KIDPIK CORP. (PIK)·Q2 2024 Earnings Summary

Executive Summary

• Revenue fell 67.3% year over year to $1.13M with gross margin at 66.2%; management eliminated subscription marketing and ceased new inventory purchases while clearing existing stock ahead of the Nina Footwear merger .
• Sequentially, revenue declined from $2.24M in Q1 to $1.13M in Q2 as shipped items dropped to 135K; net loss improved to $(1.30)M and EPS to $(0.67) on lower operating expenses .
• Liquidity remains constrained: quarter-end cash was $34K with stockholders’ deficit of $(1.58)M and current liabilities of $6.61M; the company issued up to $2.0M of convertible debentures in Q2, implying potential dilution and amortization/payment obligations .
• Merger closing guidance slipped from “Q3 2024” to “Q4 2024”; no earnings call was held, and Wall Street consensus estimates from S&P Global were unavailable for comparison .

What Went Well and What Went Wrong

• What Went Well

  • Gross margin improved to 66.2% (vs. 60.2% YoY), aided by the Q4 2023 inventory write-down; management noted margin would have been 60.7% absent the write-down .
  • Net loss narrowed to $(1.30)M from $(2.03)M YoY and operating loss improved to $(1.29)M, reflecting reduced shipping, payroll, and G&A during the pivot to merger integration .
  • Clear strategic focus: “we have eliminated marketing expenditures for subscription services and ceased the purchase of new inventory as we are working to clear and maximize the return on our current inventory in anticipation of the combination with Nina Footwear” (CEO Ezra Dabah) .

• What Went Wrong

  • Top-line contraction: revenue down 67.3% YoY to $1.13M as subscription boxes, third-party websites, and own-site sales all declined materially .
  • Demand/volume pressure: shipped items fell to 135K vs. 290K YoY; keep rates slipped to 74.6% vs. 75.1% YoY, implying lower throughput and slightly weaker conversion .
  • Liquidity and solvency concerns: cash of $34K, stockholders’ deficit $(1.58)M, and current liabilities $6.61M; reliance on high-cost convertible debentures with exchange cap constraints and amortization triggers raises financing and dilution risks .

Financial Results

Headline financials vs prior quarters and YoY

Segment/channel revenue

Subscription revenue detail

Product line revenue

KPIs

Balance sheet/liquidity highlights

Note: The company executed a Securities Purchase Agreement for up to $2.0M of convertible debentures during Q2 2024, introducing potential dilution and amortization/payment terms (including exchange cap of 390,132 shares) .

Estimates vs Actuals

S&P Global consensus estimates for Q2 2024 EPS and revenue were unavailable for PIK; therefore, no estimate comparison is provided.

Guidance Changes

Earnings Call Themes & Trends

Note: No Q2 2024 earnings call transcript was available; the company did not hold a call .

Management Commentary

• “We have eliminated marketing expenditures for subscription services and ceased the purchase of new inventory as we are working to clear and maximize the return on our current inventory in anticipation of the combination with Nina Footwear” — Ezra Dabah, CEO .
• “We and Nina Footwear remain committed to closing the Merger... expected to close in the fourth quarter of 2024” — Ezra Dabah, CEO .
• Prior period context: “we... ceased purchasing new inventory and are working to clear current inventory in anticipation of the combination with Nina Footwear... expected to close in the third quarter of 2024” — Ezra Dabah, CEO (Q1 release) .
• Q4 context: continued execution to reduce inventory, cessation of new inventory purchases in late 2023 to position for merger .

Q&A Highlights

No earnings call or Q&A session was held for Q2 2024 .

Estimates Context

• S&P Global consensus estimates for Q2 2024 EPS and revenue were unavailable for PIK; comparison to Street expectations is not possible for this quarter.
• Implication: Absent formal coverage, estimate revisions and beat/miss signaling will not serve as catalysts; narrative and merger milestones may dominate stock reaction.

Key Takeaways for Investors

• Severe top-line contraction: revenue down 67.3% YoY to $1.13M; subscription, marketplace, and DTC channels all declined materially .
• Margins look optically strong (66.2%) due to prior inventory write-down; underlying gross margin would be ~60.7% without the Q4 2023 adjustment, tempering margin optimism .
• Liquidity stress: cash $34K, stockholders’ deficit $(1.58)M, and current liabilities $6.61M; financing via convertible debentures suggests dilution risk and cash flow obligations (amortization/payment triggers) .
• Demand generation retrenchment: eliminated subscription marketing and ceased new inventory purchasing may further pressure near-term revenue and shipped items while improving inventory monetization .
• Merger timeline slip to Q4 2024; closing remains the principal strategic catalyst for revenue mix shift, cash flow potential, and listing status considerations .
• No call and no formal guidance: trading likely keyed to operational updates (inventory clearance, financing developments) and merger milestones rather than EPS/revenue beats/misses .
• Near-term stance: risk-aware; monitor covenant triggers, exchange cap constraints, and dilution mechanics in the debenture terms (e.g., floor price, amortization events) for capital structure implications .