Dive Brief:
- A drop off in both DTC and wholesale revenue contributed to a negative first-quarter earnings report for pet brand Bark.
- Wholesale revenue (which the company refers to as “commerce” revenue) in Q1 declined 32% year over year to $8.7 million, while direct-to-consumer revenue fell 5% to $111.9 million, according to a company press release.
- Total company revenue was $120.6 million, down 8% compared to last year, primarily driven by an 8% decline in total orders, which fell to 3.6 million from 3.9 million a year ago. The company projects revenue in Q2 to be between $123 million to $127 million.
Dive Insight:
Bark CEO and co-founder Matt Meeker, who left the position in 2020 and returned to it in 2022, spoke about the company’s financial “headwinds” over the past 18 months.
“Looking back, when I returned to the CEO role 18 months ago, we faced a number of challenges,” Meeker said on a call with analysts discussing Q1 results. “In our pursuit of growth, we lost sight of our core vision and lacked the capital discipline that had been ingrained in the organization during my first 10 years running the company. In light of this, it was paramount that we prioritized returning to a simpler or nimble organization and stabilize our cash burn.”
Bark, which is known for its BarkBox and Super Chewer subscription boxes, narrowed its net loss in the first quarter to $11.7 million, while operating loss was $14 million. The company announced last month that it had laid off 66 employees, or about 8% of its workforce, as a way to reduce costs.
Wholesale revenue declined even as Bark expanded its roster of retail partners in recent years, including with Walmart and Tractor Supply in 2022. Despite the revenue decline, the company says it continues on a strategy to increase its wholesale business, which currently represents about 12% of total revenue. Bark sells product in over 40,000 retail doors across the country, including REI, Target, Costco, Petco, PetSmart, Amazon and others.
While the brand’s consumable products currently account for about one-third of total revenue, the company has plans to substantially grow that business. “In the spring of 2024, we intend to pitch our retail partners on our full consumables product line, including dental, toppers and food,” Meeker said. “In light of these opportunities, we expect our commerce segment to grow considerably over the next three to five years.”
During the call Meeker announced the brand had expanded its DTC channel within a unified channel at shop.bark.co, which now features all of the company’s consumables products alongside its toy subscription box products.
Correction: The headline on this story has been updated to reflect the brand's current reporting period.
