August has already brought a lot of change to the industry.
Some companies have switched up their leadership in an effort to focus on growth, with Grove Collaborative’s co-founder Stuart Landesberg stepping down from the CEO position and Wolverine Worldwide terminating CEO Brendan Hoffmann.
Meanwhile, many brands have also focused on expansion, whether through wholesale or direct-to-consumer channels. DTC jewelry brand Aurate debuted its first-ever wholesale partnerships with Macy’s and Helzberg Diamonds while Warby Parker re-emphasized its love for brick and mortar by opening 13 new stores during its second quarter.
Such moves come amid a tough macroeconomic environment, leaving some brands to struggle while others flourish. With the year more than halfway over, the holiday season is quickly approaching – with millions of consumers expected to have less money to spend – while profitability becomes an increasingly important goal.
So how are brands performing with the industry’s most important time of year around the corner? Here’s a roundup of DTC earnings from the past few weeks.
Allbirds
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $70.5 million | -9.8% |
| Operating loss | $29.6 million | +1% |
| Net loss | $28.9 million | -1.5% |
Allbirds is executing on a transformation plan announced in the spring, which is intended to help the brand reach profitability and includes four main pillars — reigniting its product and brand; optimizing its U.S. stores and slowing the pace of openings; transitioning its international go-to-market strategy; and improving cost savings and operational efficiency.
As part of the plan, the footwear retailer announced steps to transition its international model by entering into agreements to shift operations in Canada and South Korea from a direct go-to-market model to a third-party distributor model.
“We are spending every waking moment focused on driving sustained and durable profit for the future chapter of Allbirds,” co-founder and CEO Joey Zwillinger said on a call with analysts.. “It is not going to happen overnight.”
Warby Parker
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $166.1 million | +11% |
| Operating loss | $18.2 million | -43.2% |
| Net loss | $15.9 million | -50.5% |
Warby Parker saw revenue increase and losses narrow in the second quarter. The eyewear brand’s active customers grew 1.2% to about 2.3 million.
The modest customer growth in the period comes as the brand pushes further into physical retail. During Q2, Warby Parker opened 13 new stores, ending the period with 217 locations, and executives said it’s on track to open 40 by the end of the year.
Purple
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $120.9 million | -16.1% |
| Operating loss | $37.3 million | +208% |
| Net loss | $37.7 million | +348% |
Purple missed analysts estimates for revenue and EBITDA during Q2 as the mattress retailer’s revenue shrunk and its losses widened from the year-ago period.
The company has a more cautious view of industry demand for the remainder of the year and as a result lowered its full-year outlook. Purple now expects net revenue to be between $560 million and $590 million, down from a previously projected $590 million to $615 million, while adjusted EBITDA is expected to range from breaking even to negative $10 million, down from previous EBITDA estimates of positive $13 million to $17 million.
Wayfair
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $3.2 billion | -3.4% |
| Operating loss | $142 million | -61.8% |
| Net loss | $46 million | -87.8% |
While Wayfair’s revenue fell during Q2, it was able to narrow its losses during the period. Executives credited the improvement in profitability to a plan the company initiated last year.
“Last year, we laid out a plan to strengthen our business that included a path to sustainable and growing profitability with several key milestones,” Wayfair co-founder, co-chairman and CEO Niraj Shah said in a statement. “For the past few quarters, you’ve seen us execute against that plan — to lower our costs, focus on the basics and earn more customer and supplier loyalty. And you’ve seen the tangible impact of this plan as our performance has continued to improve.”
However, Wayfair saw its active customer base shrink during the period, declining 7.6% year over year to 21.8 million.
Oddity
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $151.3 million | +55% |
| Operating income | $36.8 million | +80.1% |
| Net income | $30 million | +80.4% |
Less than a month after making its public market debut, Oddity reported strong earnings for the second quarter.
“We delivered our strongest second quarter and year-to-date financial results ever, beating our plan on revenue and all key profit metrics, and allowing us to raise our full-year outlook,” Oran Holtzman, Oddity co-founder and CEO, said in a statement.
The Il Makiage and SpoiledChild parent company projects full-year net revenue to be in the $475 million to $480 million range, compared to previous estimates of $453 million. Oddity also expects adjusted EBITDA to be between $96 million and $101 million, up from previous projections of $91 million.
Hims & Hers
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $207.9 million | +83% |
| Operating loss | $9.2 million | -54.3% |
| Net loss | $7.2 million | -63.6% |
The quarter “marks a significant turning point for Hims & Hers,” according to Andrew Dudum, co-founder and CEO. The healthcare company was able to grow its revenue while also narrowing its losses.
“We are excited by the progress made this quarter, which we believe sets that foundation for long-term growth at an attractive margin profile through distinct competitive advantages,” CFO Yemi Okupe said in a statement. “Our economic flywheel is clearly working. It has enabled us to strategically bring highly sought after personalized products to very attractive price points, and simultaneously expand margins. We believe this uniquely positions us for significant market share gains.”
Olaplex
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $109.2 million | -48.2% |
| Operating income | $18.8 million | -84.4% |
| Net income | $6.2 million | -93% |
Olaplex faced declining sales and profits in the second quarter and missed the company’s own expectations as its “Professional and Specialty Retail channels experienced slower demand and some customers right sized their inventory positions in response to current trends,” JuE Wong, Olaplex CEO and president, said in a statement.
By channel, professional net sales declined 61.2% year over year to $40.9 million, DTC was down 6.4% to $38.5 million and specialty retail was down 53.7% to $29.8 million.
As a result of slower demand, the hair care company lowered its full-year guidance, now expecting net sales between $445 million and $465 million, down from previous guidance of $563 million to $634 million. Olaplex also expects adjusted net income between $96 million and $108 million and adjusted EBITDA between $161 million and $176 million.
A.k.a. Brands
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $136 million | -14.2% |
| Operating loss | $1.1 million | -56% |
| Net loss | $5 million | +19.7% |
Despite a drop in sales during the quarter, A.k.a. Brands saw progress with operational issues during the timeframe.
“We continue to execute against our strategic initiatives and have made significant improvements in our operating efficiencies, which enabled us to deliver on our adjusted EBITDA and cash flow expectations for the second quarter,” Ciaran Long, interim CEO and CFO, said in a statement. “I’m also pleased that we continued to strengthen our balance sheet by way of strategically reducing inventories, which were down 16% since the end of fiscal 2022, and we paid down $12.5 million of debt in the quarter.”
The company reported that its Princess Polly brand expanded wholesale relationships with Pacsun, with plans to open its own brick-and-mortar location in Los Angeles in September. A.k.a. Brands also noted that Culture Kings’ flagship store in Las Vegas exceeded expectations.
Grove Collaborative
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $66.1 million | -16.6% |
| Operating loss | $9.6 million | -77.6% |
| Net loss | $10.9 million | -69% |
The sustainability-focused company announced major leadership changes as part of its second-quarter earnings report.
Co-founder Stuart Landesberg stepped down from the CEO position and transitioned to the executive chairman role on the company’s board. Jeff Yurcisin – former Shopbop and Zulily CEO – succeeds Landesberg and joined Grove’s board of directors.
“I could not be more excited to welcome Jeff, an experienced, brilliant and customer-centric leader to Grove and as Grove’s next CEO,” Landesberg said in a statement. “He will be terrific at the helm, as Grove continues to push towards greater sustainable growth and impact.”
Grove also announced a $10 million investment from growth equity firm Volition Capital with Managing Partner and co-founder Larry Cheng joining Grove’s board. The capital will be used for growth opportunities, general corporate expenses and potential stock buybacks.
On
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | 444.3 million Swiss francs | +52.3% |
| Operating income | 39.4 million Swiss francs | +50% |
| Net income | 3.3 million Swiss francs | -93.3% |
On’s second quarter brought in record numbers – again – and demonstrated the brand’s commitment to growing its direct-to-consumer channel.
The athletics brand reported DTC net sales grew more than wholesale, increasing 54.7% to 163.5 million Swiss francs ($185.5 million at current rates) during the quarter while wholesale jumped 51% to 280.8 million Swiss francs. On also raised its net sales outlook for the year from the previously projected 1.74 billion Swiss francs to 1.76 billion Swiss francs.
“We continue to see a small, but increasing contribution from our owned retail store business,” co-CEO and CFO Martin Hoffmann said on a call with analysts. “This does not yet include the material contribution from our new Williamsburg store given the late June launch ... The store serves as another prime example of how retail is able to showcase On as a full head-to-toe brand.”
The Honest Company
| Metric | Amount | Year over year |
|---|---|---|
| Revenue | $85 million | +8% |
| Operating loss | $13.4 million | +25% |
| Net loss | $13.4 million | +34% |
The Honest Company’s increased sales during the quarter came after the brand announced in March that it would raise prices in the mid- to high-single digits.
During Q2, the brand saw diapers and wipes revenue increase 6% year over year while its skin and personal care business saw a decline of 2%. Digital revenue jumped 10% and retail increased 5%, with strong consumption at key retailers and new distribution.
“Underpinning our second quarter performance was our Transformation Initiative, which drove positive operating cash flow in the quarter as a result of disciplined inventory management, marketing efficiencies and a tight focus on our cost structure,” Chief Executive Officer Carla Vernón said in a statement. “We remain committed to expanding margins and driving shareholder value as we continue to realize additional benefits from our Transformation Initiative in the back half of the year.”
Correction: This story has been updated to show that Olaplex had an operating income in the second quarter.
