconomic challenges.

SEC Filing: KIDPIK CORP. Reports Q2 2024 Financial Results [ OTC:PIKM ] - 10-Q - Aug. 19, 2024