BARK, Inc. (NYSE:BARK) Q3 2023 Earnings Conference Call February 3, 2023 4:30 PM ET

Company Participants

Mike Mougias - Vice President of Investor Relations

Matt Meeker - Co-Founder and Chief Executive Officer

Zahir Ibrahim - Chief Financial Officer

Conference Call Participants

Maria Ripps - Canaccord Genuity

Corey Grady - Jefferies

Ryan Meyers - Lake Street Capital Markets

Ygal Arounian - Citigroup

Operator

Good afternoon. Thank you for attending today's BARK's Third Quarter Fiscal 2023 Earnings Call. My name is Matt, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions-and-answers at the end. [Operator Instructions]

I would now like to pass the conference over to our host, Mike Mougias, Vice President of Investor Relations. Michael, please go ahead.

Mike Mougias

Good afternoon, everyone, and welcome to BARK's third quarter fiscal 2023 earnings call. Joining me today are Matt Meeker, Co-Founder and CEO; Zahir Ibrahim, Chief Financial Officer; and Howard Yeaton, who served as Interim Chief Financial Officer during the period we are reporting on today.

Today's conference call is being webcast in its entirety on our website and a replay of the webcast will be made available shortly after the call. Additionally, a press release covering the company's financial results was issued this afternoon and can be found on our Investor Relations website.

Before I pass it over to Matt, I would like to remind you of the following information regarding forward-looking statements. The statements made on today's call are based on management's current expectations and are subject to risks and uncertainties that could cause actual future results and outcomes to differ. Please refer to our SEC filings for more information on some of the factors that could affect our future results and outcomes.

Also during today's call, we will discuss certain non-GAAP financial measures. Reconciliations to our non-GAAP financial measures is contained in this afternoon's press release.

And with that, let me now pass it over to Matt.

Matt Meeker

Thanks Mike and good afternoon, everyone. Our results last quarter illustrate the significant progress we continue to make across each of our strategic initiatives we laid out at the beginning of the year, namely accelerating our path to profitability; making meaningful progress in our food and consumables business; and transforming our customer base by acquiring more premium customers.

Last quarter, we grew our average order value by $2 year-over-year, improved our gross margin by 4 points to 60%, reduced our inventory by $15 million and ended the quarter with $164 million of cash on the balance sheet, essentially unchanged from fiscal Q2. And for the first quarter since going public, we generated positive free cash flow. These are important milestones and a direct result of actions we took to diversify our product mix, improve our long-term unit economics and meaningfully reduce our cash burn. And while the progress we have made across these initiatives is encouraging, we expect these trends to continue further in the quarters ahead.