The Original BARK Company, a leading global omnichannel brand for dogs and their parents, announces financial results for the fiscal quarter ended June 30, 2021.
· Quarterly subscription shipments increased 52.4% to 3.6 million, year-over-year.
· Delivered fiscal first quarter 2022 revenue of $117.6 million, a 57.2% increase year-over-year.
· Maintained robust gross margin of 59.3%.
· Add-to-Box revenue contributed $7.0 million of quarterly revenue, up 173.5%, versus fiscal Q1 2021.
· BARK reaffirms fiscal year 2022 guidance, including $516 million of total revenue.
· Continued to invest in BARK Eats, machine learning technology, and fulfillment infrastructure.
"We are extremely pleased with our strong start to fiscal year 2022. During the quarter, we increased subscription shipments 52% year-over-year, continued to optimize our add-to-box feature across our suite of products, and partnered with iconic brands such as Warner Bros. and The NBA," said Manish Joneja, Chief Executive Officer of BARK. "We continue to believe our unique value proposition—from our world-class Happy and Creative teams to our machine learning capabilities—will have a halo effect on our newer, less discretionary categories such as health and food."
Total revenue increased 57.2% to $117.6 million in the first quarter of fiscal year 2022 as compared to $74.8 million in the first quarter of fiscal year 2021.
· Direct to Consumer (“DTC”) revenue increased 57.0% to $105.4 million in the first quarter of fiscal year 2022 as compared to the same quarter of fiscal year 2021. The growth in DTC revenue was driven by an increase in Subscription Shipments, Average Order Value (“AOV”), and Add-to-Box revenue.
· Commerce revenue increased 58.7% to $12.2 million in the first quarter of fiscal year 2022 as compared to the first quarter of fiscal year 2021. This growth was driven by increases in both the number of retailers we partnered with including Lowes, as well as volume increases amongst existing retailer partners, which include Target, Petco, PetSmart, and Costco, among others.
Gross profit was $69.8 million in the first quarter of fiscal year 2022 up from $46.9 million in the first quarter of fiscal year 2021. Gross margin was 59.3% in the first quarter of fiscal year 2022 compared to 62.7% in the first quarter of fiscal year 2021. The decrease in gross margin in the first quarter of fiscal year 2022 was primarily due to higher inbound freight costs as a result of worldwide shipping congestion and is inline with our December guidance.
General and administrative expenses increased 116.9% to $69.5 million in the first quarter of fiscal year 2022 from $32.0 million in the first quarter of fiscal year 2021. The increase was due primarily to the growth of active subscriptions, resulting in a 52.4% increase in subscription shipments. Furthermore, we incurred $5.2 million of non-recurring transaction costs. In addition, the company is investing in its new business lines by increasing the staff dedicated to BARK Eats and BARK Bright. Finally, domestic shipping rates have increased on a year-over-year basis.
Advertising and marketing expenses increased 48.4% to $17.2 million in the first quarter of fiscal year 2022 from $11.6 million in the first quarter of fiscal year 2021. This increase was primarily due to the year-over-year increase in Customer Acquisition Costs (CAC) as media rates return to pre-COVID levels in comparison with the reduced media rates in the first quarter of fiscal year 2021, stemming from the onset of the COVID-19 pandemic. CAC was $48.36 in the most recent fiscal quarter, compared to $30.83 in the same period last year. On a sequential basis, CAC decreased 6.0% compared to the fourth quarter of fiscal year 2021. Our Lifetime Value to CAC was a healthy 5.0x in the first quarter of fiscal year 2022.
Adjusted EBITDA was $(7.6) million, with Adjusted EBITDA margin of -6.5%, in the first quarter of fiscal year 2022, as compared to Adjusted EBITDA of $5.0 million and Adjusted EBITDA margin of 6.7%, in the first quarter of fiscal year 2021. Fiscal year 2022 is deliberately an investment year for BARK; the company is strategically investing in several key areas such as its highly-personalized kibble business, BARK Eats, as well as self-managed fulfillment assets. Last year, with disciplined marketing spend and lower investment in new businesses, BARK was net income positive, which BARK believes demonstrates the strength of the business model and the company's ability to profitably scale the business.
Based on information available as of August 9, 2021, BARK is issuing guidance for the fiscal second quarter 2022 and reaffirming guidance for fiscal full year 2022 as follows:
· For fiscal second quarter 2022, the Company expects total revenue of $122 million.
· For fiscal full year 2022, the Company reaffirms its forecast included in the investor presentation furnished as an exhibit to Northern Star’s Current Report on Form 8-K filed December 17, 2020, which included total revenue of $516 million. This forecast can also be found on the Company's investor relations website.
Conference Call Information
A conference call to discuss first quarter fiscal year 2022 results will be held today, August 9, 2021, at 4:30 p.m. ET. During the conference call, the Company may make comments concerning business and financial developments, trends and other business or financial matters. The Company's comments, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed.
Those who wish to participate in the call may do so by dialing (866) 465-0807 or (639) 716-2121 for international callers, conference ID 6197976. The conference call will also be available to interested parties through a live webcast at https://investors.bark.co/. A recording will be available for 12 months after the date of the event. Recordings may be accessed at https://investors.bark.co/.
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