On February 7, 2024, BARK Inc (BARK, Financial), a leading global omnichannel dog brand, released its 8-K filing, detailing the financial results for the fiscal third quarter ended December 31, 2023. The company, known for its dog-centric products and services, including monthly subscription services BarkBox and Super Chewer, reported a decline in revenue but showcased an improvement in profitability metrics such as gross margin and net loss.
Financial Performance Overview
BARK Inc (BARK, Financial) reported total revenue of $125.1 million, which was ahead of the company's guidance range but represented a 6.9% decrease compared to the same period last year. The decline in revenue was primarily attributed to fewer total orders, particularly a reduction in BarkBox and Super Chewer subscriptions. Despite the revenue downturn, the company's consolidated gross margin improved significantly to 61.8%, a 210 basis point increase year-over-year, driven by new contract pricing and a reduction in the unit cost of goods.
The company's net loss showed a substantial improvement, decreasing by 52.5% to $(10.1) million year-over-year. Adjusted EBITDA also improved to $(6.4) million, which was at the midpoint of the company's guidance range and a $6.4 million improvement versus last year. The improved profitability metrics were partly due to a decrease in general and administrative expenses, largely driven by a reduction in headcount and improved shipping terms.
Balance Sheet and Cash Flow Highlights
BARK Inc (BARK, Financial) ended the quarter with a strong cash and cash equivalents balance of $131.3 million, following a strategic repurchase of its outstanding convertible notes. The company's inventory balance decreased to $98.5 million, reflecting a $10.9 million decrease compared to the prior quarter and a $46.8 million decrease compared to last year, indicating efficient inventory management.
Net cash provided by operating activities was reported at $15.0 million, and free cash flow was a robust $13.3 million, marking a significant improvement from the previous year. This positive cash flow performance underscores BARK's enhanced operational efficiency and ability to generate cash from its core business activities.
Outlook and Management Commentary
Looking ahead, BARK Inc (BARK, Financial) provided updated guidance for the fiscal full year 2024, expecting total revenue growth of (8)% to (9)% year-over-year, with an Adjusted EBITDA of $(9.8) million to $(11.8) million. The company anticipates being Adjusted EBITDA positive in the fiscal fourth quarter and has solid visibility into bottom-line improvements in fiscal 2025.
Our results last quarter highlight the significant strides we've made as a public company. We delivered our strongest customer acquisition quarter in two years, surpassed the high-end of our revenue guidance range, and improved our gross margin by over 200 basis points year-over-year," said Matt Meeker, Co-Founder and Chief Executive Officer.
We've been very pleased with our ability to deliver consistent improvements in our profitability profile," added Zahir Ibrahim, Chief Financial Officer of BARK. "There is still work to do, however, we believe the business has reached an inflection point from a profitability standpoint."
The company's performance reflects its strategic focus on customer acquisition and operational efficiency. While challenges remain, BARK Inc (BARK, Financial) is positioning itself for a stronger fiscal 2025, leveraging its recent retail treat partnerships and ongoing improvements in profitability.
For more detailed information on BARK Inc (BARK, Financial)'s financial results, investors and interested parties are encouraged to review the full earnings release and join the conference call scheduled for today at 4:30 p.m. ET.
Explore the complete 8-K earnings release (here) from BARK Inc for further details.
