Executive Summary

Q1 2024 revenue was $2.24M, down 44.4% YoY and down sequentially from $3.37M in Q4 2023; GAAP gross margin was 69.9% (benefiting from Q4’s inventory write‑down; underlying gross margin would have been 53.5%) .
Net loss was $1.77M (−$0.94 per share) vs −$1.95M (−$1.27) YoY and vs −$4.00M (−$2.14) in Q4 2023; Adjusted EBITDA loss improved to −$1.39M from −$1.65M YoY and −$3.90M in Q4 2023 .
Management ceased purchasing new inventory and is clearing current inventory while progressing toward the Nina Footwear merger, expected to close in Q3 2024; no earnings call was held for Q1 2024 .
Wall Street consensus (S&P Global) for Q1 2024 was unavailable in our feed; therefore, no beat/miss assessment is provided.*

What Went Well and What Went Wrong

What Went Well
- Gross margin expanded YoY to 69.9% (vs 59.8%) as Q4’s inventory write‑down reduced cost basis; underlying Q1 gross margin would have been 53.5% absent the write‑down .
- Keep rate improved to 78.2% vs 68.1% YoY, supporting better unit economics despite lower volume .
- Adjusted EBITDA loss narrowed to −$1.39M vs −$1.65M YoY and improved sharply vs −$3.90M in Q4 2023 .
- CEO on strategic direction: “we have ceased the purchase of new inventory and are working to clear current inventory in anticipation of the combination with Nina Footwear” and “remain committed to closing the Merger… expected to close in the third quarter of 2024” .
What Went Wrong
- Revenue fell 44.4% YoY to $2.24M, with subscription boxes −49.0% YoY; shipped items declined to 195k from 340k YoY, highlighting traffic/volume pressure .
- Liquidity and balance sheet tightened: cash was $10k (restricted cash $5k), current assets $5.0M vs current liabilities $5.79M; stockholders’ equity swung to a $(0.40)M deficit at quarter‑end .
- Sequential top‑line contraction (Q4→Q1) from $3.37M to $2.24M, with lower subscription and marketplace revenue, and no formal guidance or earnings call amid merger process .

Financial Results

Headline financials and KPIs

Metric	Q1 2023	Q3 2023	Q4 2023	Q1 2024
Revenue ($USD)	$4.03M	$3.39M	$3.37M	$2.24M
Gross Margin % (GAAP)	59.8%	61.1%	−16.2% (incl. $2.9M write‑down)	69.9%
EPS (Diluted)	−$1.27	−$0.24	−$2.14	−$0.94
Adjusted EBITDA ($USD)	−$1.65M	−$1.61M	−$3.90M	−$1.39M
Shipped Items (k)	340	292	285	195
Average Keep Rate %	68.1%	82.6%	66.2%	78.2%

Notes: Q4 2023 gross margin would have been 69.5% absent the inventory write‑down; Q1 2024 underlying gross margin would have been 53.5% absent the Q4 cost basis impact .

Revenue by channel

Channel	Q1 2023	Q4 2023	Q1 2024
Subscription boxes ($)	$2,971,567	$2,421,594	$1,516,665
Third‑party websites ($)	$436,298	$416,545	$258,900
Online website sales ($)	$621,613	$535,005	$463,740
Total Revenue ($)	$4,029,478	$3,373,144	$2,239,305

Revenue by product line

Product	Q1 2023	Q4 2023	Q1 2024
Girls’ apparel ($)	$3,047,756	$2,559,807	$1,675,217
Boys’ apparel ($)	$787,159	$690,717	$486,995
Toddlers’ apparel ($)	$194,563	$122,620	$77,093
Total Revenue ($)	$4,029,478	$3,373,144	$2,239,305

Balance sheet snapshot (select items)

Metric	Q4 2023	Q1 2024
Cash ($)	$194,515	$10,354
Restricted Cash ($)	$4,618	$4,618
Inventory ($)	$4,854,641	$4,181,100
Current Assets ($)	$6,027,482	$4,988,782
Current Liabilities ($)	$5,299,936	$5,789,870
Stockholders’ (Deficit) Equity ($)	$1,036,834	$(398,723)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Financial guidance (revenue, margins, EPS)	Q1 2024 and FY24	None provided	None provided; no earnings call held	Maintained (no guidance)
Inventory purchasing stance	2H23–Q1 2024	Ceased purchasing new inventory	Continuing to cease purchases; clearing inventory	Maintained
Merger timing (Nina Footwear)	2024	Expected close in Q3 2024	Expected close in Q3 2024	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023)	Q4 2023	Current Period (Q1 2024)	Trend
Macro/consumer demand	Inflation/interest rates pressured discretionary spend	Continued weak consumer; inventory reduction plan	No call; environment remains cautious by implication of actions	Worsening to Stable
Inventory strategy	Substantially reduced new purchases; sell down elevated inventory	Ceased purchasing new inventory	Continuing to cease purchases; clearing inventory	Consistent
Customer acquisition/CAC	Higher CAC due to cookie‑tracking changes	Noted ongoing marketing challenges (context)	No update on CAC; no call	Unclear
Channel mix (own site/3P)	Expanding proprietary brand via own site/3P	Emphasis on e‑commerce/3P continues	Subscription and 3P both down sequentially and YoY	Slightly Negative
Strategic alternatives / M&A	Initiated formal review incl. combinations/sale	Executed merger agreement with Nina Footwear	Advancing to close in Q3 2024; proxy to be filed	Positive (execution)
Gross margin dynamics	61.1% in Q3	−16.2% GAAP due to $2.9M write‑down; underlying 69.5%	69.9% GAAP; underlying 53.5% excluding Q4 effect	Normalizing

Management Commentary

“On March 29, 2024, we entered into an Agreement and Plan of Merger… whereby Nina Footwear will merge with and into Merger Sub… While we work towards closing the Merger, we have ceased the purchase of new inventory and are working to clear current inventory” — Ezra Dabah, CEO .
“We and Nina Footwear remain committed to closing the Merger… expected to close in the third quarter of 2024” — Ezra Dabah, CEO .
“During the 4th quarter of 2023, we continued to execute our plan to reduce inventory levels, and ceased purchasing new inventory” — Ezra Dabah, CEO .

Q&A Highlights

No Q1 2024 earnings call or Q&A was held as the company moves forward with the merger .

Estimates Context

We attempted to source S&P Global (Capital IQ) Wall Street consensus for Q1 2024; consensus was not available in our SPGI feed for PIK, so no estimate comparison is included.*
Implication: Absent formal coverage, estimate revisions are not a near‑term catalyst; stock narrative likely driven by merger milestones and liquidity developments .

Key Takeaways for Investors

Top‑line under pressure: revenue fell 44% YoY and sequentially, with subscription boxes −49% YoY; unit volumes declined materially, partially offset by better keep rates .
Margin normalization: GAAP gross margin rebounded from Q4’s write‑down to 69.9%, but underlying Q1 run‑rate gross margin would have been ~53.5%, indicating margin pressure if inventory write‑downs are excluded .
Liquidity tightness and equity deficit: cash of ~$10k, current liabilities above current assets, and a stockholders’ equity deficit at quarter‑end heighten financing risk and sensitivity to merger execution .
Strategic pivot continues: halted inventory buys and inventory clearance should conserve cash but will constrain near‑term revenue until post‑merger strategy resets assortment and growth initiatives .
Primary catalysts: merger proxy filing and shareholder approvals, any updates on close timing (targeting Q3 2024), and evidence of working capital relief or new financing .
Trading setup: absent consensus estimates and with no guidance/call, shares may trade on merger progress headlines and balance‑sheet developments rather than quarterly fundamentals .
Watch KPIs: subscription revenue trajectory, keep rate durability, and channel mix recovery on own site/marketplaces as inventory levels normalize .

*Estimates note: S&P Global consensus data for PIK Q1 2024 was unavailable via our SPGI data connection at the time of this analysis.

KIDPIK CORP. (PIK)·Q1 2024 Earnings Summary