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KIDPIK Reports First Quarter 2024 Financial Results

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Kidpik Corp. reported its Q1 2024 financial results, highlighting a revenue decline of 44.4% YoY to $2.2 million and a gross margin improvement to 69.9% from 59.8% in Q1 2023. The company shipped 195,000 items, down from 340,000 in the previous year, but saw an increased average shipment keep rate of 78.2%, up from 68.1%. Net loss for the quarter stood at $1.8 million or $0.94 per share, with an adjusted EBITDA loss of $1.4 million.

In strategic developments, Kidpik has entered into a merger agreement with Nina Footwear, anticipating increased revenue, cash flow, and stockholder value post-merger. The merger is expected to close in Q3 2024, subject to customary closing conditions and necessary stockholder approvals. The company is not conducting an earnings call for Q1 2024 as it focuses on the merger process.

Positive
  • Gross margin improved to 69.9% in Q1 2024 from 59.8% in Q1 2023.
  • Average shipment keep rate increased to 78.2% from 68.1% YoY.
  • Potential merger with Nina Footwear could enhance revenue, cash flow, and stockholder value.
  • Merger is expected to strengthen Kidpik's balance sheet.
Negative
  • Revenue dropped by 44.4% YoY to $2.2 million.
  • Shipped items decreased to 195,000 from 340,000 YoY.
  • Net loss of $1.8 million or $0.94 per share.
  • Adjusted EBITDA showed a loss of $1.4 million.
  • Ceased purchasing new inventory, potentially affecting future sales.

Kidpik’s first quarter 2024 financial results reflect a challenging period for the company. The significant $2.2 million in revenue, marking a 44.4% decline year-over-year, is a stark indicator of reduced sales activity. This might be attributable to several factors, including decreased consumer spending or increased competition in the e-commerce sector.

Gross margin improved to 69.9%, up from 59.8% in the first quarter of 2023, suggesting that the company has managed to improve its cost efficiency or pricing strategy. This is a positive sign as it indicates better utilization of resources and potentially higher profitability per unit of sale.

However, the $1.8 million net loss and adjusted EBITDA loss of $1.4 million reveal that the company is still struggling to turn a profit despite these improvements. The decrease in the number of shipped items from 340,000 to 195,000 also emphasizes a marked decline in demand or fulfillment capacity.

The upcoming merger with Nina Footwear Corp. seems to be a strategic move aimed at bolstering Kidpik’s financial health and expanding its market reach. This merger could potentially lead to increased revenue, better cash flow and a stronger balance sheet. However, investors should be cautious as the success of this merger depends on various factors, including successful integration, market reception and operational synergies.

In the short term, the halted purchase of new inventory and efforts to clear current inventory might depress sales even further. However, in the long term, if the merger proceeds smoothly, it may present growth opportunities and enhance shareholder value.

Kidpik’s performance in the first quarter of 2024 demonstrates significant market challenges. The 44.4% decline in revenue signals potential issues with customer retention or acquisition, possibly due to intensified competition or waning subscription interest. The improvement in average shipment keep rate to 78.2% from 68.1% suggests that those who do receive shipments are more satisfied with their purchases, indicating that the product quality or curation has improved.

The merger with Nina Footwear is likely a strategic move to diversify Kidpik’s product offerings and possibly cross-sell between existing customer bases. This could be important for revitalizing Kidpik’s revenue streams and gaining market traction. The footwear market is expansive and merging with Nina Footwear could open up new consumer segments and enhance brand visibility. Integration and execution post-merger will be key in realizing these benefits.

For retail investors, considering the merger’s potential and the current financial drift, it’s important to monitor the merger’s progress and any interim financial stress points. A successful merger could lead to significant upside, but the current financial losses and halted inventory purchases present risks that need careful evaluation.

The Merger Agreement between Kidpik and Nina Footwear Corp. introduces several legal and regulatory considerations that investors should be aware of. The merger is subject to customary closing conditions, including stockholder approvals and the preparation of a proxy statement. These steps ensure transparency and compliance with corporate governance standards.

From a legal perspective, the merger aims to create a more robust corporate entity. However, the success of this merger will depend on the smoothness of the integration process. Any delays or complications in obtaining stockholder approvals or in the integration phase could impact the projected benefits of the merger.

Investors should keep an eye on the timetable for these approvals and any legal hurdles that could arise. The merger’s completion, projected for the third quarter of 2024, is a critical milestone. Successful navigation through these legal processes could mean a stronger market position for the merged entity, but any missteps could lead to financial and operational setbacks.

NEW YORK--(BUSINESS WIRE)-- Kidpik Corp. (“KIDPIK” or the “Company”), an online clothing subscription-based e-commerce company, today reported its financial results for the first quarter 2024 ended March 30, 2024.

First Quarter 2024 Highlights:

  • Revenue, net: was $2.2 million, a year over year decrease of 44.4%.
  • Gross margin: was 69.9%, compared to 59.8% in the first quarter of 2023.
  • Shipped items: were 195,000 items, compared to 340,000 shipped items in the first quarter of 2023.
  • Average shipment keep rate: increased to 78.2%, compared to 68.1% in the first quarter of 2023.
  • Net Loss: was $1.8 million or $0.94 per share.
  • Adjusted EBITDA: was a loss of $1.4 million (see “Non-GAAP Financial Measures”, below).

“As previously disclosed, on March 29, 2024, we entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Nina Footwear Corp., a Delaware corporation (“Nina Footwear”), and Kidpik Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Kidpik (“Merger Sub”), whereby Nina Footwear will merge with and into Merger Sub, with Nina Footwear continuing as the surviving entity (the “Merger”). While we work towards closing the Merger, we have ceased the purchase of new inventory and are working to clear current inventory in anticipation of the combination with Nina Footwear,” stated Mr. Ezra Dabah, the Company’s Chief Executive Officer.

“We and Nina Footwear remain committed to closing the Merger, a transaction which we believe will increase Kidpik’s revenue, cashflow and prospects, while also strengthening Kidpik’s balance sheet and significantly increasing stockholder value,” said Mr. Dabah.

The closing of the Merger is subject to customary closing conditions, including the preparation and mailing of a proxy statement by Kidpik, and the receipt of required stockholder approvals from Kidpik and Nina Footwear stockholders, and is expected to close in the third quarter of 2024.

Kidpik will not be holding an earnings call to discuss first quarter 2024, as the Company continues to move forward with the Merger.

About Kidpik Corp.

Founded in 2016, KIDPIK (Nasdaq:PIK) is an online clothing subscription box for kids, offering mix & match, expertly styled outfits that are curated based on each member’s style preferences. KIDPIK delivers a surprise box monthly or seasonally, providing an effortless shopping experience for parents and a fun discovery for kids. Each seasonal collection is designed in-house by a team with decades of experience designing childrenswear. KIDPIK combines the expertise of fashion stylists with proprietary data and technology to translate kids’ unique style preferences into surprise boxes of curated outfits. We also sell our branded clothing and footwear through our e-commerce website, shop.kidpik.com. For more information, visit www.kidpik.com.

Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of our financial information with additional useful information in evaluating our performance. We believe that adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, and that this supplemental measure facilitates comparisons between companies. This non-GAAP financial measure may be different than similarly titled measures used by other companies. We calculate Adjusted EBITDA as net loss before other expense, net, interest, taxes, depreciation and amortization, adjusted to exclude the effects of equity-based compensation expense, and certain non-routine items. We have provided below a reconciliation of Adjusted EBITDA to net loss, the most directly comparable U.S. GAAP financial measure.

Our non-GAAP financial measure should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

  • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
  • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
  • Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
  • Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
  • Adjusted EBITDA does not reflect certain non-routine items that may represent a reduction in cash available to us; and
  • Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measures, please see the section titled “Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA),” included at the end of this release.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this press release regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). These include, but are not limited to, statements regarding the anticipated completion and effects of the proposed Merger, projections and estimates of Kidpik’s corporate strategies, future operations and plans, including the costs thereof; and other statements regarding management’s intentions, plans, beliefs, expectations or forecasts for the future. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Kidpik and Nina Footwear undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors, including, but not limited to, the outcome of any legal proceedings that may be instituted against Nina Footwear or Kidpik following the announcement of the Merger; the inability to complete the Merger, including due to the failure to obtain approval of the stockholders of Kidpik or Nina Footwear; delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regular reviews required to complete the Merger, if any; the inability to recognize the anticipated benefits of the Merger, which may be affected by, among other things, competition, the ability of the combined company to grow and successfully execute on its business plan; costs related to the Merger; changes in the applicable laws or regulations; the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors; the combined company’s ability to manage future growth; the combined company’s ability to raise funding; the complexity of numerous regulatory and legal requirements that the combined company needs to comply with to operate its business; the reliance on the combined company’s management; the prior experience and successes of the combined company’s management team are not indicative of any future success; Kidpik’s and the combined company’s ability to meet Nasdaq’s continued listing requirements; Kidpik and the combined company’s ability to maintain the listing of their common stock on Nasdaq; the ability to obtain additional funding, the terms of such funding and potential dilution caused thereby; the continuing effect of rising interest rates and inflation on Kidpik’s and the combined company’s operations, sales, and market for their products; deterioration of the global economic environment; rising interest rates and inflation and Kidpik’s and the combined company’s ability to control costs, including employee wages and benefits and other operating expenses; Kidpik’s decision to cease purchasing new products; Kidpik’s history of losses; Kidpik’s and the combined company’s ability to maintain current members and customers and grow members and customers; risks associated with the effect of global pandemics, and governmental responses thereto on Kidpik’s and the combined company’s operations, those of Kidpik’s and the combined company’s vendors, Kidpik’s and the combined company’s customers and members and the economy in general; risks associated with Kidpik’s and the combined company’s supply chain and third-party service providers, interruptions in the supply of raw materials and merchandise; increased costs of raw materials, products and shipping costs due to inflation; disruptions at Kidpik’s and the combined company’s warehouse facility and/or of their data or information services, Kidpik’s and the combined company’s ability to locate warehouse and distribution facilities and the lease terms of any such facilities; issues affecting our shipping providers; disruptions to the internet; risks that effect our ability to successfully market Kidpik’s and the combined company’s products to key demographics; the effect of data security breaches, malicious code and/or hackers; increased competition and our ability to maintain and strengthen Kidpik’s and the combined company’s brand name; changes in consumer tastes and preferences and changing fashion trends; material changes and/or terminations of Kidpik’s and the combined company’s relationships with key vendors; significant product returns from customers, excess inventory and Kidpik’s and the combined company’s ability to manage our inventory; the effect of trade restrictions and tariffs, increased costs associated therewith and/or decreased availability of products; Kidpik’s and the combined company’s ability to innovate, expand their offerings and compete against competitors which may have greater resources; the fact that Kidpik’s Chief Executive Officer has majority voting control over Kidpik and will have majority control over the combined company; if the use of “cookie” tracking technologies is further restricted, regulated, or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior; Kidpik’s and the combined company’s ability to comply with the covenants of future loan and lending agreements and covenants; Kidpik’s and the combined company’s ability to prevent credit card and payment fraud; the risk of unauthorized access to confidential information; Kidpik’s and the combined company’s ability to protect intellectual property and trade secrets, claims from third-parties that Kidpik and/or the combined company have violated their intellectual property or trade secrets and potential lawsuits in connection therewith; Kidpik’s and the combined company’s ability to comply with changing regulations and laws, penalties associated with any non-compliance (inadvertent or otherwise), the effect of new laws or regulations, and Kidpik’s and the combined company’s ability to comply with such new laws or regulations; changes in tax rates; Kidpik’s and the combined company’s reliance and retention of management; the outcome of future lawsuits, litigation, regulatory matters or claims; the fact that Kidpik and the combined company have a limited operating history; the effect of future acquisitions on Kidpik’s and the combined company’s operations and expenses; and others that are included from time to time in filings made by Kidpik with the Securities and Exchange Commission, many of which are beyond the control of Kidpik and the combined company, including, but not limited to, in the “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” sections in Kidpik’s Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which it has filed, and files from time to time, with the Securities and Exchange Commission, including, but not limited to its Annual Report on Form 10-K for the year ended December 30, 2023 and its Quarterly Report on Form 10-Q for the quarter ended March 30, 2024. These reports are available at www.sec.gov and on Kidpik’s website at https://investor.kidpik.com/sec-filings. Kidpik cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to Kidpik or any person acting on behalf of Kidpik are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on Kidpik’s and the combined company’s future results and/or could cause their actual results and financial condition to differ materially from those indicated in the forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. Kidpik cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Except as required by law, neither Nina Footwear nor Kidpik undertakes any obligation to update publicly any forward-looking statements for any reason after the date of this press release to conform these statements to actual results or to changes in their expectations. If they update one or more forward-looking statements, no inference should be drawn that they will make additional updates with respect to those or other forward-looking statements.

Additional Information and Where to Find It

In connection with the proposed Merger, Kidpik intends to file a proxy statement with the Securities and Exchange Commission (the “Proxy Statement”), that will be distributed to holders of Kidpik’s common stock in connection with its solicitation of proxies for the vote by Kidpik’s stockholders with respect to the proposed Merger and other matters as may be described in the Proxy Statement. The Proxy Statement, when it is filed and mailed to stockholders, will contain important information about the proposed Merger and the other matters to be voted upon at a meeting of Kidpik’s stockholders to be held to approve the proposed Merger and other matters (the “Merger Meeting”). Kidpik may also file other documents with the SEC regarding the proposed Merger. Kidpik stockholders and other interested persons are advised to read, when available, the Proxy Statement, as well as any amendments or supplements thereto, because they will contain important information about the proposed Merger. When available, the definitive Proxy Statement will be mailed to Kidpik stockholders as of a record date to be established for voting on the proposed Merger and the other matters to be voted upon at the Merger Meeting.

Kidpik’s stockholders may obtain copies of the aforementioned documents and other documents filed by Kidpik with the SEC, without charge, once available, at the SEC’s web site at www.sec.gov, on Kidpik’s website at https://investor.kidpik.com/sec-filings or, alternatively, by directing a request by mail, email or telephone to Kidpik at 200 Park Avenue South, 3rd Floor, New York, New York 10003; ir@kidpik.com; or (212) 399-2323, respectively.

Participants in the Solicitation

Kidpik, Nina Footwear, and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from Kidpik’s stockholders with respect to the proposed Merger. Information regarding the persons who may be deemed participants in the solicitation of proxies from Kidpik’s stockholders in connection with the proposed Merger will be contained in the Proxy Statement relating to the proposed Merger, when available, which will be filed with the SEC. Additionally, information about Kidpik’s directors and executive officers and their ownership of Kidpik is available in Kidpik’s Annual Report on Form 10-K/A (Amendment No. 1), as filed with the Securities and Exchange Commission on April 29, 2024 (the “Amended Form 10-K”). To the extent holdings of securities by potential participants (or the identity of such participants) have changed since the information contained in the Amended Form 10-K, such information has been or will be reflected on Kidpik’s Statements of Change in Ownership on Forms 3 and 4 filed with the SEC. You may obtain free copies of these documents using the sources indicated above.

Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement and other relevant materials to be filed with the SEC regarding the Merger Agreement when they become available. Investors should read the Proxy Statement carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Kidpik using the sources indicated above.

Non-Solicitation

This communication is for informational purposes only and is not intended to and shall not constitute a proxy statement or the solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Merger Agreement and is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy or subscribe for any securities or a solicitation of any vote of approval, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Kidpik Corp.
Condensed Interim Statements of Operations
(Unaudited)

 

 

 

 

 

 

 

 

 

13 Weeks Ended

 

 

 

March 30, 2024

 

 

April 1, 2023

 

Revenue, net

 

$

2,239,305

 

 

$

4,029,478

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

673,541

 

 

 

1,619,226

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

1,565,764

 

 

 

2,410,252

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Shipping and handling

 

 

781,025

 

 

 

1,189,222

 

Payroll, related costs and non-cash stock-based compensation

 

 

898,559

 

 

 

1,111,101

 

General and administrative

 

 

1,611,816

 

 

 

2,024,562

 

Depreciation and amortization

 

 

12,575

 

 

 

10,689

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

3,303,975

 

 

 

4,335,574

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(1,738,211

)

 

 

(1,925,322

)

 

 

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

 

 

 

Interest expense

 

 

31,200

 

 

 

25,190

 

 

 

 

 

 

 

 

 

 

Total other expenses

 

 

31,200

 

 

 

25,190

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,769,411

)

 

$

(1,950,512

)

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

Basic

 

$

(0.94

)

 

$

(1.27

)

Diluted

 

$

(0.94

)

 

$

(1.27

)

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

1,890,794

 

 

 

1,537,639

 

Diluted

 

 

1,890,794

 

 

 

1,537,639

 

Kidpik Corp.
Condensed Interim Balance Sheets

 

 

 

March 30, 2024

 

 

December 30,
2023

 

 

 

(Unaudited)

 

 

(Audited)

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash

 

$

10,354

 

 

$

194,515

 

Restricted cash

 

 

4,618

 

 

 

4,618

 

Accounts receivable

 

 

103,820

 

 

 

211,739

 

Inventory

 

 

4,181,100

 

 

 

4,854,641

 

Prepaid expenses and other current assets

 

 

688,890

 

 

 

761,969

 

Total current assets

 

 

4,988,782

 

 

 

6,027,482

 

 

 

 

 

 

 

 

 

 

Leasehold improvements and equipment, net

 

 

84,561

 

 

 

97,136

 

Operating lease right-of-use assets

 

 

1,686,722

 

 

 

992,396

 

Total assets

 

$

6,760,065

 

 

$

7,117,014

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

1,819,337

 

 

$

1,862,266

 

Accounts payable, related party

 

 

1,954,699

 

 

 

1,868,411

 

Accrued expenses and other current liabilities

 

 

472,116

 

 

 

438,034

 

Operating lease liabilities, current

 

 

394,521

 

 

 

281,225

 

Short-term debt and related party loans

 

 

1,149,197

 

 

 

850,000

 

Total current liabilities

 

 

5,789,870

 

 

 

5,299,936

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, net of current portion

 

 

1,368,918

 

 

 

780,244

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

7,158,788

 

 

 

6,080,180

 

 

 

 

 

 

 

 

 

 

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 March 30, 2024 and December 30, 2023, respectively

 

 

-

 

 

 

-

 

Common stock, par value $0.001, 75,000,000 shares authorized, of which 1,951,638 shares are issued and outstanding as of March 30, 2024, and 1,872,433 shares issued and outstanding on December 30, 2023

 

 

1,952

 

 

 

1,872

 

Additional paid-in capital

 

 

52,808,963

 

 

 

52,475,189

 

Accumulated deficit

 

 

(53,209,638

)

 

 

(51,440,227

)

Total stockholders’ (deficit) equity

 

 

(398,723

)

 

 

1,036,834

 

Total liabilities and stockholders’ (deficit) equity

 

$

6,760,065

 

 

$

7,117,014

 

Kidpik Corp.
Condensed Interim Statements of Cash Flows

 

 

13 Weeks Ended

 

 

 

March 30, 2024

 

 

April 1, 2023

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,769,411

)

 

$

(1,950,512

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

12,575

 

 

 

10,689

 

Equity-based compensation

 

 

333,854

 

 

 

267,476

 

Bad debt expense

 

 

19,684

 

 

 

80,153

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

 

88,235

 

 

 

63,597

 

Inventory

 

 

673,541

 

 

 

1,515,014

 

Prepaid expenses and other current assets

 

 

73,079

 

 

 

137,521

 

Operating lease right-of-use assets and liabilities

 

 

7,644

 

 

 

13,217

 

Accounts payable

 

 

(42,929

)

 

 

(436,759

)

Accounts payable, related parties

 

 

86,288

 

 

 

230,382

 

Accrued expenses and other current liabilities

 

 

34,082

 

 

 

(191,466

)

Net cash used in operating activities

 

 

(483,358

)

 

 

(260,688

)

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of leasehold improvements and equipment

 

 

-

 

 

 

(75,238

)

Net cash used in investing activities

 

 

-

 

 

 

(75,238

)

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Net proceeds from advance payable

 

 

214,197

 

 

 

 

Net proceeds from related party loan

 

 

85,000

 

 

 

-

 

Net cash provided by financing activities

 

 

299,197

 

 

 

-

 

Net decrease in cash and restricted cash

 

 

(184,161

)

 

 

(335,926

)

 

 

 

 

 

 

 

 

Cash and restricted cash, beginning of period

 

 

199,133

 

 

 

605,213

 

Cash and restricted cash, end of period

 

$

14,972

 

 

$

269,287

 

 

 

 

 

 

 

 

 

Reconciliation of cash and restricted cash:

 

 

 

 

 

 

 

Cash

 

$

10,354

 

 

$

264,669

 

Restricted cash

 

 

4,618

 

 

 

4,618

 

 

 

$

14,972

 

 

$

269,287

 

Supplemental disclosure of cash flow data:

 

 

 

 

 

 

 

Interest paid

 

$

3,760

 

 

$

-

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

Record right-of-use asset and operating lease liabilities

 

$

768,756

 

 

$

-

 

RESULTS OF OPERATIONS

The Company’s revenue, net is disaggregated based on the following categories:

 

 

13 weeks
ended
March 30,
2024

 

 

13 weeks
ended
April 1,
2023

 

 

Change
($)

 

 

Change
(%)

 

Revenue by channel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription boxes

 

$

1,516,665

 

 

$

2,971,567

 

 

$

(1,454,902

)

 

 

(49.0

)%

Third-party websites

 

 

258,900

 

 

 

436,298

 

 

 

(177,398

)

 

 

(40.7

)%

Online website sales

 

 

463,740

 

 

 

621,613

 

 

 

(157,873

)

 

 

(25.4

)%

Total revenue

 

$

2,239,305

 

 

$

4,029,478

 

 

$

(1,790,173

)

 

 

(44.4

)%

Gross Margin

 

For the 13 weeks ended

 

 

 

March 30, 2024

 

 

April 1, 2023

 

 

 

 

 

 

 

 

Gross margin

 

 

69.9

%

 

 

59.8

%

 

Gross profit is equal to our net sales less cost of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin. Cost of sales consists of the purchase price of merchandise sold to customers and includes import duties and other taxes, freight in, returns from customers, inventory write-offs, and other miscellaneous shrinkage. The improvement in the gross margin was the result of an inventory write-down in the fourth quarter of 2023. Without the reduction of the cost basis due to the write-down, gross margin would be 53.5% for the 13 weeks ended March 30, 2024.

Shipped Items

We define shipped items as the total number of items shipped in a given period to our customers through our active subscription, Amazon and online website sales.

 

 

For the 13 weeks ended

 

 

 

(In thousands)

 

 

 

March 30, 2024

 

 

April 1, 2023

 

 

 

 

 

 

 

 

Shipped Items

 

 

195

 

 

 

340

 

 

Average Shipment Keep Rate

Average shipment keep rate is calculated as the total number of items kept by our customers divided by total number of shipped items in a given period.

 

 

For the 13 weeks ended

 

 

 

March 30, 2024

 

 

April 1, 2023

 

 

 

 

 

 

 

 

Average Shipment Keep Rate

 

 

78.2

%

 

 

68.1

%

 

Revenue by Channel

 

 

13 weeks
ended
March 30,
2024

 

 

13 weeks
ended
April 1,
2023

 

 

Change
($)

 

 

Change
(%)

 

Revenue by channel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscription boxes

 

$

1,516,665

 

 

$

2,971,567

 

 

$

(1,454,902

)

 

 

(49.0

)%

Third-party websites

 

 

258,900

 

 

 

436,298

 

 

 

(177,398

)

 

 

(40.7

)%

Online website sales

 

 

463,740

 

 

 

621,613

 

 

 

(157,873

)

 

 

(25.4

)%

Total revenue

 

$

2,239,305

 

 

$

4,029,478

 

 

$

(1,790,173

)

 

 

(44.4

)%

Subscription Boxes Revenue

 

 

13 weeks
ended
March 30,
2024

 

 

13 weeks
ended
April 1,
2023

 

 

Change
($)

 

 

Change
(%)

 

Subscription boxes revenue from

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active subscriptions – recurring boxes

 

$

1,451,448

 

 

$

2,401,026

 

 

$

(949,578

)

 

 

(39.5

)%

New subscriptions – first box

 

 

65,217

 

 

 

570,541

 

 

 

(505,324

)

 

 

(88.6

)%

Total subscription boxes revenue

 

$

1,516,665

 

 

$

2,971,567

 

 

$

(1,454,902

)

 

 

(49.0

)%

Revenue by Product Line

 

 

13 weeks
ended
March 30,
2024

 

 

13 weeks
ended
April 1,
2023

 

 

Change
($)

 

 

Change
(%)

 

Revenue by product line

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Girls’ apparel

 

$

1,675,217

 

 

$

3,047,756

 

 

$

(1,372,539

)

 

 

(45.0

)%

Boys’ apparel

 

 

486,995

 

 

 

787,159

 

 

 

(300,164

)

 

 

(38.1

)%

Toddlers’ apparel

 

 

77,093

 

 

 

194,563

 

 

 

(117,470

)

 

 

(60.4

)%

Total revenue

 

$

2,239,305

 

 

$

4,029,478

 

 

$

(1,790,173

)

 

 

(44.4

)%

Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)

We define adjusted EBITDA as net loss excluding interest income/expense, other (income) expense, net, provision for income taxes, depreciation and amortization, and equity-based compensation expense, and certain non-routine items. The following table presents a reconciliation of net loss, the most comparable GAAP financial measure, to adjusted EBITDA for each of the periods presented:

 

 

For the 13 weeks Ended

 

 

 

March 30, 2024

 

 

April 1, 2023

 

Net loss

 

$

(1,769,411

)

 

$

(1,950,512

)

Add:

 

 

 

 

 

 

 

 

Interest expense

 

 

31,200

 

 

 

25,190

 

Other income, net

 

 

-

 

 

 

-

 

Depreciation and amortization

 

 

12,575

 

 

 

10,689

 

Equity-based compensation

 

 

333,854

 

 

 

267,476

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

(1,391,782

)

 

$

(1,647,157

)

See also “Non-GAAP Financial Measures”, above.

Investor Relations Contact:

ir@kidpik.com

Media:

press@kidpik.com

Source: Kidpik Corp.

FAQ

What were Kidpik's revenue figures for Q1 2024?

Kidpik reported revenue of $2.2 million for Q1 2024, a 44.4% decrease YoY.

What is the gross margin for Kidpik in Q1 2024?

Kidpik's gross margin for Q1 2024 was 69.9%, an improvement from 59.8% in Q1 2023.

How many items did Kidpik ship in Q1 2024?

Kidpik shipped 195,000 items in Q1 2024, down from 340,000 items in Q1 2023.

What is Kidpik's net loss for Q1 2024?

Kidpik's net loss for Q1 2024 was $1.8 million or $0.94 per share.

What is the adjusted EBITDA loss for Kidpik in Q1 2024?

Kidpik's adjusted EBITDA loss for Q1 2024 was $1.4 million.

What is the expected closing date for the Kidpik and Nina Footwear merger?

The merger between Kidpik and Nina Footwear is expected to close in Q3 2024.

What are the anticipated benefits of Kidpik's merger with Nina Footwear?

The merger is expected to increase Kidpik's revenue, cash flow, and stockholder value, while strengthening its balance sheet.

Kidpik Corp.

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