Kidpik Corp. (“KIDPIK” or the “Company”), an online clothing
subscription-based e-commerce company, today reported its financial
results for the second quarter 2024 ended June 29, 2024.
Second Quarter 2024
Highlights:
- Revenue, net: was $1.1 million, a year-over-year
decrease of 67.3%.
- Gross margin: was 66.2%, compared to 60.2% in the second
quarter of 2023.
- Shipped items: were 135,000 items, compared to 290,000
shipped items in the second quarter of 2023.
- Average shipment keep rate: decreased to 74.6%, compared
to 75.1% in the second quarter of 2023.
- Net Loss: was $1.3 million or $0.67 per share, compared
to $2.0 million or $1.31 per share in the second quarter of
2023.
“As previously disclosed, on March 29, 2024, we entered into an
Agreement and Plan of Merger and Reorganization (the “Merger
Agreement”) with Nina Footwear Corp., a Delaware corporation (“Nina
Footwear”), and Kidpik Merger Sub, Inc., a Delaware corporation and
wholly-owned subsidiary of Kidpik (“Merger Sub”), whereby Nina
Footwear will merge with and into Merger Sub, with Nina Footwear
continuing as the surviving entity trading, trading on Nasdaq under
the new symbol – ‘NINA’, upon closing (the “Merger”). While we work
towards closing the Merger, 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,” stated Mr. Ezra Dabah, the Company’s Chief Executive
Officer.
“We and Nina Footwear remain committed to closing the Merger, a
transaction which we believe will increase Kidpik’s revenue,
cashflow and prospects, while also strengthening Kidpik’s balance
sheet and significantly increasing stockholder value, said Mr.
Dabah.”
The closing of the Merger is subject to customary closing
conditions, including the preparation and mailing of a proxy
statement by Kidpik, and the receipt of required stockholder
approvals from Kidpik and Nina Footwear stockholders, and is
expected to close in the fourth quarter of 2024.
Kidpik will not be holding an earnings call to discuss second
quarter 2024 results, as the Company continues to move forward with
the Merger.
About Kidpik Corp.
Founded in 2016, KIDPIK (Nasdaq:PIK) is an online clothing
subscription box for kids, offering mix & match, expertly
styled outfits that are curated based on each member’s style
preferences. KIDPIK delivers a surprise box monthly or seasonally,
providing an effortless shopping experience for parents and a fun
discovery for kids. Each seasonal collection is designed in-house
by a team with decades of experience designing childrenswear.
KIDPIK combines the expertise of fashion stylists with proprietary
data and technology to translate kids’ unique style preferences
into surprise boxes of curated outfits. We also sell our branded
clothing and footwear through our e-commerce website,
shop.kidpik.com. For more information, visit www.kidpik.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release regarding
matters that are not historical facts, are forward-looking
statements within the meaning of Section 21E of the Securities and
Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995 (the “PSLRA”). These include, but are
not limited to, statements regarding the anticipated completion,
timing and effects of the proposed Merger, projections and
estimates of Kidpik’s corporate strategies, future operations and
plans, including the costs thereof; and other statements regarding
management’s intentions, plans, beliefs, expectations or forecasts
for the future. No forward-looking statement can be guaranteed, and
actual results may differ materially from those projected. Kidpik
and Nina Footwear undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise, except to the extent required by law.
We use words such as “anticipates,” “believes,” “plans,” “expects,”
“projects,” “future,” “intends,” “may,” “will,” “should,” “could,”
“estimates,” “predicts,” “potential,” “continue,” “guidance,” and
similar expressions to identify these forward-looking statements
that are intended to be covered by the safe-harbor provisions of
the PSLRA. Such forward-looking statements are based on our
expectations and involve risks and uncertainties; consequently,
actual results may differ materially from those expressed or
implied in the statements due to a number of factors, including,
but not limited to, the outcome of any legal proceedings that may
be instituted against Nina Footwear or Kidpik following the
announcement of the Merger; the inability to complete the Merger,
including due to the failure to obtain approval of the stockholders
of Kidpik or Nina Footwear; delays in obtaining, adverse conditions
contained in, or the inability to obtain necessary regulatory
approvals or complete regular reviews required to complete the
Merger, if any; the inability to recognize the anticipated benefits
of the Merger, which may be affected by, among other things,
competition, the ability of the combined company to grow and
successfully execute on its business plan; costs related to the
Merger; the timing to complete the Merger; changes in the
applicable laws or regulations; the possibility that the combined
company may be adversely affected by other economic, business,
and/or competitive factors; the combined company’s ability to
manage future growth; the combined company’s ability to raise
funding; the complexity of numerous regulatory and legal
requirements that the combined company needs to comply with to
operate its business; the reliance on the combined company’s
management; the prior experience and successes of the combined
company’s management team are not indicative of any future success;
Kidpik’s and the combined company’s ability to meet Nasdaq’s
continued listing requirements, including the fact that Kidpik is
not currently in compliance with Nasdaq’s continued listing
standards; Kidpik and the combined company’s ability to maintain
the listing of their common stock on Nasdaq; the ability to obtain
additional funding, the terms of such funding and potential
dilution caused thereby; the continuing effect of rising interest
rates and inflation on Kidpik’s and the combined company’s
operations, sales, and market for their products; deterioration of
the global economic environment; rising interest rates and
inflation and Kidpik’s and the combined company’s ability to
control costs, including employee wages and benefits and other
operating expenses; Kidpik’s decision to cease purchasing new
products; Kidpik’s history of losses; Kidpik’s and the combined
company’s ability to maintain current members and customers and
grow members and customers; risks associated with the effect of
global pandemics, and governmental responses thereto on Kidpik’s
and the combined company’s operations, those of Kidpik’s and the
combined company’s vendors, Kidpik’s and the combined company’s
customers and members and the economy in general; risks associated
with Kidpik’s and the combined company’s supply chain and
third-party service providers, interruptions in the supply of raw
materials and merchandise; increased costs of raw materials,
products and shipping costs due to inflation; disruptions at
Kidpik’s and the combined company’s warehouse facility and/or of
their data or information services, Kidpik’s and the combined
company’s ability to locate warehouse and distribution facilities
and the lease terms of any such facilities; issues affecting our
shipping providers; disruptions to the internet; risks that effect
our ability to successfully market Kidpik’s and the combined
company’s products to key demographics; the effect of data security
breaches, malicious code and/or hackers; increased competition and
our ability to maintain and strengthen Kidpik’s and the combined
company’s brand name; changes in consumer tastes and preferences
and changing fashion trends; material changes and/or terminations
of Kidpik’s and the combined company’s relationships with key
vendors; significant product returns from customers, excess
inventory and Kidpik’s and the combined company’s ability to manage
our inventory; the effect of trade restrictions and tariffs,
increased costs associated therewith and/or decreased availability
of products; Kidpik’s and the combined company’s ability to
innovate, expand their offerings and compete against competitors
which may have greater resources; the fact that Kidpik’s Chief
Executive Officer has majority voting control over Kidpik and will
have majority control over the combined company; if the use of
“cookie” tracking technologies is further restricted, regulated, or
blocked, or if changes in technology cause cookies to become less
reliable or acceptable as a means of tracking consumer behavior;
Kidpik’s and the combined company’s ability to comply with the
covenants of future loan and lending agreements and covenants;
Kidpik’s and the combined company’s ability to prevent credit card
and payment fraud; the risk of unauthorized access to confidential
information; Kidpik’s and the combined company’s ability to protect
intellectual property and trade secrets, claims from third-parties
that Kidpik and/or the combined company have violated their
intellectual property or trade secrets and potential lawsuits in
connection therewith; Kidpik’s and the combined company’s ability
to comply with changing regulations and laws, penalties associated
with any non-compliance (inadvertent or otherwise), the effect of
new laws or regulations, and Kidpik’s and the combined company’s
ability to comply with such new laws or regulations; changes in tax
rates; Kidpik’s and the combined company’s reliance and retention
of management; the outcome of future lawsuits, litigation,
regulatory matters or claims; the fact that Kidpik and the combined
company have a limited operating history; dilution caused by the
conversion of convertible debtentures; the effect of future
acquisitions on Kidpik’s and the combined company’s operations and
expenses; and others that are included from time to time in filings
made by Kidpik with the Securities and Exchange Commission, many of
which are beyond the control of Kidpik and the combined company,
including, but not limited to, in the “Cautionary Note Regarding
Forward-Looking Statements” and “Risk Factors” sections in Kidpik’s
Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which it has filed,
and files from time to time, with the Securities and Exchange
Commission, including, but not limited to its Annual Report on Form
10-K for the year ended December 30, 2023 and its Quarterly Report
on Form 10-Q for the quarter ended June 29, 2024. These reports are
available at www.sec.gov and on Kidpik’s website at
https://investor.kidpik.com/sec-filings. Kidpik cautions that the
foregoing list of important factors is not complete. All subsequent
written and oral forward-looking statements attributable to Kidpik
or any person acting on behalf of Kidpik are expressly qualified in
their entirety by the cautionary statements referenced above. Other
unknown or unpredictable factors also could have material adverse
effects on Kidpik’s and the combined company’s future results
and/or could cause their actual results and financial condition to
differ materially from those indicated in the forward-looking
statements. The forward-looking statements included in this press
release are made only as of the date hereof. Kidpik cannot
guarantee future results, levels of activity, performance or
achievements. Accordingly, you should not place undue reliance on
these forward-looking statements. Except as required by law,
neither Nina Footwear nor Kidpik undertakes any obligation to
update publicly any forward-looking statements for any reason after
the date of this press release to conform these statements to
actual results or to changes in their expectations. If they update
one or more forward-looking statements, no inference should be
drawn that they will make additional updates with respect to those
or other forward-looking statements.
Additional Information and Where to Find It
In connection with the proposed Merger, Kidpik intends to file a
proxy statement with the Securities and Exchange Commission (the
“Proxy Statement”), that will be distributed to holders of Kidpik’s
common stock in connection with its solicitation of proxies for the
vote by Kidpik’s stockholders with respect to the proposed Merger
and other matters as may be described in the Proxy Statement. The
Proxy Statement, when it is filed and mailed to stockholders, will
contain important information about the proposed Merger and the
other matters to be voted upon at a meeting of Kidpik’s
stockholders to be held to approve the proposed Merger and other
matters (the “Merger Meeting”). Kidpik may also file other
documents with the SEC regarding the proposed Merger. Kidpik
stockholders and other interested persons are advised to read, when
available, the Proxy Statement, as well as any amendments or
supplements thereto, because they will contain important
information about the proposed Merger. When available, the
definitive Proxy Statement will be mailed to Kidpik stockholders as
of a record date to be established for voting on the proposed
Merger and the other matters to be voted upon at the Merger
Meeting.
Kidpik’s stockholders may obtain copies of the aforementioned
documents and other documents filed by Kidpik with the SEC, without
charge, once available, at the SEC’s web site at www.sec.gov, on
Kidpik’s website at https://investor.kidpik.com/sec-filings or,
alternatively, by directing a request by mail, email or telephone
to Kidpik at 200 Park Avenue South, 3rd Floor, New York, New York
10003; ir@kidpik.com; or (212) 399-2323, respectively.
Participants in the Solicitation
Kidpik, Nina Footwear, and their respective directors, executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies from
Kidpik’s stockholders with respect to the proposed Merger.
Information regarding the persons who may be deemed participants in
the solicitation of proxies from Kidpik’s stockholders in
connection with the proposed Merger will be contained in the Proxy
Statement relating to the proposed Merger, when available, which
will be filed with the SEC. Additionally, information about
Kidpik’s directors and executive officers and their ownership of
Kidpik is available in Kidpik’s Annual Report on Form 10-K/A
(Amendment No. 1), as filed with the Securities and Exchange
Commission on April 29, 2024 (the “Amended Form 10-K”). To the
extent holdings of securities by potential participants (or the
identity of such participants) have changed since the information
contained in the Amended Form 10-K, such information has been or
will be reflected on Kidpik’s Statements of Change in Ownership on
Forms 3 and 4 filed with the SEC. You may obtain free copies of
these documents using the sources indicated above.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the Proxy Statement and other relevant materials to be filed with
the SEC regarding the Merger Agreement when they become available.
Investors should read the Proxy Statement carefully when it becomes
available before making any voting or investment decisions. You may
obtain free copies of these documents from Kidpik using the sources
indicated above.
Non-Solicitation
This communication is for informational purposes only and is not
intended to and shall not constitute a proxy statement or the
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the Merger Agreement and is not
intended to and shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy or subscribe for any securities or a solicitation of any vote
of approval, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction.
Kidpik Corp.
Condensed Interim Statements
of Operations
(Unaudited)
For the 13 weeks ended
For the 26 weeks ended
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Revenues, net
$
1,128,323
$
3,448,919
$
3,367,628
$
7,478,397
Cost of goods sold
381,577
1,372,563
1,055,118
2,991,789
Gross profit
746,746
2,076,356
2,312,510
4,486,608
Operating expenses
Shipping and handling
612,048
949,734
1,393,073
2,138,956
Payroll and related costs
512,466
1,094,135
1,411,025
2,205,236
General and administrative
902,999
2,024,871
2,514,815
4,049,435
Depreciation and amortization
12,066
12,426
24,641
23,113
Total operating expenses
2,039,579
4,081,166
5,343,554
8,416,740
Operating loss
(1,292,833
)
(2,004,810
)
(3,031,044
)
(3,930,132
)
Other expenses (income)
Interest expense
8,617
24,415
39,817
49,605
Other expenses
-
-
-
-
Total other expenses
8,617
24,415
39,817
49,605
Net loss
$
(1,301,450
)
$
(2,029,225
)
$
(3,070,861
)
$
(3,979,737
)
Net loss per share attributable to common
stockholders:
Basic
(0.67
)
(1.31
)
(1.60
)
(2.58
)
Diluted
(0.67
)
(1.31
)
(1.60
)
(2.58
)
Weighted average common shares
outstanding:
Basic
1,951,638
1,546,239
1,921,216
1,541,938
Diluted
1,951,638
1,546,239
1,921,216
1,541,938
Kidpik Corp.
Condensed Interim Balance
Sheets
June 29, 2024
December 30, 2023
(Unaudited)
(Audited)
Assets
Current assets
Cash
$
34,030
$
194,515
Restricted cash
4,618
4,618
Accounts receivable
90,158
211,739
Inventory
3,799,522
4,854,641
Prepaid expenses and other current
assets
712,512
761,969
Total current assets
4,640,840
6,027,482
Leasehold improvements and equipment,
net
72,495
97,136
Operating lease right-of-use assets
1,572,529
992,396
Total assets
$
6,285,864
$
7,117,014
Liabilities and Stockholders’ (Deficit)
Equity
Current liabilities
Accounts payable
$
1,748,897
$
1,862,266
Accounts payable, related party
2,094,866
1,868,411
Accrued expenses and other current
liabilities
296,032
438,034
Operating lease liabilities, current
406,656
281,225
Short-term debt
784,217
-
Related party loans
1,281,154
850,000
Total current liabilities
6,611,822
5,299,936
Operating lease liabilities, net of
current portion
1,253,980
780,244
Total liabilities
7,865,802
6,080,180
Commitments and contingencies
-
-
Stockholders’ (deficit) equity
Preferred stock, par value $0.001,
25,000,000 shares authorized, of which no shares are issued and
outstanding as of June 29, 2024 and December 30, 2023,
respectively
-
-
Common stock, par value $0.001, 75,000,000
shares authorized, of which 1,951,638 shares are issued and
outstanding as of June 29, 2024, and 1,872,433 shares are issued
and outstanding as of December 30, 2023
1,952
1,872
Additional paid-in capital
52,929,198
52,475,189
Accumulated deficit
(54,511,088
)
(51,440,227
)
Total stockholders’ (deficit) equity
(1,579,938
)
1,036,834
Total liabilities and stockholders’
(deficit) equity
$
6,285,864
$
7,117,014
Kidpik Corp.
Condensed Interim Statements
of Cash Flows
26 Weeks Ended
June 29, 2024
July 1, 2023
Cash flows from operating activities
Net loss
$
(3,070,861
)
$
(3,979,737
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
24,641
23,113
Equity-based compensation
454,089
558,429
Bad debt expense
26,928
151,362
Changes in operating assets and
liabilities:
Accounts receivable
94,653
28,710
Inventory
1,055,119
2,870,243
Prepaid expenses and other current
assets
49,457
145,901
Operating lease right-of-use assets and
liabilities
19,034
22,802
Accounts payable
(113,369
)
(450,965
)
Accounts payable, related parties
226,455
431,238
Accrued expenses and other current
liabilities
(142,002
)
(167,429
)
Net cash used in operating activities
(1,375,856
)
(366,333
)
Cash flows from investing activities
Purchases of leasehold improvements and
equipment
-
(76,121
)
Net cash used in investing activities
-
(76,121
)
Cash flows from financing activities
Net proceeds from advance payable
334,217
-
Net proceeds from convertible debt
450,000
-
Net proceeds from related party loan
431,154
-
Net cash provided by financing
activities
1,215,371
-
Net decrease in cash and restricted
cash
(160,485
)
(442,454
)
Cash and restricted cash, beginning of
period
199,133
605,213
Cash and restricted cash, end of
period
$
38,648
$
162,759
Reconciliation of cash and restricted
cash:
Cash
$
34,030
$
158,141
Restricted cash
4,618
4,618
$
38,648
$
162,759
Supplemental disclosure of cash flow
data:
Interest paid
$
17,477
$
-
Supplemental disclosure of non-cash
investing and financing activities:
Record right-of-use asset and operating
lease liabilities
$
768,756
$
-
RESULTS OF OPERATIONS
The Company’s revenue, net is disaggregated based on the
following categories:
For the 13 weeks ended
For the 26 weeks ended
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Subscription boxes
$
804,837
$
2,607,543
$
2,321,502
$
5,579,110
3rd party websites
32,801
426,914
291,702
863,212
Online website sales
290,685
414,462
754,424
1,036,075
Total revenue
$
1,128,323
$
3,448,919
$
3,367,628
$
7,478,397
Gross Margin
For the 13 weeks ended
For the 26 weeks ended
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Gross margin
66.2
%
60.2
%
68.7
%
60.0
%
Gross profit is equal to our net sales less cost of goods sold.
Gross profit as a percentage of our net sales is referred to as
gross margin. Cost of sales consists of the purchase price of
merchandise sold to customers and includes import duties and other
taxes, freight in, returns from customers, inventory write-offs,
and other miscellaneous shrinkage. The improvement in the gross
margin was the result of an inventory write-down in the fourth
quarter of 2023. Without the reduction of the cost basis due to the
write-down, gross margin would be 60.7% for the 13 weeks ended June
29, 2024 and 55.9% for the 26 weeks ended June 29, 2024.
Shipped Items
We define shipped items as the total number of items shipped in
a given period to our customers through our active subscription,
Amazon and online website sales.
For the 13 weeks ended
For the 26 weeks ended
(in thousands)
(in thousands)
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Shipped Items
135
290
330
630
Average Shipment Keep Rate
Average shipment keep rate is calculated as the total number of
items kept by our customers divided by total number of shipped
items in a given period.
For the 13 weeks ended
For the 26 weeks ended
June 29, 2024
July 1, 2023
June 29, 2024
July 1, 2022
Average Shipment Keep Rate
74.6%
75.1
%
76.7%
71.3
%
Revenue by Channel
13 weeks ended June 29,
2024
13 weeks ended July 1,
2023
Change ($)
Change (%)
Revenue by channel
Subscription boxes
$
804,837
$
2,607,543
$
(1,802,706
)
(69.1
)%
Third-party websites
32,801
426,914
(394,113
)
(92.3
)%
Online website sales
290,685
414,462
(123,777
)
(29.9
)%
Total revenue
$
1,128,323
$
3,448,919
$
(2,320,596
)
(67.3
)%
26 weeks ended June 29,
2024
26 weeks ended July 1,
2023
Change ($)
Change (%)
Revenue by channel
Subscription boxes
$
2,321,502
$
5,579,110
$
(3,257,608
)
(58.4
)%
Third-party websites
291,702
863,212
(571,510
)
(66.2
)%
Online website sales
725,424
1,036,075
(281,651
)
(27.2
)%
Total revenue
$
3,367,628
$
7,478,397
$
(4,110,769
)
(55.0
)%
Subscription Boxes Revenue
13 weeks ended June 29,
2024
13 weeks ended July 1,
2023
Change ($)
Change (%)
Subscription boxes revenue from
Active subscriptions – recurring boxes
$
783,106
$
2,177,298
$
(1,394,192
)
(64.0
)%
New subscriptions – first box
21,731
430,245
(913,838
)
(94.9
)%
Total subscription boxes revenue
$
804,837
$
2,607,543
$
(1,802,706
)
(69.1
)%
26 weeks ended June 29,
2024
26 weeks ended July 1,
2023
Change ($)
Change (%)
Subscription boxes revenue from
Active subscriptions – recurring boxes
$
2,234,554
$
4,578,324
$
(2,343,770
)
(51.2
)%
New subscriptions – first box
86,948
1,000,786
(913,838
)
(91.3
)%
Total subscription boxes revenue
$
2,321,502
$
5,579,110
$
(3,257,608
)
(58.4
)%
Revenue by Product Line
13 weeks ended June 29,
2024
13 weeks ended July 1,
2023
Change ($)
Change (%)
Revenue by product line
Girls’ apparel
$
855,288
$
2,636,965
$
(1,781,677
)
(67.6
)%
Boys’ apparel
233,680
640,937
(407,258
)
(63.5
)%
Toddlers’ apparel
39,355
171,017
(131,662
)
(77.0
)%
Total revenue
$
1,128,323
$
3,448,919
$
(2,320,596
)
(67.3
)%
26 weeks ended June 29,
2024
26 weeks ended July 1,
2023
Change ($)
Change (%)
Revenue by product line
Girls’ apparel
$
2,530,504
$
5,684,721
$
(3,154,217
)
(55.5
)%
Boys’ apparel
720,675
1,428,096
(707,421
)
(49.5
)%
Toddlers’ apparel
116,449
365,580
(249,131
)
(68.1
)%
Total revenue
$
3,367,628
$
7,478,397
$
(4,110,769
)
(55.0
)%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240819200313/en/
Investor Relations: ir@kidpik.com
Media: press@kidpik.com
Kidpik (NASDAQ:PIK)
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From Oct 2024 to Nov 2024
Kidpik (NASDAQ:PIK)
Historical Stock Chart
From Nov 2023 to Nov 2024
