Dive Brief:

• Omnichannel dog brand Bark, known for its BarkBox and Super Chewer pet subscription boxes, reported fourth quarter net losses narrowed to $14.2 million from $36.7 million last year.
• Total revenue for the quarter decreased 2% year over year to $126 million, $5 million ahead of the company’s guidance, according to a company press release. By channel, DTC revenue fell 1.5% from last year to $116 million, while wholesale revenue fell 9.3% to $10 million. The revenue declines came as Bark reported a 15% increase to advertising and marketing expenses, reaching $15.4 million in Q4.
• For the full year, the company saw revenue increase 5.5% year over year to $535.3 million. Net loss for the year narrowed by nearly 10% to reach $61.5 million.

Dive Insight:

Founded by CEO Matt Meeker in 2012, Bark had been in expansion mode since being acquired by Northern Star Acquisition Corp. and going public in 2021. The public listing came as the pet industry exploded during the pandemic as stay-at-home families adopted pets in record numbers, leading to a spike in sales of pet food and related items.

Meeker left his role as CEO in 2020 but returned 16 months later in early 2022 after the company’s bottom line suffered with excess inventory and the pains of expanding too quickly to meet the needs of an industry that had mushroomed during COVID.

“Last year when I returned to running the business, we were facing some notable challenges, the biggest of which was that we were burning cash at a high rate,” Meeker said on the company’s earnings call. “Along with a high burn rate, our cost of goods and fulfillment costs were rising rapidly, our inventory balances growing out of control and the faster we grew, the faster we burned cash.”

Meeker said the company made progress over the last two quarters to bring down costs by reducing inventory and laying off 12% of its workforce. Whereas the company burned $194 million of cash in fiscal 2022, that figure for fiscal 2023 was $17 million, which included a positive cash flow of $17 million for the second half of the year.   

“We expect to be free cash flow positive for the full fiscal year,” Meeker said. “We believe that this profile will give us a healthy foundation for long-term growth.”

Meeker envisions several growth opportunities for Bark. Most notably, he pointed to the brand’s consumables of treats, food, toppers and dental products, as untapped potential for Bark with its major wholesale partners where they currently sell toys only.

“Just imagine how much bigger this can be when we take treats and all of our consumable products to 40,000 retail doors where we sell toys,” Meeker said. Bark has wholesale partnerships with a bevy of national retailers, including Target, REI, Costco, Petco, PetSmart, Amazon, Tractor Supply and Walmart.

Meeker also suggested that the brand has opportunities to grow its DTC e-commerce and subscription business further as it already has an established base of customers “eager to buy our next product.”

Looking ahead, the company expects first quarter revenue to be between $121 million and $123 million, representing a decline of up to 7.8%. For the full year, Bark projects revenue to be flat to down 5%.