Purple Innovations Possible breakout Tuesday $prpl 20% upside

Purple says demand accelerated sharply in the first weeks of April 16:26 PRPL Following a temporary slowdown in direct-to-consumer sales in late March after initial shelter-at-home directives were announced, demand accelerated sharply in the first weeks of April. Because the company is vertically integrated with entirely domestic production facilities, Purple was able to adapt quickly to both increased demand and shifts in product-mix. Additionally, with significantly more sales in DTC, Purple saw margin improvement across the board. Regarding supply chain, the majority of its raw materials and components are sourced domestically, which has reduced the company's vulnerability to global uncertainty arising from the COVID-19 pandemic. The following summarizes Purple's business and operations early in Q2: April 2020 DTC orders increased more than 170% to approximately $54M compared with the same month last year driven by growth in mattresses as well as ancillary products including pillows, sheets, and especially seat cushions. To meet increased DTC demand, the company ended its temporary furlough for the vast majority of manufacturing personnel and is currently operating at nearly full capacity ahead of the Memorial Day promotional period. While wholesale sales were down 42.7% in April year-over-year, weekly wholesale orders have started to increase on a sequential basis. Receivables are current on contract terms with most wholesale partners and closely monitoring future orders to manage exposure to collection risk.

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