• Total Revenue: $126.4 million, a 1% increase year-over-year.
• Direct-to-Consumer Revenue: $106.1 million, including $2 million from BARK Air, a 4% decline year-over-year.
• Commerce Segment Revenue: $20.3 million, a 43% increase year-over-year.
• Adjusted EBITDA: Negative $1.6 million, a $4.9 million improvement compared to last year.
• Gross Margin: 62.7%, up 90 basis points from the previous year.
• Shipping and Fulfillment Expenses: $36.7 million, up 3.4% year-over-year.
• Other G&A Expenses: $27.5 million, a $3.2 million improvement year-over-year.
• Marketing Expenses: $27.4 million, up $2.3 million year-over-year.
• Free Cash Flow: Negative $2 million for the quarter, negative $1.2 million year-to-date.
• Cash Balance: $115 million at the end of the quarter.
• Share Repurchase: $2.8 million spent in the quarter to repurchase 1.7 million shares.
• Full Year Revenue Guidance: $490 million to $500 million, reflecting flat to 2% growth year-over-year.
• Full Year Adjusted EBITDA Guidance: $1 million to $5 million.

• Warning! GuruFocus has detected 2 Warning Sign with BARK.

Release Date: February 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• BARK Inc (NYSE:BARK) surpassed the high end of revenue expectations and achieved a $4.9 million year-over-year improvement in adjusted EBITDA.
• The direct-to-consumer segment saw its highest quarter for new subscriptions in three years, with an 11% year-over-year increase at a lower acquisition cost.
• Commerce segment revenue grew by 43% due to new partnerships and expanded shelf space.
• BARK Air generated $2 million in revenue last quarter and is already producing positive gross profit.
• The transition to the Shopify platform has shown encouraging early results, with 43% of checkouts using Shop Pay, enhancing customer experience and conversion rates.

Negative Points

• Total revenue for the quarter only increased by 1% year-over-year, indicating slower overall growth.
• The direct-to-consumer segment declined by 4% compared to last year, partly due to migration challenges to the new Shopify platform.
• There were shipment delays in the D2C supply chain network, impacting customer retention.
• Marketing expenses increased by $2.3 million year-over-year, reflecting higher costs to acquire new customers.
• Adjusted EBITDA for the quarter was negative $1.6 million, despite improvements, indicating ongoing profitability challenges.

Q & A Highlights

Q: On your DTC segment, given the progress with migrating to the Shopify platform and marketing efficiencies, how should we think about the trajectory of revenue returning to growth for that segment? A: Matt Meeker, CEO: We expect stabilization in fiscal year 2026. Most growth will come from the commerce channel, which is a goal for us to take more revenue share. We had a good quarter with 43% year-over-year growth in that channel.

Q: Can you talk about your strategic vision for BARK Air and its potential impact on financials? A: Matt Meeker, CEO: It's too soon to call BARK Air a material driver. We're in an asset-light model, partnering with aviation companies. We are experimenting with new routes and price points to gauge demand.

Q: Can you clarify the fourth quarter guidance and the impact of shelf resets? A: Zahir Ibrahim, CFO: Shelf resets in retail happen in March-April, causing timing variability. Volume can shift from Q4 to Q1, depending on customer supply chains.

Q: How is the Chewy business performing, and can you provide any specifics on its contribution? A: Zahir Ibrahim, CFO: We started with Chewy in June with 30 SKUs, now over 150. We're seeing continued momentum and positive feedback from Chewy, with strong performance in toys and consumables.

Q: With DTC growing again, is this due to market recovery or new media strategies? A: Matt Meeker, CEO: It's largely due to new media strategies and the Shopify transition. We've improved creative approaches, channel investments, and moved ad spending to Shopify, which improved conversion and acquisition costs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.