Bark (BARK) Q2 2027 earnings review
Bark's retail sales grow again, but subscription orders keep falling
Bark, the seller of BarkBox dog-toy subscriptions, shrank more slowly as its retail business started growing again. Revenue reached $88 million, above the top of its own range, and sales through stores and marketplaces rose 4%. Cash climbed too, but $11 million of one-time tariff refunds paid for that.
| Revenue | $87.6M −18% from a year ago; plan was $83–85M |
|---|---|
| Subscription orders | 1.86M −27% from a year ago |
| Gross margin, with tariff refunds moved to the quarter of sale | 61.0% 62.6% a year ago (excluding Bark Air) |
| Full-year revenue outlook | Unchanged middle of the range: −16% from last year |
⚖️ Verdict: 🟢 Bullish
The story got better because the rest of the year now looks reachable. Bark's plan for the next quarter has sales about 9% below a year earlier, by our math, a far smaller drop than this quarter's. One caution: subscription orders keep falling at the old pace, and gross margin is lower once last year's refunds return to the quarters they belong to.
The question now is whether retail can carry Bark once the refunds end and its dog airline goes. Either the record holiday orders for Girl Scout and Harry Potter toys start lasting growth, or they lift one quarter and then fade. Retail sales for January to March, due next spring, will tell.
🐂 Bull Case
Store and Marketplace Sales Grew Again
Bark sells its dog toys and treats in two ways: subscription boxes mailed to homes, and sales through retailers and online marketplaces such as Target, Costco and Amazon, which it calls Commerce. After three quarters of decline, Commerce revenue rose 3.6% to $25.7 million, because existing retail partners ordered more, the company said.
Chief executive Matt Meeker credited new partnerships with Liquid Death and Crocs, and Licksters, toys that owners fill with treats, which launched in August. This quarter Bark begins shipping a Girl Scout cookie range and a Harry Potter line for Costco, "representing the 2 largest retail orders in BARK's history", Meeker said.
This matters because subscriptions are still shrinking, so retail is the part of Bark most able to lift total sales soon. The rise also came against a harder comparison: holiday shipments that landed in this quarter last year moved into the October to December quarter this year, Bark's filing said.
What to watch: Commerce revenue for October to December, due in February, when the two record orders ship. Growth well above this quarter's rate would show that the partnerships bring new buyers rather than shifting orders between quarters.
Lower Ad and Shipping Costs Lifted Profit
Bark cut advertising last year to put profit ahead of subscriber numbers, a choice the release calls a "planned pullback in marketing spend". Advertising took 11.9% of revenue, against 14.4% a year earlier. Shipping and warehouse costs dropped by 1.5 percentage points of revenue as fewer boxes went out.
Lower overhead and advertising, finance chief Anya Hamill said, turned a $1.4 million loss into $2.0 million of profit before interest, tax, depreciation and one-offs. Office costs moved the other way, because legal fees rose.
What to watch: advertising as a share of revenue in the October to December quarter, due in February. A higher share with orders still down would mean the extra spending is not bringing lasting customers.
Full-Year Sales Target Now Looks Within Reach
In June, Bark set a full-year revenue range of $325 million to $340 million, and it kept that range this quarter. Meeker said Bark is "probably edging ourselves towards the higher end of it even without that", meaning without revenue from its dog airline.
The numbers back him for now. Revenue topped the high end of Bark's own range by $2.6 million, and the plan for October to December has sales about 9% below a year earlier, by our math. That beat shows the earlier plan was cautious, not that subscriptions have recovered.
What to watch: revenue for October to December, due in February. A result near the middle of the plan would leave the low end of the yearly range needing only a 21% drop in the final quarter, by our math, which would make the target safe.
🐻 Bear Case
Subscription Orders Still Fall by a Quarter
Most of Bark's revenue still comes from BarkBox and Super Chewer, monthly boxes of themed toys and treats mailed to a dog's home. Bark shrank this business on purpose by cutting advertising. Meeker told analysts it is "returning to growth at the same pace that we always thought we would".
The orders do not show a turn yet. Bark shipped 1.9 million orders, 27% fewer than a year earlier and close to the rate of decline in each of the past three quarters.
- Direct toy and accessory sales: down 36.7%
- Monthly retention, the share of subscribers who stay from one month to the next: 94%, up from 92%
- Average order: $31.40, up from $30.87
Bark points to the better side: subscribers stay longer and spend a little more per box. Hamill said extra advertising "resulted in a 26% increase in subscribers compared to the first quarter of this year". But Bark publishes no subscriber count, so readers cannot check that claim against orders.
What to watch: total orders for October to December, due in February. A drop smaller than one fifth would be the first sign that the added advertising is rebuilding the subscriber base.
Tariff Refunds, Not Sales, Lifted Cash
Bark's release opened with cash rising $2.9 million in the quarter, to $19.0 million. One-time tariff refunds paid for that. Bark collected $11.0 million of them in the quarter. Without the refunds, its operations used about $6 million of cash, by our math.
The last refund money arrived after the quarter closed, Hamill said, so that source is spent. She expects inventory "to come down meaningfully over the next 2 quarters as it converts into cash", but it held at $72.4 million. Bark's credit line now expires in February 2027.
What to watch: cash and inventory at the end of December, due in February. Cash that climbs only as inventory shrinks would show that running the business still costs Bark more than it brings in.
Gross Margin Slipped on a Fair Comparison
Gross margin, the share of revenue left after the cost of the goods, rose to 58.9% from 57.9%. Hamill told analysts that "reported gross margin reflects the underlying business", since no refunds for last year's tariffs landed in this quarter.
That ignores the year-ago side. Bark's filing assigns refunds to the quarter when it sold the goods, and on that basis margin slipped to 61.0% from 62.6%, excluding the dog airline. Stores and marketplaces earn less per dollar than subscriptions, and their share of sales grew.
Retail margin fell 3.8 percentage points on that basis, on "changes in customer mix and higher royalty costs associated with new product launches", Bark said. Subscription margin went up 1.7 points.
What to watch: gross margin for October to December, due in February, when the licensed holiday orders ship. A figure under last year's on the same basis would mean retail growth costs Bark profit.
Risks this quarter didn't answer
Several standing risks got no new numbers this quarter, and one sales target dropped out of the release without comment. Each item below names the reading that would move it.
- Retail-plus-airline target: Bark promised over $100 million this year; by our math the second half needs 46% growth, and neither the release nor Meeker repeated it.
- Lawsuits: three class actions continue, with trials in May and September 2027; any damages estimate would move this.
- Finance chief: Hamill is the fourth person in the job in four quarters; a steady team through the holidays would ease this.
- Tariffs: new tariffs under other laws would undo the refund relief; cost of goods next quarter will show it.
- Retail timing: holiday shipments moved between quarters this year; two steady Commerce quarters would ease this.
👓 Other Themes
Bark Plans to Sell Its Dog Airline
After the quarter, Bark reached a preliminary deal to sell the assets of Bark Air, its charter flights for dogs and their owners, and to license the brand from January 2027. Bark Air brought in $3.5 million this quarter. Meeker said it "was not generating the bottom line contribution needed to justify continued investment", and Bark has not signed final documents.
Tariff Refunds Are Nearly Finished
In February the US Supreme Court ruled that tariffs under IEEPA, an emergency-powers law, were unlawful, so Bark claimed back what it had paid. Refunds cut its cost of goods by $1.2 million this quarter. Bark wrote that it "did not pass any of the IEEPA tariffs it paid to its customers", so it keeps the money. Its filing still lists trade policy as a risk.
💲 Other KPIs
Deferred revenue, the cash subscribers pay for boxes not yet shipped, fell 12.0% from a year ago. It had held steady for a year while sales shrank, so prepaid plans made up a growing share of the base. This quarter that share slipped, and Bark now collects less cash in advance.
Money owed by retailers rose 19.9% from a year ago while total revenue shrank. Hamill tied the balance to "the timing of commerce shipments late in Q2". Two customers owe 56% of it, the filing shows, so one slow payer would delay cash.
The average number of Bark shares climbed 4.6% from a year ago, even though the dog-toy seller has resumed buybacks. Stock awards to staff added more shares than the repurchases removed. With cash tight, larger buybacks would compete with money for running the business.
🔮 Guidance
Unchanged. The plan still has sales about 16% below last year at the middle of the range. By our math, that leaves January to March about 12% lower than a year earlier, partly because airline revenue should stop in January. Bark has kept this range since June, and Meeker said sales are heading toward its top.
Unchanged. Bark still plans $7 million to $10 million of profit before interest, tax, depreciation and one-offs. By our math, the middle of the range needs about $3.9 million in January to March. That figure would beat the $3.2 million of a year earlier by about a fifth.
New. The plan has October to December sales about 9% below a year earlier, the smallest drop in five quarters, by our math. That would leave revenue about 3% above this quarter. Bark ships its two largest retail orders in this period, and holiday shipments moved into it from the summer.
New. The middle of the range matches this quarter's profit before interest, tax, depreciation and one-offs, against a $1.6 million loss a year earlier. That is about 2.2% of revenue, by our math. Bark has landed inside its profit range in each of the last three quarters it gave one.
❓ Key Questions
How many active subscribers does Bark have now?
Hamill cited a rise in subscribers since the first quarter, but Bark publishes no count or new sign-ups. Without them, readers cannot tell whether extra advertising is rebuilding a base that orders show still shrinking.
Is the $100 million retail-and-airline target still alive?
Bark set it in June and repeated it in September, but this release dropped it. With the airline leaving in January, the target now rests on retail alone.
Will Bark renew its credit line beyond February?
The bank line now expires in February 2027, and Bark only says it intends a longer renewal. Cash is thin once the tariff refunds end, so the terms matter, including any limits on buybacks.
Who bought the shares Bark issued in the spring?
The filing shows Bark issued 100,000 shares for $2.0 million "in connection with sale" while it was buying stock back. Bark has not explained the deal.
What could the two consumer lawsuits cost?
The text-message and email suits seek $500 per violation, tripled if willful. Bark gives no estimate, and its legal fees already went up this quarter.