New York, NY – November 14, 2023 - Kidpik Corp. (NASDAQ: PIK) ("kidpik” or the "Company"), an online clothing subscription-based e-commerce company, today reported its financial results for the third quarter ended September 30, 2023.
Third Quarter 2023 Highlights:
- Revenue, net: was $3.4 million, a year over year decrease of 6.7%
- Gross margin: was 61.1%, a year over year increase of 80 basis points from 60.3% in the third quarter of 2022
- Shipped items: were 292,000 items, compared to 358,000 shipped items in the third quarter of 2022
- Average shipment keep rate: increased to 82.6%, compared to 68.5% in the third quarter of 2022
- Net Loss: was $1.9 million or $0.24 per share, compared to a net loss of $2.4 million or a loss of $0.32 per share in the third quarter of 2022
- Adjusted EBITDA: was a loss of $1.6 million (see “Non-GAAP Financial Measures”, below)
“During the 3rd quarter, we continued to execute our plan to reduce inventory levels while maintaining our gross margin of about 61%. Our 3rd quarter results were, for the most part, consistent with our 2nd quarter earnings,” commented Ezra Dabah, CEO of Kidpik.
“We have substantially reduced purchases on new inventory and are focused on increasing sales from our current elevated inventory level, which we believe will support our cash flow needs in the short term. We are also working to increase our proprietary brand sales through our own e-commerce site, and invite you all to visit our newly launched holiday website at shop.kidpik.com,” concluded Dabah.
As a result of the difficult economic environment in which consumers are pulling back on spending on non-essential items, including clothing, as well as increases in the Company’s cost to acquire customers, due to changes in the use of “cookie” tracking technologies, the Company is currently working to reduce expenses and overhead, sell off inventory, and workforce reduction. Additionally, the Company plans to initiate a formal review process to evaluate strategic alternatives for the Company. The Board of Directors and management team are committed to acting in the best interests of the Company, its stockholders and its stakeholders. Transactions which may be undertaken by the Company, may include, but are not limited to, business combinations, liquidations of assets and/or a sale of the Company or its assets. There is no deadline or definitive timetable set for completion of the strategic alternatives review process and there can be no assurance that this process will result in the Company pursuing a transaction or any other strategic outcome.
The Company does not intend to make any further public comment regarding the review of strategic alternatives until it has been completed or the Company determines that a disclosure is required by law or otherwise deemed appropriate.
Kidpik Corp.
Condensed Interim Statements of Operations
(Unaudited)
|
|
|
For the 13 weeks ended |
|
|
For the 39 weeks ended |
|
||||||||||
|
|
|
September 30, 2023 |
|
|
October 1, 2022 |
|
|
September 30, 2023 |
|
|
October 1, 2022 |
|
||||
|
Revenues,
net
|
|
$ |
3,389,183 |
|
|
$ |
3,633,467 |
|
|
$ |
10,867,580 |
|
|
$ |
11,734,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of goods sold
|
|
|
1,317,684 |
|
|
|
1,442,258 |
|
|
|
4,309,473 |
|
|
|
4,649,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
2,071,499 |
|
|
|
2,191,209 |
|
|
|
6,558,107 |
|
|
|
7,084,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipping
and handling
|
|
|
1,032,678 |
|
|
|
1,042,186 |
|
|
|
3,171,634 |
|
|
|
3,133,411 |
|
|
Payroll
and related costs
|
|
|
991,044 |
|
|
|
1,191,515 |
|
|
|
3,196,280 |
|
|
|
4,137,495 |
|
|
General
and administrative
|
|
|
1,939,108 |
|
|
|
2,366,283 |
|
|
|
5,988,543 |
|
|
|
5,850,066 |
|
|
Depreciation
and amortization
|
|
|
12,503 |
|
|
|
7,670 |
|
|
|
35,616 |
|
|
|
19,989 |
|
|
Total
operating expenses
|
|
|
3,975,333 |
|
|
|
4,607,654 |
|
|
|
12,392,073 |
|
|
|
13,140,961 |
|
|
Operating
loss
|
|
|
(1,903,834 |
) |
|
|
(2,416,445 |
) |
|
|
(5,833,966 |
) |
|
|
(6,056,381 |
) |
|
Other
expenses (income)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
22,117 |
|
|
|
21,885 |
|
|
|
71,722 |
|
|
|
51,485 |
|
|
Other
income
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(286,795 |
) |
|
Total
other expense (income)
|
|
|
22,117 |
|
|
|
21,885 |
|
|
|
71,722 |
|
|
|
(235,310 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(1,925,951 |
) |
|
$ |
(2,438,330 |
) |
|
$ |
(5,905,688 |
) |
|
$ |
(5,821,071 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.24 |
) |
|
|
(0.32 |
) |
|
|
(0.76 |
) |
|
|
(0.76 |
) |
|
Diluted |
|
|
(0.24 |
) |
|
|
(0.32 |
) |
|
|
(0.76 |
) |
|
|
(0.76 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
8,022,268 |
|
|
|
7,688,194 |
|
|
|
7,813,886 |
|
|
|
7,653,790 |
|
|
Diluted |
|
|
8,022,268 |
|
|
|
7,688,194 |
|
|
|
7,813,886 |
|
|
|
7,653,790 |
|
Kidpik Corp.
Condensed Interim Balance Sheets
|
|
|
September 30,
2023 |
|
|
December 31,
2022 |
|
||
|
|
|
(Unaudited) |
|
|
(Audited) |
|
||
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
55,687 |
|
|
$ |
600,595 |
|
|
Restricted
cash
|
|
|
4,618 |
|
|
|
4,618 |
|
|
Accounts
receivable
|
|
|
147,499 |
|
|
|
336,468 |
|
|
Inventory |
|
|
8,754,629 |
|
|
|
12,625,948 |
|
|
Prepaid
expenses and other current assets
|
|
|
721,011 |
|
|
|
1,043,095 |
|
|
Total
current assets
|
|
|
9,683,444 |
|
|
|
14,610,724 |
|
|
|
|
|
|
|
|
|
|
|
|
Leasehold
improvements and equipment, net
|
|
|
109,639 |
|
|
|
67,957 |
|
|
Operating
lease right-of-use assets
|
|
|
1,066,825 |
|
|
|
1,469,665 |
|
|
Total
assets
|
|
$ |
10,859,908 |
|
|
$ |
16,148,346 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$ |
1,930,858 |
|
|
$ |
2,153,389 |
|
|
Accounts
payable, related party
|
|
|
1,709,708 |
|
|
|
1,107,665 |
|
|
Accrued
expenses and other current liabilities
|
|
|
365,650 |
|
|
|
587,112 |
|
|
Operating
lease liabilities, current
|
|
|
273,840 |
|
|
|
438,957 |
|
|
Short-term
debt, related party
|
|
|
850,000 |
|
|
|
2,050,000 |
|
|
Total
current liabilities
|
|
|
5,130,056 |
|
|
|
6,337,123 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
lease liabilities, net of current portion
|
|
|
853,261 |
|
|
|
1,061,469 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
5,983,317 |
|
|
|
7,398,592 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity
|
|
|
|
|
|
|
|
|
|
Preferred
stock, par value $0.001, 25,000,000 shares authorized, of which no shares are
issued and outstanding as of September 30, 2023 and December 31, 2022,
respectively
|
|
|
- |
|
|
|
- |
|
|
Common
stock, par value $0.001, 75,000,000 shares authorized, of which 9,362,166
shares are issued and outstanding as of September 30, 2023, and 7,688,194
shares issued and outstanding on December 31, 2022
|
|
|
9,362 |
|
|
|
7,688 |
|
|
Additional
paid-in capital
|
|
|
52,307,362 |
|
|
|
50,276,511 |
|
|
Accumulated
deficit
|
|
|
(47,440,133 |
) |
|
|
(41,534,445 |
) |
|
Total
stockholders’ equity
|
|
|
4,876,591 |
|
|
|
8,749,754 |
|
|
Total
liabilities and stockholders’ equity
|
|
$ |
10,859,908 |
|
|
$ |
16,148,346 |
|
Kidpik Corp.
Condensed Interim Statements of Cash Flows
(Unaudited)
|
|
|
39 Weeks Ended |
|
||||||||
|
|
|
September 30, 2023 |
|
|
October 1, 2022 |
|
|||||
|
Cash
flows from operating activities
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Net
loss
|
|
$ |
(5,905,688 |
) |
|
$ |
(5,821,071 |
) |
|||
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|||
|
Depreciation
and amortization
|
|
|
35,616 |
|
|
|
19,989 |
|
|||
|
Equity-based
compensation
|
|
|
838,972 |
|
|
|
1,355,068 |
|
|||
|
Bad
debt expense
|
|
|
236,200 |
|
|
|
456,388 |
|
|||
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
|
Accounts
receivable
|
|
|
(47,231 |
) |
|
|
(343,455 |
) |
|||
|
Inventory |
|
|
3,871,319 |
|
|
|
(2,674,680 |
) |
|||
|
Prepaid
expenses and other current assets
|
|
|
322,084 |
|
|
|
680,359 |
|
|||
|
Operating
lease right-of-use assets and liabilities
|
|
|
29,515 |
|
|
|
15,599 |
|
|||
|
Accounts
payable
|
|
|
(222,532 |
) |
|
|
(503,167 |
) |
|||
|
Accounts
payable, related parties
|
|
|
602,044 |
|
|
|
65,944 |
|
|||
|
Accrued
expenses and other current liabilities
|
|
|
(221,461 |
) |
|
|
(291,554 |
) |
|||
|
Net
cash used in operating activities
|
|
|
(461,162 |
) |
|
|
(7,040,580 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
|
|||
|
Purchases
of leasehold improvements and equipment
|
|
|
(77,299 |
) |
|
|
(42,903 |
) |
|||
|
Net
cash used in investing activities
|
|
|
(77,299 |
) |
|
|
(42,903 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
|||
|
Cash
used to settle net share equity awards
|
|
|
(6,447 |
) |
|
|
(33,692 |
) |
|||
|
Net
repayments from advance payable
|
|
|
- |
|
|
|
(932,155 |
) |
|||
|
Net
repayments from loan payable
|
|
|
- |
|
|
|
(150,000 |
) |
|||
|
Net
cash used in financing activities
|
|
|
(6,447 |
) |
|
|
(1,115,847 |
) |
|||
|
Net
decrease in cash and restricted cash
|
|
|
(544,908 |
) |
|
|
(8,199,330 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Cash
and restricted cash, beginning of period
|
|
|
605,213 |
|
|
|
8,420,500 |
|
|||
|
Cash
and restricted cash, end of period
|
|
$ |
60,305 |
|
|
$ |
221,170 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Reconciliation
of cash and restricted cash:
|
|
|
|
|
|
|
|
|
|||
|
Cash |
|
$ |
55,687 |
|
|
$ |
216,552 |
|
|||
|
Restricted
cash
|
|
|
4,618 |
|
|
|
4,618 |
|
|||
|
|
|
$ |
60,305 |
|
|
$ |
221,170 |
|
|||
|
Supplemental
disclosure of cash flow data:
|
|
|
|
|
|
|
|
|
|||
|
Interest
paid
|
|
$ |
2,315 |
|
|
$ |
21,830 |
|
|||
|
Supplemental
disclosure of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|||
|
Conversion
of stockholder debt to equity
|
|
$ |
1,200,000 |
|
|
|
- |
|
|||
|
Record
right-of use asset and operating lease liabilities
|
|
$ |
- |
|
|
|
1,857,925 |
|
|||
Revenue by Channel
|
|
|
13 weeks ended
September 30, 2023
|
|
|
13 weeks ended
October 1, 2022
|
|
|
Change
($)
|
|
|
Change
(%)
|
|
||||
|
Revenue
by channel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
boxes
|
|
$ |
2,427,615 |
|
|
$ |
2,867,930 |
|
|
$ |
(440,315 |
) |
|
|
(15.4 |
)% |
|
3
rd
party websites
|
|
|
491,851 |
|
|
|
468,835 |
|
|
|
23,016 |
|
|
4.9 |
% |
|
|
Online
website sales
|
|
|
469,717 |
|
|
|
296,702 |
|
|
|
173,015 |
|
|
|
58.3 |
% |
|
Total
revenue
|
|
$ |
3,389,183 |
|
|
$ |
3,633,467 |
|
|
$ |
(244,284 |
) |
|
|
(6.7 |
)% |
|
|
|
39 weeks ended
September 30, 2023
|
|
|
39 weeks ended
October 1, 2022
|
|
|
Change
($)
|
|
|
Change
(%)
|
|
||||
|
Revenue
by channel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
boxes
|
|
$ |
8,006,725 |
|
|
$ |
9,326,331 |
|
|
$ |
(1,319,606 |
) |
|
|
(14.1 |
)% |
|
3
rd
party websites
|
|
|
1,355,062 |
|
|
|
1,577,412 |
|
|
|
(222,350 |
) |
|
|
(14.1 |
)% |
|
Online
website sales
|
|
|
1,505,793 |
|
|
|
830,389 |
|
|
|
675,404 |
|
|
|
81.3 |
% |
|
Total
revenue
|
|
$ |
10,867,580 |
|
|
$ |
11,734,132 |
|
|
$ |
(866,552 |
) |
|
|
(7.4 |
)% |
Subscription Boxes Revenue
|
|
|
13 weeks ended
September 30, 2023
|
|
|
13 weeks ended
October 1, 2022
|
|
|
Change
($)
|
|
|
Change
(%)
|
|
||||
|
Subscription
boxes revenue from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
subscriptions – recurring boxes
|
|
$ |
1,971,223 |
|
|
$ |
2,297,212 |
|
|
$ |
(325,989 |
) |
|
|
(14.2 |
)% |
|
New
subscriptions - first box
|
|
|
456,392 |
|
|
|
570,718 |
|
|
|
(114,326 |
) |
|
|
(20.0 |
)% |
|
Total
subscription boxes revenue
|
|
$ |
2,427,615 |
|
|
$ |
2,867,930 |
|
|
$ |
(440,315 |
) |
|
|
(15.4 |
)% |
|
|
|
39 weeks ended
September 30, 2023
|
|
|
39 weeks ended
October 1, 2022
|
|
|
Change
($)
|
|
|
Change
(%)
|
|
||||
|
Subscription
boxes revenue from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
subscriptions – recurring boxes
|
|
$ |
6,549,547 |
|
|
$ |
8,084,104 |
|
|
$ |
(1,534,557 |
) |
|
|
(19.0 |
)% |
|
New
subscriptions - first box
|
|
|
1,457,178 |
|
|
|
1,242,227 |
|
|
|
214,951 |
|
|
|
17.3 |
% |
|
Total
subscription boxes revenue
|
|
$ |
8,006,725 |
|
|
$ |
9,326,331 |
|
|
$ |
(1,319,606 |
) |
|
|
(14.1 |
)% |
Revenue by Product Line
|
|
|
13 weeks ended
September 30, 2023
|
|
|
13 weeks ended
October 1, 2022
|
|
|
Change
($)
|
|
|
Change
(%)
|
|
||||
|
Revenue
by product line
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Girls’
apparel
|
|
$ |
2,599,762 |
|
|
$ |
2,692,466 |
|
|
$ |
(92,704 |
) |
|
|
(3.4 |
)% |
|
Boys’
apparel
|
|
|
642,051 |
|
|
|
758,733 |
|
|
|
(116,682 |
) |
|
|
(15.4 |
)% |
|
Toddlers’
apparel
|
|
|
147,370 |
|
|
|
182,268 |
|
|
|
(34,898 |
) |
|
|
(19.1 |
)% |
|
Total
revenue
|
|
$ |
3,389,183 |
|
|
$ |
3,633,467 |
|
|
$ |
(244,284 |
) |
|
|
(6.7 |
)% |
|
|
|
39 weeks ended
September 30, 2023
|
|
|
39 weeks ended
October 1, 2022
|
|
|
Change
($)
|
|
|
Change
(%)
|
|
||||
|
Revenue
by product line
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Girls’
apparel
|
|
$ |
8,284,482 |
|
|
$ |
8,712,027 |
|
|
$ |
(427,545 |
) |
|
|
(4.9 |
)% |
|
Boys’
apparel
|
|
|
2,070,147 |
|
|
|
2,448,178 |
|
|
|
(378,031 |
) |
|
|
(15.4 |
)% |
|
Toddlers’
apparel
|
|
|
512,951 |
|
|
|
573,927 |
|
|
|
(60,976 |
) |
|
|
(10.6 |
)% |
|
Total
revenue
|
|
$ |
10,867,580 |
|
|
$ |
11,734,132 |
|
|
$ |
(866,552 |
) |
|
|
(7.4 |
)% |
Balance Sheet and Cash Flow
- Cash at the end of the third quarter totaled $0.06 million compared to $0.6 million as of December 31, 2022.
- Net cash used in operating activities was $0.5 million at the end of the third quarter, compared to $7.0 million of cash used in operating activities in the third quarter of 2022.
- As of September 30, 2023, we had $9.7 million in total current assets, $5.1 million in total current liabilities and working capital of $4.6 million.
RESULTS OF OPERATIONS
The Company’s revenue, net, is disaggregated based on the following categories:
|
|
|
For the 13 weeks ended |
|
|
For the 39 weeks ended |
|
||||||||||
|
|
|
September 30, |
|
|
October 2, |
|
|
September 30, |
|
|
October 2, |
|
||||
|
Subscription
boxes
|
|
$ |
2,427,615 |
|
|
$ |
2,867,930 |
|
|
$ |
8,006,725 |
|
|
$ |
9,326,331 |
|
|
3rd
party websites
|
|
|
491,851 |
|
|
|
468,835 |
|
|
|
1,355,062 |
|
|
|
1,577,412 |
|
|
Online
website sales
|
|
|
469,717 |
|
|
|
296,702 |
|
|
|
1,505,793 |
|
|
|
830,389 |
|
|
Total
revenue
|
|
$ |
3,389,183 |
|
|
$ |
3,633,467 |
|
|
$ |
10,867,580 |
|
|
$ |
11,734,132 |
|
Gross Margin
|
|
|
For the 13 weeks ended |
|
|
For the 26 weeks ended
|
|
||||||||||
|
|
|
September 30, 2023 |
|
|
October 2, 2022 |
|
|
September 30, 2023 |
|
|
October 2, 2022 |
|
||||
|
|
|
|
||||||||||||||