Bark eyes price increases to offset tariffs

Dive Brief:

Bark is considering “modest” price increases to offset tariff headwinds and maintain its gross margins, Chief Financial Officer Zahir Ibrahim said on a call with analysts last week. Some toys in the first half of the year will experience tariffs of up to 80%, but that will decrease “significantly” in the back half of the year following productivity improvement efforts and source diversification.
Total revenue decreased 5% to $115.4 million, while net loss came in at $6 million in Q4, a 23.7% increase compared to the year-ago quarter. For the year, revenue was $484 million, down 1.2%, and net losses narrowed 11% to $32.9 million.
The company delivered its first ever adjusted EBITDA positive year at $5.4 million, a $16 million improvement. Gross margin improved by 70 basis points to 62.4% for the fiscal year.

Dive Insight:

Fiscal 2025 was a “meaningful” one to Bark. 

“Just three years ago, we lost $58 million and burned nearly $200 million in cash,” co-founder and CEO Matt Meeker said. “At the time, many questioned our long-term viability. Now, three years later, we’re not only standing, we’re in a positive adjusted EBIDTA territory.” 

Meanwhile, toys, which represent around two-thirds of the company’s revenue, are currently sourced from China and subject to new tariffs. The company will shift a portion of its production to other countries in response, which will begin in the coming weeks. Bark expects to start shipping products from new areas in time for the holiday quarter, and is aiming for a more diverse footprint for its toy production by the end of 2026. 

The pet retailer is also pulling back slightly on its subscription box business, which still accounted for around 85% of its revenue last year. “While that number is coming down from previous years, it’s not moving fast enough,” Meeker said. Therefore, the company is accelerating its efforts to diversify its product lines, channels and revenue growth. 

One way the company is shuffling its efforts can be found in its Bark Air service, which launched last spring. Bark partnered with a jet charter company to create the “world’s first air travel experience designed specifically for dogs first, and their human companions second.” Nearly $6 million came in over the last fiscal year, and the company said it was encouraged by early demand and will be growing its service offering.