Industry Overview - The Retail – Miscellaneous industry is facing challenges due to inflationary pressures, leading to reduced consumer demand and increased operational costs for retailers [1][4] - Profitability in this sector relies on effective pricing strategies, supply chain management, and continuous innovation to meet consumer demands [3] Key Industry Trends - Soft demand is impacting revenues, with consumer purchasing power strained by higher prices and a decline in U.S. consumer confidence, as indicated by a drop in the Conference Board's index from 105.6 to 98.7 [4] - Companies are under pressure to maintain margins due to competition on price and product variety, leading to increased investments in digital capabilities and operational efficiencies [5] - There is a focus on expanding product assortments and enhancing online shopping experiences, with a notable increase in demand for personal care items and fitness-related products [6] - Digitization is crucial for growth, with retailers investing in digital platforms, delivery options, and store renovations to adapt to changing consumer behaviors [7] Industry Performance - The Zacks Retail – Miscellaneous industry ranks 193, placing it in the bottom 23% of over 250 Zacks industries, indicating bleak near-term prospects [8] - The industry has underperformed compared to the broader Retail – Wholesale sector and the S&P 500, with a 17.9% increase over the past year compared to 33.7% for the S&P 500 [10] Current Valuation - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 16.87X, lower than the S&P 500's 21.92X and the sector's 23.93X [11] Notable Companies - **Build-A-Bear Workshop**: Successfully diversifying its consumer base and enhancing customer engagement, with expected revenue growth of 1.2% and EPS growth of 8.8% [12] - **DICK'S Sporting Goods**: Strong omnichannel strategy and expected revenue growth of 2.1% and EPS growth of 7.7% [13] - **MarineMax**: Resilient performance with a focus on high-margin revenue streams, expecting revenue growth of 3.1% [14] - **BARK**: Positioned for growth with a focus on expanding product offerings, expecting revenue growth of 2% and EPS growth of 72.7% [16]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $116.2 million, exceeding the high end of the guidance range, marking a significant achievement for the company [5][14] - Consolidated gross margin reached a record high of 63%, a 250 basis point improvement year-over-year, indicating strong operational efficiency [6][16] - Adjusted EBITDA was a loss of $1.8 million, which is a $5.6 million improvement year-over-year, reflecting progress towards profitability [6][17] - Free cash flow was largely neutral at a $251,000 outflow, a notable improvement compared to a $13.5 million outflow in Q1 last year [17] Business Line Data and Key Metrics Changes - The Direct-to-Consumer (D2C) segment generated $107.1 million in revenue, showing resilience despite previous headwinds [14] - The Commerce segment delivered $9.2 million in revenue, a 5% increase year-over-year, driven by new product launches and expanded retail presence [15][16] - D2C gross margin improved by 230 basis points to 64.5%, while commerce gross margin improved by 680 basis points to 46.5%, showcasing effective cost management [16] Market Data and Key Metrics Changes - The company reported year-over-year growth in new BarkBox subscribers for the third consecutive quarter, indicating a positive trend in customer acquisition [5][14] - The commerce business saw over 5% year-over-year growth, particularly benefiting from marketplaces like Amazon and the recent launch of products on Chewy [5][15] Company Strategy and Development Direction - The company aims to accelerate top-line growth and achieve its first full year of positive adjusted EBITDA and free cash flow [5] - A new marketing strategy is being implemented, shifting focus from promotional ads to a more comprehensive brand proposition [8] - The launch of BARK Air has generated significant consumer interest and awareness, with plans to expand offerings based on demand [10][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing consumer pullback on discretionary spending but expressed confidence in the company's ability to execute better and capture market share [25][27] - The leadership team is optimistic about returning to growth in the D2C segment in the second half of fiscal 2025, supported by improved marketing strategies [14][26] - The company is reaffirming its full-year revenue guidance of $490 million to $500 million, indicating cautious optimism despite macroeconomic challenges [20] Other Important Information - The company has a strong balance sheet with $118 million in cash and plans to continue opportunistic share repurchases [11][17] - Inventory levels have improved, with a balance of $80 million, allowing for better working capital management [11][18] Q&A Session Summary Question: Changes in consumer behavior and potential recession impact - Management noted that while discretionary spending has been under pressure, they are seeing positive trends in new subscriber acquisition and believe they can outperform the category [25][26] Question: Key drivers behind new customer acquisition - The company is utilizing new marketing tactics, including AI for creative development, to enhance customer acquisition sustainably [28][29] Question: Gross margin expectations for Q2 - Management explained that Q2 gross margin is expected to be around 60% due to a higher mix of commerce sales, which typically have lower margins [32][34] Question: Development of the Chewy partnership - The partnership with Chewy has been strengthened recently, with plans to expand the product catalog significantly [35][36] Question: Subscriber growth and order trends - Management indicated that subscriber growth is expected to compound over time, with a turnaround anticipated in the next quarter [39][40] Question: Strength in Amazon sales - The recent leadership changes have positively impacted performance on Amazon, with expectations for further acceleration as tailored products are developed [47][48]

Financial Performance - Revenue for the three months ended June 30, 2024, was $116,212,000, a decrease of 3.4% compared to $120,591,000 for the same period in 2023[12] - Gross profit for the same period was $73,266,000, slightly up from $73,036,000 year-over-year[12] - Total operating expenses decreased to $83,858,000 from $87,040,000, reflecting a reduction of 3.9%[12] - The net loss for the three months ended June 30, 2024, was $10,039,000, compared to a net loss of $11,663,000 in the prior year, indicating an improvement of 14.0%[12] - The company reported a net loss per common share of $0.06 for the three months ended June 30, 2024, compared to a loss of $0.07 in the same period last year[12] - For the three months ended June 30, 2024, BARK, Inc. reported a net loss of $10,039,000, an improvement from a net loss of $11,663,000 for the same period in 2023, representing a reduction of approximately 14%[19] - The company generated net cash provided by operating activities of $1,792,000 for the three months ended June 30, 2024, compared to a net cash used in operating activities of $10,741,000 in the prior year, indicating a significant turnaround[19] - Adjusted net loss for the same period was $3,985,000, with an adjusted net loss margin of (3.43)%, compared to an adjusted net loss of $9,539,000 and a margin of (7.91)% in 2023[134] - Adjusted EBITDA for the three months ended June 30, 2024, was $(1,796,000), with an adjusted EBITDA margin of (1.55)%, compared to $(7,429,000) and (6.16)% in 2023, indicating a significant reduction in losses[137] Cash and Liquidity - Cash and cash equivalents as of June 30, 2024, were $117,795,000, down from $125,495,000 at the end of the previous quarter[10] - The total cash, cash equivalents, and restricted cash at the end of the period was $126,174,000, down from $169,136,000 a year earlier, representing a decline of approximately 25%[19] - The company expects its cash and cash equivalents will be sufficient to fund operations for at least the next twelve months despite recurring losses since inception[25] - As of June 30, 2024, the company held cash and cash equivalents of approximately $117.8 million, with $24.5 million in a money market account[166] - The company has a revolving line of credit with Western Alliance Bank of up to $35.0 million, with no outstanding borrowings as of June 30, 2024[150][154] Assets and Liabilities - Total assets decreased to $287,735,000 from $298,588,000, a decline of 3.6%[10] - Total liabilities remained relatively stable at $159,675,000 compared to $159,205,000 in the previous quarter[10] - Stockholders' equity decreased to $128,060,000 from $139,383,000, a reduction of 8.1%[10] - The Company had total long-term debt of $40.0 million as of June 30, 2024, compared to $39.9 million as of March 31, 2024[47] Revenue Segments - For the three months ended June 30, 2024, total revenue was $116.2 million, a decrease from $120.6 million for the same period in 2023, with Direct to Consumer revenue at $107.1 million[41] - For the three months ended June 30, 2024, the Direct to Consumer segment generated revenue of $111,887,000, with a gross profit of $69,583,000, resulting in a gross margin of 62.2%[90] - The Commerce segment reported revenue of $8,704,000 and a gross profit of $3,453,000, leading to a gross margin of 39.7%[90] - Direct to Consumer revenue decreased by $4.8 million, or 4.3%, for the three months ended June 30, 2024 compared to the same period in 2023, primarily due to a 3.3% decrease in Total Orders and a 1.6% decrease in Average Order Value (AOV)[117] - Commerce revenue increased by $0.4 million, or 5.2%, for the three months ended June 30, 2024, driven by sales volume from existing and new customers[118] Inventory and Capital Expenditures - Inventory decreased to $2,521,000 from $11,269,000 year-over-year, reflecting a reduction of approximately 78%[19] - Capital expenditures for the three months ended June 30, 2024, were $2,043,000, down from $2,972,000 in the same period of 2023, a decrease of about 31%[19] Operating Expenses - Total general and administrative expenses decreased by $6.0 million, or 8.6%, for the three months ended June 30, 2024, primarily due to lower shipping and fulfillment expenses and reduced headcount[122] - Advertising and marketing expenses increased by $2.8 million, or 16.0%, for the three months ended June 30, 2024, attributed to increased marketing spend[123] Risks and Challenges - The company is facing challenges in acquiring new customers cost-effectively and retaining existing customers, which could impact future growth[177] - The competitive landscape in the dog products and services retail industry is intense, with many competitors having greater resources and market presence, which could impact the company's market share and profitability[193] - Economic downturns and macroeconomic conditions negatively impact consumer discretionary spending, which is crucial for the company's revenue[184] - The company relies on a limited number of suppliers and manufacturers, which poses risks related to supply chain disruptions and potential delays in product delivery[186] - The complexities of omnichannel operations require effective management of inventory and fulfillment processes, with potential adverse effects if not managed properly[189] Legal and Compliance - The company is currently involved in a legal proceeding related to a putative class action complaint, which may have potential implications for its financial condition[171][172] - The company is subject to evolving privacy and data protection regulations, which may complicate compliance and increase operational costs[206] - Product safety regulations could lead to recalls or legal actions, impacting sales and increasing costs associated with customer service and legal expenses[208]

Revenue and Financial Performance - Total revenue for Q1 FY2025 was $116.2 million, exceeding the high-end of the Company's guidance range[2][6] - Direct to Consumer revenue decreased by 4.3% to $107.1 million, while Commerce revenue grew by 5.2% to $9.2 million[6] - For FY2025, the Company reaffirmed its revenue guidance of $490 million to $500 million, reflecting flat to 2.0% year-over-year growth[8] - Q2 FY2025 revenue is expected to be $123.0 million to $126.0 million, with Adjusted EBITDA of $1.0 million to $3.0 million[9] Profitability and Margins - Consolidated gross margin reached a record 63.0%, a 248 basis point increase year-over-year[2][6] - Adjusted EBITDA was $(1.8) million, a $5.6 million improvement year-over-year and ahead of guidance[2][6] - Adjusted EBITDA margin improved from (7.91)% to (3.43)%[33] - Adjusted EBITDA improved to $(1.796) million for the three months ended June 30, 2024, from $(7.429) million in the same period in 2023, reflecting a significant improvement in operational efficiency[34] - Adjusted EBITDA margin improved to (1.55)% for the three months ended June 30, 2024, from (6.16)% in the same period in 2023[34] Net Loss and Adjusted Net Loss - Net loss improved by 13.9% to $(10.0) million year-over-year[2][6] - Net loss improved from $(11.663) million to $(10.039) million[22] - Adjusted net loss improved from $(9.539) million to $(3.985) million[31] - Adjusted net loss margin improved from (7.91)% to (3.43)%[31] - Net loss for the three months ended June 30, 2024, was $10.039 million, compared to $11.663 million in the same period in 2023, showing a reduction in net loss[34] - Net loss margin decreased to (8.64)% for the three months ended June 30, 2024, from (9.67)% in the same period in 2023[34] Cash Flow and Capital Expenditures - The Company's cash and cash equivalents balance as of June 30, 2024 was $117.8 million, with $4.3 million spent on share repurchases[7] - Cash and cash equivalents decreased from $125.495 million to $117.795 million[21] - Net cash provided by operating activities improved from $(10.741) million to $1.792 million[22] - Capital expenditures decreased from $(2.972) million to $(2.043) million[22] - Free cash flow was $(251) thousand for the three months ended June 30, 2024, compared to $(13.713) million in the same period in 2023, indicating a substantial improvement in cash flow management[38] - Capital expenditures decreased to $2.043 million for the three months ended June 30, 2024, from $2.972 million in the same period in 2023[38] Inventory and Accounts Receivable - Inventory balance decreased by $31.6 million year-over-year to $80.4 million[7] - Inventory increased from $80.428 million to $84.177 million[21] - Accounts receivable decreased from $7.696 million to $7.058 million[21] Stock-Based Compensation and Other Expenses - Stock-based compensation expense decreased from $3.225 million to $2.941 million[31] - Technology Modernization costs for the three months ended June 30, 2024, were $707 thousand, related to a one-time unification of product offerings on the new commerce platform[35] - Litigation expenses for the three months ended June 30, 2024, were $387 thousand, related to a shareholder class action complaint[35] - Other items for the three months ended June 30, 2024, included $0.2 million in non-recurring retention payments to management and $0.4 million in executive transition costs[36] Sales and Use Tax - Sales and use tax income for the three months ended June 30, 2024, was $(1.303) million, reflecting changes in tax collection obligations following the South Dakota v. Wayfair, Inc. decision[34]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Investors following momentum investing often avoid undervalued stocks, believing that quicker profits can be made from trending stocks [1] - Identifying the right entry point for fast-moving stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] Group 2: BARK Inc. as a Momentum Stock - BARK Inc. (BARK) has shown a price increase of 3.4% over the past four weeks, indicating growing investor interest [2] - The stock has gained 37.3% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [3] - BARK has a beta of 1.7, suggesting it moves 70% more than the market in either direction, indicating fast-paced momentum [3] Group 3: Earnings Estimates and Valuation - BARK has a Momentum Score of B, suggesting it is a favorable time to invest in the stock [3] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investors [4] - BARK is trading at a Price-to-Sales ratio of 0.55, indicating it is relatively cheap at 55 cents for each dollar of sales [4] Group 4: Additional Investment Opportunities - Besides BARK, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, which may present additional investment opportunities [5] - The Zacks Premium Screens offer over 45 strategies to help identify potential winning stocks based on various investing styles [5]

The Retail-Wholesale group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. BARK Inc. (BARK) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.BARK Inc. is one of 210 companies in the Retail-Wholesale group. The Retail-Wholesale group currently sits at #11 within the Zacks Secto ...

BARK Inc. (BARK) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.Individual inve ...

Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potential fails to justify their swelled-up valuation. In that phase ...

Financial Data and Key Metrics Changes - Total fourth quarter revenue was $121.5 million, down 3.6% year-over-year, while total revenue for the year was $490.2 million, down 8.4% [24][25] - Gross margin improved by 580 basis points in the fourth quarter to 62.7%, with a full-year gross margin increase of 410 basis points to 61.6% [10][26] - Adjusted EBITDA for the fourth quarter was $2.2 million, a $5.7 million improvement year-over-year, while the full-year adjusted EBITDA was negative $10.6 million, reflecting a nearly $21 million improvement compared to last year [30][31] Business Line Data and Key Metrics Changes - Direct-to-consumer revenue was $109.3 million, down 5.9% year-over-year, primarily due to carrying fewer total box subscriptions [24] - Total commerce revenue was $12.1 million, up 21% year-over-year, driven by new treat lines in Target and PetSmart [25] - Consumables revenue, excluding subscription boxes, grew nearly 30% to $20 million in fiscal 2024 [25] Market Data and Key Metrics Changes - The toy industry in retail for dogs was down 10% year-over-year according to Nielsen data, while BARK's toy sales were only down 1.5% [39] - Total shipments in the quarter declined 3.3% to 3.5 million, with average order value down roughly 2.5% to $31.25 [24] Company Strategy and Development Direction - The company aims to transition from being perceived solely as a subscription box company to a broader emotional experience provider for dog owners [12] - New leadership additions are expected to drive growth, with a focus on expanding the commerce channel from 11% to one-third of revenue over the next five years [9] - The launch of BARK Air is seen as a significant growth opportunity, with over $1 million in bookings before the first flight [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing softness in discretionary categories but sees potential positive signals in the market [39] - The company is guiding for its first EBITDA positive year in fiscal 2025, with total revenue expected to be flat to low single-digit growth [19][33] - Management emphasizes the importance of patience as new hires and strategies take time to yield results [40] Other Important Information - The company ended the year with $125 million in cash and a strong balance sheet, allowing for continued investments in growth and share repurchases [31][21] - The unified platform transition is expected to enhance marketing efficiency and cross-selling opportunities [60][62] Q&A Session Summary Question: Continued softness in discretionary categories - Management is monitoring macro trends and sees some positive signals but remains cautious about an industry turnaround [39] Question: Revenue and EBITDA seasonality - EBITDA performance is expected to follow a similar cadence to fiscal 2024, with Q3 being the strongest quarter due to the holiday season [42] Question: EBITDA guidance and free cash flow - EBITDA is expected to be a good proxy for free cash flow, indicating a positive outlook for fiscal 2025 [46] Question: Incremental contribution from new retail opportunities - Management is optimistic about the potential growth from new retail partnerships but emphasizes the need for time to see results [48] Question: Marketing spend performance - Marketing spend in Q4 showed healthy ROI, with a significant increase in new subscriber acquisition [53] Question: Inventory levels and DTC growth - Inventory levels have been managed down to healthy levels, with further modest improvements expected [57] Question: Unified platform benefits - The unified platform is expected to enhance marketing effectiveness and provide cross-selling opportunities [60][62] Question: BARK Air progress and future services - The response to BARK Air has exceeded expectations, and while there are ideas for future services, the focus remains on perfecting the current offering [64]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39691 | --- | --- | |--------------------------------------------------------|---------------------------------------| | | | | (Exact nam ...