BARK’s second‑quarter fiscal 2026 results showed total revenue of $107.0 million, a 15.2% decline from the $126.1 million earned in the same period a year earlier but still above the company’s guidance range of $102.0 million to $105.0 million and analyst estimates of roughly $105.6 million. The beat was driven by a 5.6% year‑over‑year increase in Commerce revenue to $24.8 million and a 138% jump in BARK Air revenue to $3.6 million, offsetting a 19.9% drop in the core Direct‑to‑Consumer (DTC) segment, which fell to $82.1 million as subscription growth slowed and marketing spend was moderated in response to tariff uncertainty and macro‑economic headwinds.
The company’s adjusted EBITDA of $(1.4) million fell short of analyst expectations of approximately $0.27 million, marking a miss despite falling within the company’s own guidance range of $(2.0) million to $2.0 million. The negative figure reflects a combination of higher cost of goods sold—largely driven by tariff‑related input price increases—and a shift in the revenue mix toward lower‑margin BARK Air and Commerce sales. Net loss widened to $(10.7) million from $(5.3) million a year earlier, underscoring the pressure on profitability as the company continues to invest in new business lines while managing a debt‑free balance sheet.
Gross margin contracted to 57.9% from 60.4% a year earlier, a 250‑basis‑point decline. The compression is attributed to tariff‑related cost pressures on raw materials, opportunistic sell‑through of surplus inventory, and a changing revenue mix that increased the proportion of lower‑margin BARK Air and Commerce sales relative to the higher‑margin DTC subscription business. Management noted that tariff uncertainty has forced higher input costs, while the company’s focus on diversifying revenue streams has temporarily diluted gross margin as it scales new segments.
BARK’s debt‑free milestone was achieved when the company repaid its $45 million convertible note on November 6, 2025, eliminating all outstanding debt. The company also extended a $35 million line of credit with Western Alliance Bank on November 3, 2025, preserving liquidity for future growth initiatives. CEO Matt Meeker emphasized that the debt repayment “strengthens the company’s foundation and positions it for long‑term value creation, even in a volatile macro environment.” CFO Zahir Ibrahim highlighted the credit line extension as a strategic buffer amid ongoing tariff uncertainty and supplier transition challenges.
For the third quarter of fiscal 2026, BARK guided total revenue to $101.0 million–$104.0 million, below analyst consensus of $108.6 million, and adjusted EBITDA to $(5.0) million–$(1.0) million, reflecting cautious outlook amid tariff uncertainty. Management’s guidance signals concern about near‑term demand while maintaining confidence in the company’s diversified revenue mix and disciplined cost management. The market reaction was tempered by the EPS miss and widening net loss, but the revenue beat and debt‑free status provided a positive backdrop for the company’s strategic trajectory.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.