Growth in wholesale helps push Casper's revenue up 13% in Q1

Dive Brief:

Benefiting from the home sector's rise, Casper on Thursday reported first quarter net revenue grew 13% year over year to $127.7 million. Excluding its European operations, which it recently exited, net revenue in North America increased 20%.
The revenue growth was driven by an 11.1% increase in its DTC channels to $93.2 million and a 53.7% rise in its retail partnership channels to $34.4 million, according to a company press release.
The direct-to-consumer mattress brand's net loss in the quarter improved 38.5% to $21.2 million from $34.5 million a year ago.

Dive Insight:

The mattress industry, much like the rest of the broader home sector of retail, has experienced a boost in sales over the past year.

As the pandemic forced many consumers to spend more time inside, they began to invest more into their homes. Some consumers also migrated out of cities to the suburbs when policies around remote work loosened, further increasing demand for home goods.

Casper, selling both online and in a popular category, was uniquely positioned to capitalize on the trend.

"Casper delivered record first quarter financial results that exceeded our expectations, and that momentum has continued in the second quarter," CEO Philip Krim said in a statement.

"We continue to see strong demand signals across our business, and expect top-line growth to accelerate in the coming quarters ... With the significant opportunities in front of us, we remain confident in our ability to achieve our growth and profitability goals, as we build on our recent progress to best position Casper for the future," he added.

The brand on Thursday also raised its financial outlook: For the second quarter, Casper expects net revenue to be between $146 million and $153 million, and net loss to be between $15 million and $18 million. For the full year, the company projects revenue to be between $580 million and $610 million, representing about a 20% increase.

Over the past year, Casper has expanded its distribution through retail partnerships, including with Nordstrom, Sam's Club, Ashley HomeStore, Denver Mattress and Mathis Brothers, pushing its total to over 20 partners. The retailer late last year launched its in-house field team to support these retail partnerships and drive enhanced customer conversion, Chief Commercial Officer Emilie Arel said on a call with analysts.

"Our field team's tailor approach ensures that our brand equity holds once a customer walks into one of our retail partner locations and empowers sales associates to have informed conversations with customers about Casper's products and technology," Arel said. "This strategy has been a real unlock for us at our partnered trial doors."

DTC mattress brand Purple has been experiencing similar success this past year. The brand on Monday reported first quarter net revenue increased 52% to $186.4 million, with direct-to-consumer revenue rising 54.8% and wholesale increasing 47.6%. Net income for the period reached $20.9 million, a decrease of 25.4% from the year-ago period.

Purple also raised its financial outlook: For the second quarter, the company projects revenue to be between $200 million and $210 million. For the full year, it expects net revenue to be between $860 million and $900 million, an increase of 33% to 39% year over year and up from its previous range of $840 million to $880 million.