BARK Q2 Deep Dive: Retail Expansion and Product Diversification Drive Strategy Amid Cautious Outlook

Pet products provider Bark (NYSE:BARK) announced better-than-expected revenue in Q2 CY2025, but sales fell by 11.5% year on year to $102.9 million. On the other hand, next quarter’s revenue guidance of $103.5 million was less impressive, coming in 8.1% below analysts’ estimates. Its non-GAAP loss of $0.02 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

Bark’s second quarter results were met with a negative market reaction, reflecting concerns about declining sales and cautious management commentary. CEO Matt Meeker attributed the 11.5% year-over-year revenue decline to ongoing macroeconomic uncertainty and shifting consumer behavior, but highlighted strong growth in retail partnerships and improved profitability within the direct-to-consumer business. Management also pointed to a sharp pivot in product mix, noting that higher-value Super Chewer subscriptions accounted for the majority of new customers. Meeker emphasized, “The experience is resonating and the team is performing well,” as Bark continues to diversify beyond its traditional subscription box model.

Looking ahead, management emphasized a focus on broadening revenue streams and maintaining positive adjusted EBITDA despite external headwinds. CFO Zahir Ibrahim cited ongoing uncertainty around tariffs and trade policy, which has led Bark to withhold full-year guidance and take a cautious approach to capital allocation. New initiatives, including the BARK in the Belly consumables line and expanded shelf presence at major retailers, are expected to help drive growth. Meeker stated, “Cross-sell revenue should be an important driver of revenue, AOV and margin growth going forward for years to come,” underscoring Bark’s strategy to leverage its new Shopify platform and retail footprint.

Key Insights from Management’s Remarks

Management cited retail channel expansion, product mix shifts, and disciplined marketing as central to the quarter’s performance, while acknowledging ongoing macro and tariff-related headwinds.

• Retail distribution gains: Bark’s partnerships with retailers like Walmart, Costco, Target, and Chewy led to nearly 50% year-over-year growth in its Commerce segment, signaling greater shelf presence and reach beyond its legacy subscription model.
• Shift to premium offerings: The Super Chewer subscription accounted for roughly two-thirds of new direct-to-consumer customers, reversing last year’s product mix and boosting average order value as well as direct-to-consumer gross margin to a record 67%.
• D2C marketing discipline: Management reduced marketing spend by 38% year-over-year in the subscription business while still achieving stronger-than-expected new subscriber growth, attributing this to a focus on attracting higher-quality, longer-retaining customers rather than discount-driven acquisition.
• Brand and product innovation: Bark introduced its new brand platform, SPARK, and announced the upcoming launch of the BARK in the Belly consumables line, which will unify branding and expand availability across digital and retail channels, with a philanthropic angle tied to dog food sales.
• Tariff impacts and supply chain response: The company faced high tariffs, particularly on seasonal products, which pressured Commerce segment margins. Management responded by diversifying suppliers and expects gross margin recovery in the back half of the year.

Drivers of Future Performance

Bark’s outlook is shaped by continued diversification of revenue streams, expansion into new retail channels, and margin management amid external uncertainties.

• Retail and channel expansion: Management believes scaling partnerships with major retailers and launching new consumables will be key to driving revenue growth, with commerce expected to represent a greater share of total sales in upcoming quarters.
• Margin recovery initiatives: The company expects gross margins to improve as tariff pressures moderate and legacy inventory sell-through concludes, particularly in the Commerce segment where margins are targeted to return to the low-to-mid 40% range.
• Cautious capital allocation: Due to unpredictability in tariffs and broader consumer demand, Bark is prioritizing positive adjusted EBITDA and maintaining flexible cost structures, delaying full-year guidance until there is greater visibility.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory team will be watching (1) the early performance and distribution of BARK in the Belly consumables across both digital and retail channels, (2) margin trends in the Commerce segment as tariff pressures and legacy inventory impacts subside, and (3) continued growth in retail partnerships and new revenue streams like BARK Air. Execution on cross-selling and successful shelf resets will also be important markers for Bark’s evolving strategy.

Bark currently trades at $0.82, down from $0.85 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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