Kidpik Corp.

Q3 revenue was $3.4 million, down 7.4% year over year and down 6.7% quarter over quarter. Gross margin was 61.1%, an 80-basis-point increase year over year. Net loss was approximately $1.9 million, or a loss of $0.24 per share, compared with a net loss of $2.4 million, or a loss of $0.32 per share, last year. Adjusted EBITDA was a net loss of $1.6 million versus a net loss of $2.1 million last year. Subscription sales were about $2.4 million, down 15.4% quarter over quarter; third-party website sales were $492,000, up 4.9%; and online website sales were $470,000, up 58.3%. Cash at quarter-end was about $60,000, compared with $605,000 at the end of 2022. Operating cash flow usage for the 39-week period was $0.5 million versus $7 million last year. The company did not provide numeric next-quarter or full-year guidance.

The CEO was unexpectedly absent, so Moshe Dabah delivered the strategic commentary. He said the company is facing a difficult consumer environment, with inflation, higher rates, and weaker confidence reducing discretionary spending on clothing. Management is responding by reducing inventory purchases, cutting operating costs and headcount, expanding proprietary-brand sales beyond the box, and launching a new holiday website experience.

Jill Pasechnick highlighted that the quarter was generally consistent with Q2, but revenue fell to $3.4 million as subscription sales declined. She noted gross margin of 61.1%, up 80 basis points year over year, and said the company used $0.5 million of operating cash in the first 39 weeks versus $7 million a year earlier. Cash was only about $60,000 at quarter-end, though current assets were $9.7 million versus $5.1 million in current liabilities, leaving $4.6 million of working capital.

There was no analyst Q&A in the transcript. The most notable company disclosure was the announcement that Kidpik is formally reviewing strategic alternatives, with possible outcomes including business combinations, liquidation of assets, or a sale of the company or its assets. Management also emphasized it would not comment further unless required by law or deemed appropriate.