Executive Summary

Q3 2023 was operationally consistent with Q2 as Kidpik prioritized inventory sell-through and cost control while maintaining gross margin at 61.1% amid softer demand; revenue declined 6.7% YoY to $3.39M and EPS improved to ($0.24) from ($0.32) YoY .
Channel mix continued to shift toward owned e-commerce (online sales +58.3% YoY) while subscription revenue fell 15.4% YoY; average keep rate rose sharply to 82.6% and shipped items fell to 292k .
Management initiated a formal review of strategic alternatives and is reducing expenses, selling down inventory, and undertaking workforce reductions—potential near-term stock catalysts given the breadth of options (including business combinations or asset sales) .
No formal quantitative guidance or S&P Global consensus estimates were available for Q3, limiting beat/miss analysis; management emphasized liquidity preservation (quarter-end cash ~$0.06M) and working capital support from inventory liquidation .

What Went Well and What Went Wrong

What Went Well
- Elevated gross margin and mix improvements: GM expanded 80 bps YoY to 61.1%, with online website sales +58.3% YoY; keep rate rose to 82.6% suggesting better curation/mix .
- Cost progress and loss reduction: Net loss narrowed to ($1.93M) vs ($2.44M) YoY; Adjusted EBITDA loss improved to ($1.61M) vs ($2.10M) YoY .
- Clear strategic posture: Management launched a strategic alternatives review while focusing on expense reductions and inventory monetization, underscoring action-oriented approach in a tough macro .
- Quote: “During the 3rd quarter, we continued to execute our plan to reduce inventory levels while maintaining our gross margin of about 61%.” – CEO Ezra Dabah .
What Went Wrong
- Top-line pressure: Revenue declined 6.7% YoY to $3.39M, driven by a 15.4% decline in subscription boxes; shipped items fell 18% YoY to 292k .
- Customer acquisition headwinds: Higher CAC tied to changes in cookie-tracking technologies pressured growth; management highlighted spending pullbacks in discretionary apparel .
- Liquidity tightness: Cash ended Q3 at ~$60k; although working capital totaled $4.6M, the low cash balance raises near-term financing/execution risk .

Financial Results

Metric	Q3 2022	Q1 2023	Q2 2023	Q3 2023
Revenue ($USD Millions)	$3.63	$4.03	$3.45	$3.39
Gross Margin (%)	60.3%	59.8%	60.2%	61.1%
Net Loss ($USD Millions)	($2.44)	($1.95)	($2.03)	($1.93)
Diluted EPS ($)	($0.32)	($0.25)	($0.26)	($0.24)
Adjusted EBITDA ($USD Millions)	($2.10)	($1.65)	($1.70)	($1.61)
Versus S&P Global Consensus	N/A	N/A	N/A	N/A

Notes: Management on the Q3 call cited a 7.4% YoY revenue decline, versus 6.7% reported in the 8-K; the 8-K values are used above . The call also referenced “keep rate for the second quarter was 82.6%” during the Q3 discussion—keep rate for Q3 per the 8-K is 82.6% .

Segment – Revenue by Channel ($USD Millions)

Channel	Q1 2023	Q2 2023	Q3 2023
Subscription Boxes	$2.97	$2.61	$2.43
3rd Party Websites	$0.44	$0.43	$0.49
Online Website Sales	$0.62	$0.41	$0.47
Total	$4.03	$3.45	$3.39

Segment – Revenue by Product Line ($USD Millions)

Product Line	Q1 2023	Q2 2023	Q3 2023
Girls’ Apparel	$3.05	$2.64	$2.60
Boys’ Apparel	$0.79	$0.64	$0.64
Toddlers’ Apparel	$0.19	$0.17	$0.15
Total	$4.03	$3.45	$3.39

Subscription Boxes – Recurring vs New ($USD Millions)

Subscription Type	Q1 2023	Q2 2023	Q3 2023
Recurring Boxes	$2.40	$2.18	$1.97
New Subscriptions – First Box	$0.57	$0.43	$0.46
Total Subscriptions	$2.97	$2.61	$2.43

KPIs

KPI	Q1 2023	Q2 2023	Q3 2023
Shipped Items (000s)	340	290	292
Average Keep Rate (%)	68.1%	75.1%	82.6%

Liquidity Snapshot

Cash at quarter-end: ~$0.27M (Q1), ~$0.16M (Q2), ~$0.06M (Q3) .
Working capital: $6.6M (Q1), $4.9M (Q2), $4.6M (Q3) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q4 2023	None	None provided	N/A
Gross Margin	FY/Q4 2023	None	None provided	N/A
Operating Expenses	FY/Q4 2023	None	Company “working to reduce expenses and overhead”	New qualitative action
Strategic Actions	Near-term	None	Formal review of strategic alternatives initiated	New

No formal numerical guidance was issued in Q3 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Inventory & Cost Discipline	Q1: Reduced inventory by $1.5M; focused on cash flow and efficiency . Q2: Continued focus on reducing inventory purchases .	Continued reduced purchases; increase sales from elevated inventory to support cash flow .	Consistent execution; ongoing inventory monetization.
Gross Margin	~60% GM in Q1 (59.8%) and Q2 (60.2%) .	GM 61.1% (+80 bps YoY) .	Slight expansion with stable pricing/mix.
Demand/Macro	Limited explicit macro commentary in Q1/Q2; emphasis on channels/mix .	Noted pullback in discretionary spend; higher CAC due to cookie changes .	Macro headwinds intensifying; marketing efficiency challenged.
E-commerce & Direct	Q1: Online sales +112% YoY . Q2: Shop sales +72% YoY; UX/brand elevation .	Pushing proprietary brand via own site; launched holiday website .	Continued push to owned DTC to offset subscription softness.
Strategic Alternatives	Not discussed in Q1/Q2.	Formal review process initiated (including potential combinations/asset sales) .	New development; potential catalyst.
Subscriber Behavior	Keep rate improved in Q2 (75.1%) .	Keep rate 82.6%; shipped items down YoY .	Quality of keeps rising; volumes lower.

Management Commentary

Strategic focus: “Reduce expenses and overhead, sell off inventory, and workforce reduction… initiate a formal review process to evaluate strategic alternatives” .
Operations cadence: “Our third quarter results were, for the most part, consistent with our second quarter results.” .
Margin and inventory: “Continued to execute our plan to reduce inventory levels while maintaining our gross margin of about 61%.” .
Channel priorities: “Working to increase our proprietary brand sales through our own e-commerce site… newly launched holiday website” ; “revamped websites… added new UX convenient features” .

Q&A Highlights

The available Q3 transcript contains prepared remarks from management; a Q&A section was not included in the retrieved content .

Estimates Context

S&P Global (Capital IQ) Wall Street consensus estimates for revenue/EPS were unavailable for PIK for Q3 2023 and prior quarters via our tool, so we cannot determine beat/miss versus consensus. As a result, no estimate comparison is provided.

Key Takeaways for Investors

Strategic review introduces optionality; any transaction update could be a stock catalyst in the near term .
Core subscription revenue remains pressured, but higher keep rates and owned-site growth point to healthier unit economics on retained demand .
Liquidity is tight (cash ~$0.06M at quarter-end); execution on inventory monetization, expense reductions, and potential financing remains critical .
Gross margin resilience (61.1%) amidst softer volumes supports the thesis that merchandising/curation and channel mix are offsetting some demand headwinds .
Customer acquisition is challenged by changes in cookie tracking; shifting spend toward owned channels and UX improvements is strategically sound but may take time to scale .
Near-term, results likely track operational self-help (inventory sell-through, cost cuts) more than top-line acceleration; watch subscription trends and owned-site momentum over holiday .
No guidance and no consensus estimates heighten uncertainty; keep focus on cash runway, working capital execution, and any developments from the strategic alternatives process .

KIDPIK CORP. (PIK)·Q3 2023 Earnings Summary