AKA

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Adjusted EBITDA grew 16% year-over-year to $8.7 million, the highest quarterly level since Q2 2022, with strong profit flow-through. Gross margin expanded 360 basis points to 61.1%, driven by lower tariffs and improved full-price selling, especially in streetwear brands. Rest of world net sales surged 50.5% in Q2, fueled by the new UK distribution center, which is enhancing conversion and delivery speed. Princess Polly is expanding its store footprint with plans for up to 10 new US stores in 2027, targeting a long-term potential of 100 US stores. The balance sheet is the strongest since IPO, with inventory down 13.6% and debt down 8.1% year-over-year, while net leverage improved to 3.37x. Q3-to-date momentum is strong, with overall net sales up high single-digits and US sales up double-digits, supporting confidence in the full-year outlook. Australia and New Zealand net sales declined 13% in Q2, pressured by a challenging macro environment and tough prior-year comparisons. Net sales were essentially flat year-over-year at $160.1 million, with a constant currency decline of 5.3%. Selling expenses increased to 29.9% of net sales from 28.3% a year ago, driven by higher in-store costs from retail expansion. The company expects a one-time charge of approximately $3 million in Q3 related to a planned distribution center relocation. Gross margin is expected to decline to approximately 59% in Q3, reflecting current tariff rates and elevated air freight costs. Culture Kings' sales in Australia were below expectations, though the brand contributed to margin expansion. Warning! GuruFocus has detected 5 Warning Signs with AKA. Is AKA fairly valued? Test your thesis with our free DCF calculator. Q: Can you walk us through what you're seeing in the business right now that supports the unchanged revenue guidance and the strength expected in the second half of the year?A: Kieran (CEO) noted that Q3-to-date net sales are up high single-digits, with the US running up double-digits. This momentum is driven by a much better inventory position and flows compared to last year's supply chain transition, an expanded network of wholesale and marketplace partners, seven more stores than last year, and the strong performance from the new UK distribution center, which helped rest of world sales grow over 50% in Q2. Q: What are you seeing from the current Princess Polly store base in terms of productivity and paybacks that gives you confidence in the long-term target of at least 100 US stores?A: Kieran (CEO) stated that with 13 doors open, the stores are introducing the brand to new customers and creating a halo effect for the online business. They are modeling a payback of two years or less, but are currently seeing better performance than that across the fleet. The company plans to open at least 10 more stores next year and sees the potential for 100 in the US. Q: How will the new Culture Kings stores in Puerto Rico and a major metropolitan area compare to the Las Vegas flagship, and what are you leveraging from that experience?A: Kieran (CEO) explained that the new stores will be smaller, in the 4,500 to 6,000 square foot range, and won't have the large features of Vegas. They will leverage learnings from the high-performing Brisbane store and the Vegas flagship, leading with headwear, footwear, and first-party brands like Minimal, Loiter, and St. Martha, which are driving meaningful gross margin increases. Q: Can you provide more detail on the performance of the new Princess Polly stores in Australia and the economic pressures impacting the Australia/New Zealand region?A: Kieran (CEO) reported that the second Princess Polly store on the Gold Coast has been a phenomenal success with strong traffic. While the ANZ region faced macro pressures from fuel and rate hikes, causing sales to decline 13% in Q2, the company is seeing positive comps in July, with newer product lines comping double-digits and contributing more to gross margin, giving confidence the business is getting back on track. Q: How do you think about long-term channel penetration (e-com vs. stores vs. wholesale) and the margin contribution by channel for the broader portfolio?A: Kieran (CEO) stated that even with 100 Princess Polly stores, the direct-to-consumer business would still be larger than stores due to the halo effect. Wholesale and marketplace would be materially smaller but still meaningful. This model holds true for the streetwear business and Petal & Pup, though the timing may differ. Q: How are you thinking about capital deployment between funding store growth (CapEx) and paying down debt in the medium term?A: Kevin (CFO) highlighted the strong balance sheet, with debt down 8% year-over-year and leverage down to 3.37x. Over the last 18 months, the company generated $35 million in operating cash, putting $25 million into CapEx and $10 million toward debt. This track record shows the ability to fund growth while continuing to reduce leverage. Q: As you expand Princess Polly to 100 stores, are you seeing leverage in the cost to open stores, and are you using different store sizes for different neighborhoods? Also, what are the margin structures of retail versus wholesale?A: Kieran (CEO) said they are using data to focus on the right locations and economics rather than chasing a specific store count. They are refining store layouts and fixtures to bring down opening costs. From a margin perspective, stores have a much higher gross margin due to full-price retail, but also carry higher selling and marketing expenses, resulting in similar EBITDA before G&A compared to wholesale. Q: Can you elaborate on the drivers of the 360 basis point gross margin expansion in Q2 and the expectations for Q3?A: Kevin (CFO) detailed that approximately 240 basis points of the expansion came from lower year-over-year tariffs, with the remaining 120 basis points driven by higher full-price selling, particularly in the streetwear brands, partially offset by higher air freight costs. For Q3, they expect gross margin of approximately 59%, reflecting current tariff rates and elevated air freight costs. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in a.k.a. Brands Holding Corp.? Here are five stocks we like better. Profitability improved despite flat sales: Second-quarter net sales were essentially unchanged at $160.1 million, while adjusted EBITDA rose 16% to $8.7 million and adjusted EBITDA margin expanded to 5.5%. Gross margin increased 360 basis points to 61.1%, helped by lower tariffs and stronger full-price selling. Expansion beyond e-commerce is accelerating: Princess Polly’s store network is growing after a successful Los Angeles pop-up, with five additional stores planned by the end of 2026 and a long-term opportunity for at least 100 U.S. locations. The company is also expanding wholesale, marketplace and international distribution, including through a new U.K. distribution center. Management maintained its fiscal 2026 outlook: a.k.a. Brands continues to target $625 million–$635 million in sales and $30 million–$32 million in adjusted EBITDA. Third-quarter sales were tracking up high single digits, although the company expects a roughly $3 million one-time charge related to relocating a distribution center. a.k.a. Brands (NYSE:AKA) reported second-quarter fiscal 2026 net sales that were essentially flat year over year, while adjusted EBITDA rose 16% as the fashion retailer cited higher gross margin, inventory discipline and expanding distribution channels. Net sales totaled $160.1 million in the quarter, compared with $160.5 million a year earlier. Adjusted EBITDA increased to $8.7 million from $7.5 million, representing the company’s highest quarterly adjusted EBITDA since the second quarter of 2022, according to CFO Kevin Grant. Adjusted EBITDA margin rose 80 basis points to 5.5%. → 3 Drone Stocks That Should Soar After the Summer Slump CEO Ciaran Long said the company’s operating model has been repositioned around profitability and durability, supported by expansion beyond its direct-to-consumer roots into physical retail, wholesale and marketplaces. U.S. net sales increased 2.1% to $110.7 million, while sales in the rest-of-world segment rose 50.5% to $9.6 million. The rest-of-world growth was partly driven by the new U.K. distribution center, which began operating in March. Long said the center’s two-day delivery window has improved customer conversion and created momentum for Princess Polly internationally. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Australia and New Zealand sales declined 13% to $39.8 million. Management attributed the decline to consumer pressure from the macroeconomic environment and a difficult comparison with the prior year, when the company cleared non-go-forward inventory. Total orders declined 0.5% year over year to 2.04 million, while trailing 12-month active customers, excluding wholesale, increased 4.4% to 4.31 million. Average order value held steady at $78. → Jersey Mike's Serves Fresh Gains After IPO Stumble Gross margin expanded 360 basis points to 61.1%. Grant said approximately 240 basis points of the increase reflected lower year-over-year tariffs, while the remaining 120 basis points largely came from the streetwear business, where higher full-price selling was partly offset by increased air freight costs. Management expects third-quarter gross margin of about 59%, reflecting current tariff rates and elevated air freight costs. Princess Polly, the company’s largest brand, operated 13 U.S. stores and two Australian locations at the end of the quarter. The company said a 1,000-square-foot pop-up at The Grove in Los Angeles, which opened in May, exceeded expectations and has been converted into a permanent store. Princess Polly plans to open four additional U.S. stores and one Australian store by the end of 2026. For 2027, the company expects to open as many as 10 additional locations and has already executed five leases in Charlotte, Boca Raton, Nashville, Burlington and Jacksonville. Long said the company sees potential for at least 100 Princess Polly locations in the U.S. over the longer term. Grant said the company models store investments to generate payback within two years and is seeing performance above that level across the current store fleet. Management said stores are introducing the brand to new customers while also producing a “halo effect” for online sales. The company expects direct-to-consumer sales to remain larger than store sales even if Princess Polly reaches 100 locations, with wholesale and marketplace sales remaining smaller but meaningful channels. Princess Polly is also expanding core seasonal assortments in denim, sweats and tops ahead of the back-to-school period, while maintaining its test-and-repeat merchandising model. The company said its streetwear brands, including Culture Kings, mnml, Loiter and Carré, are shifting toward a less promotional, full-price test-and-repeat model. Long said that while Culture Kings sales in Australia fell below expectations, the business contributed meaningfully to gross-margin expansion. Culture Kings signed a lease for a new Puerto Rico store and is in final negotiations for another location in a major metropolitan market. Both stores are expected to open in the fourth quarter of 2026, marking Culture Kings’ first new U.S. store openings since 2022. The stores are expected to range from roughly 4,500 to 6,000 square feet, smaller than the company’s Las Vegas flagship. Management said the locations will incorporate lessons from the Las Vegas store and Culture Kings’ newer Brisbane location in Australia, with emphasis on headwear, footwear and the company’s in-house brands. Meanwhile, Petal & Pup continued to add wholesale and marketplace distribution. Management cited Nordstrom as a productive partner and said tops had become the top-performing category for the brand on Macy’s platform. Petal & Pup also plans to participate in the MAGIC wholesale trade show in Las Vegas and has moved its fall and holiday product launches earlier to extend its second-half selling window. a.k.a. Brands ended the quarter with $21.1 million in cash and cash equivalents, compared with $23.1 million a year earlier. Total debt declined 8.1% year over year to $99.9 million, while net leverage improved to 3.37x from 3.5x. Inventory fell 13.6% to $79.9 million. The company received substantially all of $25.8 million in expected IEEPA tariff refunds during the quarter, which Grant said was reflected in operating cash flow. Management said third-quarter sales were tracking up high single digits, including double-digit growth in the U.S. quarter to date. The company reiterated its fiscal 2026 outlook: Net sales of $625 million to $635 million. Adjusted EBITDA of $30 million to $32 million. Third-quarter net sales of $160 million to $164 million. Third-quarter adjusted EBITDA of $8 million to $8.5 million. The company expects to record a one-time charge of about $3 million in third-quarter selling expenses tied to a planned distribution center relocation. The charge will be excluded from adjusted EBITDA. Long also announced that Ilene Eskenazi had stepped down from the board and that Carrie Cassidy had joined as a director. Cassidy previously served as chief people officer at Restoration Hardware and held senior roles at Levi Strauss, Barclays and First Data. a.k.a. Brands Holding Corp. operates a portfolio of online fashion brands in the United States, Australia, and internationally. The company offers streetwear apparel, dresses, tops, bottoms, shoes, headwear, and accessories through its online stores under the Princess Polly, Petal & Pup, Culture Kings, and mnml brands. It also operates physical stores under the Culture Kings brand. The company was founded in 2018 and is headquartered in San Francisco, California. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "a.k.a. Brands Q2 Earnings Call Highlights" was originally published by MarketBeat. 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Reiterates Full Year 2026 Outlook Princess Polly Targets a Minimum of 100 U.S. Stores Long Term Culture Kings Signs Puerto Rico Store Lease, Nears Agreement on New Store in Major U.S. Market SAN FRANCISCO, August 05, 2026--(BUSINESS WIRE)--a.k.a. Brands Holding Corp. ("a.k.a. Brands" or the "Company") (NYSE: AKA), a portfolio of next generation fashion brands, today announced financial results for the quarter ended June 30, 2026. Results for the Second Quarter Net sales decreased 0.3% to $160.1 million, compared to $160.5 million in the second quarter of 2025, down 5.3% on a constant currency basis1. Net loss was $0.2 million, or $(0.01) per share, in the second quarter of 2026, compared to net loss of $3.6 million, or $(0.34) per share, in the second quarter of 2025. Adjusted EBITDA2 was $8.7 million in the second quarter of 2026, compared to $7.5 million in the second quarter of 2025. "Our second quarter results further validate that a.k.a. Brands has been fundamentally repositioned to deliver profitable, durable growth," said Ciaran Long, Chief Executive Officer, a.k.a. Brands. "We generated net sales of $160.1 million and delivered adjusted EBITDA growth of 16% year-over-year to $8.7 million, driven by expanded distribution across stores, wholesale and marketplace, a strengthened operational foundation, and continued financial discipline across the business. We also ended the quarter with our strongest balance sheet since becoming a public company, providing increased flexibility to invest in both growth and profitability. "For the quarter, we delivered on our growth expectations in the U.S. and Rest of World, with net sales up 2% and more than 50%, respectively, while ANZ was pressured by a challenging macro backdrop and a tough prior-year comparison from the clearance of non-go forward goods. Importantly, quarter to date momentum has accelerated in all regions, with overall net sales growth in the high-single-digits alongside healthy margins, giving us continued confidence in our outlook for the second half. "Our brands advanced their strategic priorities this quarter. Princess Polly’s Grove pop-up exceeded expectations, and the brand remains on track for four new U.S. stores by year end and up to ten more in 2027, with a long-term opportunity for at least 100 U.S. stores. Our new U.K. distribution center is elevating the customer experience, accelerating growth in the UK and reinforcing Princess Polly’s international growth potential. Petal & Pup continues to build distribution of its expanding lifestyle assortment by adding more specialty wholesale partners. Our streetwear brands, led by Culture Kings, announced plans to open its first U.S. store since 2022, and Culture Kings’ continued shift toward a full-price, test-and-repeat model meaningfully helped expand margins across the group. We remain confident that our omnichannel expansion and strengthened financial foundation position us for sustainable, profitable growth over the long term," concluded Long. Second Quarter Financial Details Net sales decreased 0.3% to $160.1 million, compared to $160.5 million in the second quarter of 2025. The decrease was driven by a 0.5% decrease in the number of orders. On a constant currency basis1, net sales decreased 5.3%. Gross margin was 61.1%, compared to 57.5% in the second quarter of 2025. The increase in gross margin was primarily driven by lower tariff rates and the improved full price selling on our streetwear brands. Selling expenses were $47.8 million, compared to $45.4 million in the second quarter of 2025. Selling expenses were 29.9% of net sales, compared to 28.3% of net sales in the second quarter of 2025. The increase was primarily driven by an increase in store selling expenses as our retail footprint expands. Marketing expenses were $21.4 million, compared to $19.9 million in the second quarter of 2025. Marketing expenses were 13.3% of net sales, compared to 12.4% of net sales in the second quarter of 2025. General and administrative ("G&A") expenses were $27.5 million, compared to $27.5 million in the second quarter of 2025. G&A expenses were 17.2% of net sales, compared to 17.1% of net sales in the second quarter of 2025. Adjusted EBITDA2 was $8.7 million, or 5.5% of net sales, compared to $7.5 million, or 4.7% of net sales, in the second quarter of 2025. Balance Sheet and Cash Flow Cash and cash equivalents at the end of the second quarter totaled $21.1 million, compared to $20.3 million at the end of fiscal year 2025. Inventory at the end of the second quarter totaled $79.9 million, compared to $86.2 million at the end of fiscal year 2025 and $92.5 million at the end of the second quarter of 2025. Debt at the end of the second quarter totaled $99.9 million, compared to $111.1 million at the end of fiscal year 2025 and $108.7 million at the end of the second quarter of 2025. Cash flow provided by operations for the six months ended June 30, 2026 was $18.7 million, compared to cash flow provided by operations of $10.0 million for the six months ended June 30, 2025. Outlook We are providing the following guidance for the full year ending December 31, 2026 and the third quarter ending September 30, 2026: The guidance and forward-looking statements made in this press release and on the conference call are based on management’s expectations as of the date of this press release. See "Forward-Looking Statements" for additional information. Conference Call A conference call to discuss the Company’s second quarter results is scheduled for August 5, 2026, at 4:30 p.m. ET. Those who wish to participate in the call may do so by dialing (877) 858-5495 or (201) 689-8853. The conference call will also be webcast live at https://ir.aka-brands.com in the Events and Presentations section. A recording will be available shortly after the conclusion of the call. To access the replay, please dial (877) 660-6853 or (201) 612-7415 for international callers, conference ID 13761431. An archive of the webcast will be available on a.k.a. Brands’ investor relations website. About a.k.a. Brands a.k.a. Brands maintains a portfolio of global fashion brands, Princess Polly, Culture Kings, Petal & Pup and mnml. Through these brands, we reach a broad audience of next-generation consumers who seek fashion inspiration on social media and primarily shop online. Our brands are hyper-focused on the customer and serving them newness and a seamless experience throughout the entire shopping journey. We leverage a data-driven ‘test and repeat’ merchandising model that allows us to introduce new and exclusive fashion weekly, so our customers are always on-trend. We leverage innovative data-driven insights to authentically connect and engage with customers across the latest marketing platforms. Further, we are committed to showing up for customers wherever they shop, whether that’s online, in-stores or through wholesale channels. Leveraging our industry expertise and operational synergies, we help accelerate our brands so they can grow faster, reach broader audiences, achieve greater scale and enhance their profitability. We believe we are disrupting the status quo and pioneering a new approach to fashion. Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose," "target," "continue," "could," "potential," "predict," "would," or similar expressions and the negatives of those terms. These forward-looking statements include, but are not limited to, statements regarding the Company's outlook for the third quarter and full year 2026, including net sales, Adjusted EBITDA, capital expenditures and weighted average diluted shares, which represent management's current estimates and are subject to the risks and uncertainties described below. Forward-looking statements are based on information available at the time those statements are made and on our current expectations and projections about future events, and are subject to risks and uncertainties. If any of these risks or uncertainties materialize, or if any assumptions prove incorrect, actual performance or results may differ materially from those expressed in or suggested by the forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control. These risks and uncertainties include, without limitation: the effects of economic downturns and unstable market conditions on consumer demand and our business; our ability in the future to continue to comply with the New York Stock Exchange's ("NYSE") listing standards and maintain the listing of our common stock on the NYSE; risks related to doing business in China, including the imposition of tariffs and duties on goods imported from China; our ability to anticipate rapidly-changing consumer preferences in the apparel, footwear and accessories industries; our ability to execute our strategic initiatives, including transitioning Culture Kings to a data-driven, short lead time merchandising cycle; our ability to acquire new customers, retain existing customers or maintain average order value levels; the effectiveness of our marketing and our level of customer traffic; merchandise return rates; our ability to manage our inventory effectively; our success in identifying brands to acquire, integrate and manage on our platform; our ability to expand into new markets, including our entry into the United Kingdom through Princess Polly's U.K. distribution operations, which involves risks related to regulatory compliance, customs and trade requirements, consumer behavior differences and operational complexity; our ability to successfully execute our physical retail expansion strategy, including the opening and operation of new Princess Polly stores in the U.S. and Australia and a second U.S. Culture Kings location, which involves risks related to lease commitments, build-out costs, site selection, new market performance and the diversion of management attention and resources; the global nature of our business, including international economic and geopolitical instability, legal, compliance and supply chain risks (including as a result of trade policies, including the negotiation or termination of trade agreements and the imposition of tariffs on imports into the U.S. and Australia, including the potential for additional or escalating tariffs on goods sourced from China and other countries, which could increase our cost of goods sold, reduce gross margins and require changes to our sourcing strategy); interruptions in or increased costs of shipping and distribution, which could affect our ability to deliver our products to the market; our use of social media platforms and influencer sponsorship initiatives, which could adversely affect our reputation or subject us to fines or other penalties; our ability to successfully implement and integrate artificial intelligence tools and technologies across our operations, including risks related to data quality, system reliability, regulatory developments affecting the use of AI and our ability to realize anticipated cost savings and margin improvements from such initiatives; fluctuating operating results; the inherent challenges in measuring certain of our key operating metrics, and the risk that real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business; the potential for tax liabilities that may increase the costs to our consumers; our ability to attract and retain highly qualified personnel, including key members of our leadership team; fluctuations in wage rates and the price, availability and quality of raw materials and finished goods, which could increase costs; foreign currency fluctuations; the effect of claims, lawsuits, government investigations, other legal or regulatory proceedings or commercial or contractual disputes; and other risks and uncertainties set forth in the sections entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Forward-Looking Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the "SEC") on March 5, 2026, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, and any other reports that the Company may file with the SEC. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. a.k.a. Brands does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Use of Non-GAAP Financial Measures and Other Operating Metrics In addition to results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), this press release includes certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA margin. Management utilizes these non-GAAP financial measures for evaluating our ongoing operations, generating future operating plans, making strategic decisions regarding the allocation of capital, and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when reviewed collectively with our GAAP financial information, provide meaningful supplemental information to both management and investors in assessing our operating performance by excluding certain expenses that may not be indicative of our ongoing core operating performance, and in analyzing historical performance and planning, forecasting and analyzing future periods. These non-GAAP measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, should not be considered in isolation, and the non-GAAP financial measures used by the Company may be different from similarly-titled non-GAAP financial measures used by other companies. With respect to our forward-looking Adjusted EBITDA guidance, we have not provided a quantitative reconciliation to the most directly comparable forward-looking GAAP measure (net income (loss)) because we are unable, without making unreasonable efforts, to project certain reconciling items. These items include, but are not limited to, future equity-based compensation expense, income taxes, interest expense and transaction costs. These items are inherently variable and uncertain and depend on various factors, some of which are outside of the Company's control or ability to predict, and for this reason we are unable to assess their probable significance. For a reconciliation of historical non-GAAP financial measures to their most directly comparable GAAP measures, please see the reconciliation tables at the end of this press release. We encourage reviewing this reconciliation in conjunction with the non-GAAP financial measures for each period presented, rather than relying on any single financial measure. In future periods, we may exclude similar items, may incur income and expenses similar to such excluded items, and may include other expenses, costs or non-recurring items in our non-GAAP measures. Additional Information This press release does not purport to be all-inclusive or to contain all of the information you may desire. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Recipients should not rely on this press release as the basis for any investment decision and should refer to the Company's filings with the SEC for complete information. Certain information contained in this press release relating to industry trends, market size and the Company's market position is based on the Company's estimates and internal data, as well as information obtained from third-party sources. While the Company believes such information to be reasonable, it has not independently verified and cannot guarantee the accuracy or completeness of information obtained from third-party sources. Key Operational Metrics and Regional Sales Active Customers We view the number of active customers as a key indicator of our growth, our value proposition and consumer awareness of our brand, and their desire to purchase our products. In any particular period, we determine our number of active customers by counting the total number of unique customer accounts who have made at least one purchase in the preceding 12-month period, measured from the last date of such period. Average Order Value We define average order value ("AOV") as net sales in a given period divided by the total orders placed in that period. AOV may fluctuate as we expand into new categories or geographies or as our assortment changes. Number of Orders We define the number of orders as the total number of orders placed by our customers, prior to product returns, across our platform or in our stores in any given period. An order is counted on the day the customer places the order. We consider the number of orders to be a key indicator of our ability to attract and retain customers, as well as an indicator of the desirability of our products. a.k.a. BRANDS HOLDING CORP.RECONCILIATION OF NON-GAAP FINANCIAL MEASURES(in thousands, except per share data)(unaudited) Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures that management uses to assess our operating performance. Because Adjusted EBITDA and Adjusted EBITDA margin facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. We also believe this information will be useful for investors to facilitate comparisons of our operating performance and better identify trends in our business. We expect Adjusted EBITDA margin to increase over the long-term as we continue to scale our business and achieve greater leverage in our operating expenses. We calculate Adjusted EBITDA as net income (loss) adjusted to exclude: interest and other expense; provision for (benefit from) income taxes; depreciation and amortization expense; equity-based compensation expense; costs to establish or relocate distribution centers; transaction costs; costs related to severance from headcount reductions; goodwill and intangible asset impairment; sales tax penalties; insured losses, net of any recoveries; and one-time or non-recurring items. We calculate Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA margin are considered non-GAAP financial measures under the SEC’s rules because they exclude certain amounts included in net income (loss) and net income (loss) margin, the most directly comparable financial measures calculated in accordance with GAAP. A reconciliation of non-GAAP Adjusted EBITDA to net loss for the three and six months ended June 30, 2026 and 2025, is as follows: View source version on businesswire.com: https://www.businesswire.com/news/home/20260805495697/en/ Contacts Investor Contact [email protected] Media Contact [email protected]

Investors in a.k.a. Brands Holding Corp. (NYSE:AKA) had a good week, as its shares rose 3.4% to close at US$11.36 following the release of its first-quarter results. Revenues of US$132m arrived in line with expectations, although statutory losses per share were US$0.66, an impressive 34% smaller than what broker models predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. After the latest results, the five analysts covering a.k.a. Brands Holding are now predicting revenues of US$630.7m in 2026. If met, this would reflect a satisfactory 4.4% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 38% to US$1.73. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$630.7m and losses of US$1.69 per share in 2026. So it's pretty clear consensus is mixed on a.k.a. Brands Holding after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a modest increase to per-share loss expectations. Check out our latest analysis for a.k.a. Brands Holding As a result, there was no major change to the consensus price target of US$19.75, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values a.k.a. Brands Holding at US$30.00 per share, while the most bearish prices it at US$11.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business. Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of a.k.a. Brands Holding'shistorical trends, as the 5.9% annualised revenue growth to the end of 2026 is roughly in line with the 5.6% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.2% annually. It's clear that while a.k.a. Brands Holding's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself. The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at a.k.a. Brands Holding. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. With that in mind, we wouldn't be too quick to come to a conclusion on a.k.a. Brands Holding. Long-term earnings power is much more important than next year's profits. We have forecasts for a.k.a. Brands Holding going out to 2027, and you can see them free on our platform here. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for a.k.a. Brands Holding that you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Interested in a.k.a. Brands Holding Corp.? Here are five stocks we like better. a.k.a. Brands beat expectations in Q1, with net sales up 3% to $132.5 million and Adjusted EBITDA rising to $5.1 million. Gross margin improved meaningfully as merchandising, sourcing and inventory changes started to take hold. Princess Polly was a standout performer, driven by strong full-price sell-through, TikTok growth, and continued store expansion. The brand is adding more U.S. and Australian locations while leveraging social commerce to attract new customers efficiently. The company’s streetwear turnaround and inventory reset continued to improve margins, helped by the shift to a test-and-repeat model. Despite ongoing consumer and cost pressures, management maintained full-year guidance for sales and Adjusted EBITDA. a.k.a. Brands (NYSE:AKA) reported a stronger-than-expected start to fiscal 2026, with first-quarter net sales rising 3% to $132.5 million and Adjusted EBITDA increasing to $5.1 million, management said on the company’s earnings call. Chief Executive Officer Ciaran Long said the results reflected “significant gross margin expansion year-over-year” as changes to the company’s merchandising, sourcing and inventory model began to show up in financial performance. Excluding one-time items related to tariffs and strategic charges tied primarily to legacy streetwear inventory, gross margin reached 59%, up about 180 basis points from a year earlier. → Rocket Lab Just Hit a New All-Time High—Time to Buy or Let It Breathe? “We view this as the single clearest proof point that the structural changes are working,” Long said, referring in particular to margin gains in the company’s streetwear brands. Chief Financial Officer Kevin Grant said first-quarter Adjusted EBITDA rose from $2.7 million a year earlier, with Adjusted EBITDA margin improving 180 basis points to 3.9%. He said underlying gross margin expansion was driven by improved inventory discipline, stronger full-price sell-through and the continued rollout of the company’s test-and-repeat model, especially in streetwear. → MercadoLibre Boldly Invests in Growth: Discount Deepens The company also recorded several tariff- and inventory-related items in the quarter. Grant said a.k.a. Brands paid $25.8 million in IEEPA tariffs since their inception, including $18.6 million that flowed through cost of goods sold and $7.2 million capitalized in inventory. Following a Supreme Court decision overturning the tariffs and the company’s refund submission to U.S. Customs and Border Protection, a.k.a. Brands recognized the expected benefit as a receivable in the quarter. Grant said the company had already received about $6 million of the expected $25.8 million refund as of the call. At the same time, the company wrote off $12 million of legacy streetwear inventory, which Grant described as a one-time reset tied to the completion of the move to a test-and-repeat model. → MP Materials Is Quietly Building a Rare Earth Powerhouse Inventory ended the quarter at $67.7 million, down 28% from $94.4 million a year earlier. Total debt was $109.6 million, down from $119.9 million a year ago, while cash and cash equivalents totaled $12.9 million. Long said Princess Polly, the company’s largest brand, delivered a strong quarter, supported by weekly product newness, disciplined test-and-repeat execution and strong full-price sell-through. Dresses remained a key volume driver, while swim was a standout category heading into the second quarter. Long also highlighted traction in basics and knits, which he said were helping expand the brand’s share of wardrobe. Seasonal events including Valentine’s Day, festival and graduation helped drive growth, with graduation delivering record performance across sales, inventory turns and margins, according to Long. Princess Polly continued to scale its TikTok presence during the quarter, with the brand going live up to 100 hours per week and leveraging thousands of affiliate and creator videos per month. Long said February and March were both record months for the brand on TikTok, and TikTok Shop continued to drive new customer acquisition efficiently. The company is also expanding Princess Polly’s physical retail footprint. Long said the brand operates 13 stores in the U.S. and opened its first Australian store at Bondi Beach in December. Princess Polly plans to open a 1,000-square-foot pop-up at The Grove in Los Angeles running from the end of May through July. The company has eight new U.S. store leases fully executed, with four expected to open by year-end, and plans another Australian store at Pacific Fair in the second half of the year. Petal & Pup continued to gain traction with its core customer, Long said, with event dressing remaining the highest-growth category across regions and channels. He said customers are also moving into additional categories as the brand expands its separates offering, with tops and bottoms representing a higher share of the mix. Wholesale remained a key growth area. Long said Nordstrom performance stayed strong, with Petal & Pup established in the retailer’s trend section across dresses and casual styles. Von Maur launched in February and was already chasing top-performing styles after strong initial sell-through. Dillard’s completed its first store test shipment in the first quarter and is expected to go live across nine locations in the second quarter. Petal & Pup also opened a new Los Angeles showroom during March market week and secured 13 new specialty accounts within the first month, ranging from independent boutiques to multi-location retailers. Long said Culture Kings’ transition has been a multiyear strategic priority, including rebuilding the in-house brand portfolio, resetting inventory, improving product quality and moving to test-and-repeat merchandising. He said that work is now translating into measurable results, with full-price mix and gross margin improving materially year over year. Culture Kings’ in-house brands including Loiter, 73Studio, Carré and Saint Morta were areas of focus. Long said 73Studio had a strong quarter, helped by Marvel and Xbox launches, while Loiter’s Marvel collection resonated with customers. The company is also planning future releases tied to Spider-Man and Avengers. Brand activations remained important for traffic and engagement. During the quarter, the company executed activations tied to NBA All-Star Weekend, Formula One’s Melbourne Grand Prix through a partnership with Atlassian Williams Racing, and a WWE collaboration tied to WrestleMania in Las Vegas. Long said the relocated Brisbane store in Australia is now the strongest-performing location in the country’s fleet, with gross margin, full-price mix and traffic all improving materially year over year. The company is pursuing a second U.S. Culture Kings store using lessons from the Brisbane location. a.k.a. Brands maintained its fiscal 2026 outlook for net sales of $625 million to $635 million and Adjusted EBITDA of $30 million to $32 million. For the second quarter, the company expects low-single-digit net sales growth, Adjusted EBITDA of $8.5 million to $9 million and gross margin around 60%. Grant said the full-year outlook assumes tariff rates return to levels discussed before the Supreme Court ruling in the back half of the year. He also said second-quarter gross margin reflects the tariff refund taking effect, current Section 122 tariffs and some inbound freight headwinds. During the question-and-answer session, Long said the company is seeing “some pressure on the consumer” in both the U.S. and Australia, with Australia somewhat more pressured. He said the company saw some softness late in March and into April, but improvement in May. Long also said energy-related cost pressure has been limited, mostly affecting synthetic materials, which he described as a small percentage of the business. Air freight costs have increased, but he said those costs are included in the company’s guidance. Management said the company remains focused on attracting and retaining customers, expanding brand awareness through stores and wholesale partners, and strengthening operations. Long also noted that a.k.a. Brands is increasing investment in artificial intelligence across product imagery, marketing efficiency and inventory optimization, with expectations that the initiatives will contribute to margin expansion over time. a.k.a. Brands Holding Corp. operates a portfolio of online fashion brands in the United States, Australia, and internationally. The company offers streetwear apparel, dresses, tops, bottoms, shoes, headwear, and accessories through its online stores under the Princess Polly, Petal & Pup, Culture Kings, and mnml brands. It also operates physical stores under the Culture Kings brand. The company was founded in 2018 and is headquartered in San Francisco, California. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "a.k.a. Brands Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Net Sales Increased 3% to $132.5 Million and Active Customer Growth of 3.1% on a Trailing Twelve-Month Basis Gross Margin Expansion and Continued Progress Across Strategic Priorities SAN FRANCISCO, May 12, 2026--(BUSINESS WIRE)--a.k.a. Brands Holding Corp. (NYSE: AKA), a portfolio of next generation fashion brands, today announced financial results for the quarter ended March 31, 2026. Results for the First Quarter Net sales increased 3.0% to $132.5 million, compared to $128.7 million in the first quarter of 2025, up 1.2% on a constant currency basis1. Net loss was $7.1 million, or $0.66 per share, in the first quarter of 2026, compared to net loss of $8.4 million, or $0.78 per share, in the first quarter of 2025. Adjusted EBITDA2 was $5.1 million in the first quarter of 2026, compared to $2.7 million in the first quarter of 2025. "We delivered a solid start to the year that marks a meaningful inflection point in our journey," said Ciaran Long, Chief Executive Officer, a.k.a. Brands. "Over the past three years, we have fundamentally repositioned the business to improve profitability and durability. We’ve expanded distribution across stores, wholesale, and marketplace, strengthened our operational foundation, and instilled greater financial discipline across the business. Our first quarter results demonstrate that this strategic work is translating into our financials, and we believe 2026 will be a meaningful proof point in our trajectory." "First quarter net sales grew 3% to $132.5 million, and we delivered adjusted EBITDA of $5.1 million, ahead of expectations. More importantly, excluding one-time adjustments, gross margin expanded materially year-over-year, driven by improved inventory discipline, stronger full-price sell-through, and the continued rollout of our test-and-repeat model." "Our brands continued to advance their strategic priorities during the quarter. Princess Polly is on pace with its retail expansion with 17 U.S. stores and 2 Australian stores expected to be open by the end of the year, along with a pop-up store opening at The Grove in Los Angeles later this month. Petal & Pup built wholesale momentum with strong performance across an expanding base of retail partners. Culture Kings’ sustained investment in its in-house brand portfolio is delivering measurable results, with gross margin and full-price mix improving materially year-over-year. We are confident that the progress across our brands, combined with the strength of our financial foundation, positions us well for continued growth and profitability over the long term," Long concluded. First Quarter Financial Details Net sales increased 3.0% to $132.5 million, compared to $128.7 million in the first quarter of 2025. The increase was driven by a 4.2% increase in the number of orders, that was partially offset by a 1.3% decrease in average order value. On a constant currency basis1, net sales increased 1.2%. Gross margin was 63.1%, compared to 57.2% in the first quarter of 2025. Adjusted Gross Margin2 expanded 180 basis points to 59%. The increase in gross margin was primarily driven by an improved inventory position, more full-price selling and the benefit of the IEEPA tariff adjustment; partially offset by a $12.0 million write-off of streetwear inventory, as we fully transition to our test-and-repeat model, and other tariff-related charges. Selling expenses were $41.0 million, compared to $38.2 million in the first quarter of 2025. Selling expenses were 30.9% of net sales, compared to 29.7% of net sales in the first quarter of 2025. The increase was primarily driven by an increase in store selling expenses as our retail footprint expands. Marketing expenses were $16.8 million, compared to $15.2 million in the first quarter of 2025. Marketing expenses were 12.6% of net sales, compared to 11.8% of net sales in the first quarter of 2025. General and administrative ("G&A") expenses were $30.0 million, compared to $25.7 million in the first quarter of 2025. G&A expenses were 22.7% of net sales, compared to 20.0% of net sales in the first quarter of 2025. Adjusted EBITDA2 was $5.1 million, or 3.9% of net sales, compared to $2.7 million, or 2.1% of net sales, in the first quarter of 2025. Balance Sheet and Cash Flow Cash and cash equivalents at the end of the first quarter totaled $12.9 million, compared to $20.3 million at the end of fiscal year 2025. Inventory at the end of the first quarter totaled $67.7 million, compared to $86.2 million at the end of fiscal year 2025 and $94.4 million at the end of the first quarter of 2025. Debt at the end of the first quarter totaled $109.6 million, compared to $111.1 million at the end of fiscal year 2025 and $119.9 million at the end of the first quarter of 2025. Cash flow used in operations for the three months ended March 31, 2026 was $3.8 million, compared to cash flow used in operations of $1.9 million for the three months ended March 31, 2025. Tariff Update Following the U.S. Supreme Court’s decision that the International Emergency Economic Powers Act ("IEEPA") does not authorize tariffs, the U.S. Court of International Trade has ordered U.S. Customs and Border Protection to refund IEEPA duties. The Company believes it is probable that it will recover the IEEPA tariffs previously paid and therefore has recognized a receivable in prepaid expenses and other current assets of $25.8 million as of March 2026. Of this amount, $18.6 million was recognized in cost of goods sold and $7.2 million is capitalized as inventory on the balance sheet. As part of the IEEPA reversal, the Company also recognized approximately $2.0 million of charges related to the reversal of duty drawback benefits and other anticipated charges. The below outlook contemplates tariff rates that were in place exiting 2025 due to the uncertainty surrounding go-forward tariff rates. Outlook We are providing the following guidance for the full year ending December 31, 2026 and the second quarter ending June 30, 2026: The guidance and forward-looking statements made in this press release and on the conference call are based on management’s expectations as of the date of this press release. See "Forward-Looking Statements" for additional information. Conference Call A conference call to discuss the Company’s first quarter results is scheduled for May 12, 2026, at 4:30 p.m. ET. Those who wish to participate in the call may do so by dialing (877) 858-5495 or (201) 689-8853. The conference call will also be webcast live at https://ir.aka-brands.com in the Events and Presentations section. A recording will be available shortly after the conclusion of the call. To access the replay, please dial (877) 660-6853 or (201) 612-7415 for international callers, conference ID 13760260. An archive of the webcast will be available on a.k.a. Brands’ investor relations website. Use of Non-GAAP Financial Measures and Other Operating Metrics In addition to results determined in accordance with accounting principles generally accepted in the United States of America (GAAP), management utilizes certain non-GAAP financial measures such as Adjusted EBITDA and Adjusted EBITDA margin for purposes of evaluating ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when reviewed collectively with our GAAP financial information, provide useful supplemental information to investors in assessing our operating performance. The non-GAAP financial measures should not be considered in isolation or as a substitute for the GAAP financial measures. The non-GAAP financial measures used by the Company may be different from similarly-titled non-GAAP financial measures used by other companies. See additional information at the end of this release regarding non-GAAP financial measures. About a.k.a. Brands a.k.a. Brands maintains a portfolio of global fashion brands, Princess Polly, Culture Kings, Petal & Pup and mnml. Through these brands, we reach a broad audience of next-generation consumers who seek fashion inspiration on social media and primarily shop online. Our brands are hyper-focused on the customer and serving them newness and a seamless experience throughout the entire shopping journey. We leverage a data-driven ‘test and repeat’ merchandising model that allows us to introduce new and exclusive fashion weekly, so our customers are always on-trend. We leverage innovative data-driven insights to authentically connect and engage with customers across the latest marketing platforms. Further, we are committed to showing up for customers wherever they shop, whether that’s online, in-stores or through wholesale channels. Leveraging our industry expertise and operational synergies, we help accelerate our brands so they can grow faster, reach broader audiences, achieve greater scale and enhance their profitability. We believe we are disrupting the status quo and pioneering a new approach to fashion. Forward-Looking Statements Certain statements made in this release are "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include the effects of economic downturns and unstable market conditions; our ability in the future to continue to comply with the New York Stock Exchange’s (NYSE) listing standards and maintain the listing of our common stock on the NYSE; risks related to doing business in China, including the imposition of tariffs and duties on goods imported from China; our ability to anticipate rapidly-changing consumer preferences in the apparel, footwear and accessories industries; our ability to execute our strategic initiatives, including transitioning Culture Kings to a data-driven, short lead time merchandising cycle; our ability to acquire new customers, retain existing customers or maintain average order value levels; the effectiveness of our marketing and our level of customer traffic; merchandise return rates; our ability to manage our inventory effectively; our success in identifying brands to acquire, integrate and manage on our platform; our ability to expand into new markets; the global nature of our business, including international economic, geopolitical instability (including the ongoing Russia-Ukraine and Israel-Palestine wars, relations between China and Taiwan, trade wars and relations between the U.S. and Mexico), legal, compliance and supply chain risks (including as a result of trade policies, including the negotiation or termination of trade agreements and the imposition of higher tariffs and duties on imports into the U.S. and Australia); interruptions in or increased costs of shipping and distribution, which could affect our ability to deliver our products to the market; our use of social media platforms and influencer sponsorship initiatives, which could adversely affect our reputation or subject us to fines or other penalties; fluctuating operating results; the inherent challenges in measuring certain of our key operating metrics, and the risk that real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business; the potential for tax liabilities that may increase the costs to our consumers; our ability to attract and retain highly qualified personnel, including key members of our leadership team; fluctuations in wage rates and the price, availability and quality of raw materials and finished goods, which could increase costs; foreign currency fluctuations; and other risks and uncertainties set forth in the sections entitled "Risk Factors," "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Forward-Looking Statements" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, quarterly reports on Form 10-Q and any other periodic reports that the Company may file with the Securities and Exchange Commission (the SEC). a.k.a. Brands does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Key Operational Metrics and Regional Sales Active Customers We view the number of active customers as a key indicator of our growth, our value proposition and consumer awareness of our brand, and their desire to purchase our products. In any particular period, we determine our number of active customers by counting the total number of unique customer accounts who have made at least one purchase in the preceding 12-month period, measured from the last date of such period. Average Order Value We define average order value ("AOV") as net sales in a given period divided by the total orders placed in that period. AOV may fluctuate as we expand into new categories or geographies or as our assortment changes. Number of Orders We define the number of orders as the total number of orders placed by our customers, prior to product returns, across our platform or in our stores in any given period. An order is counted on the day the customer places the order. We consider the number of orders to be a key indicator of our ability to attract and retain customers, as well as an indicator of the desirability of our products. a.k.a. BRANDS HOLDING CORP. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in thousands, except per share data) (unaudited) Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures that management uses to assess our operating performance. Because Adjusted EBITDA and Adjusted EBITDA margin facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. We also believe this information will be useful for investors to facilitate comparisons of our operating performance and better identify trends in our business. We expect Adjusted EBITDA margin to increase over the long-term as we continue to scale our business and achieve greater leverage in our operating expenses. We calculate Adjusted EBITDA as net income (loss) adjusted to exclude: interest and other expense; provision for (benefit from) income taxes; depreciation and amortization expense; equity-based compensation expense; costs to establish or relocate distribution centers; transaction costs; costs related to severance from headcount reductions; goodwill and intangible asset impairment; sales tax penalties; insured losses, net of any recoveries; and one-time or non-recurring items. We calculate Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA and Adjusted EBITDA margin are considered non-GAAP financial measures under the SEC’s rules because they exclude certain amounts included in net income (loss) and net income (loss) margin, the most directly comparable financial measures calculated in accordance with GAAP. A reconciliation of non-GAAP Adjusted EBITDA to net loss for the three months ended March 31, 2026 and 2025, is as follows: Adjusted Gross Margin Adjusted Gross Margin is a non-GAAP financial measure that management uses to assess our operating performance. Because Adjusted Gross Margin facilitates internal comparison of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. We also believe this information will be useful for investors to facilitate comparisons of our operating performance and better identify trends in our business. We expect Adjusted Gross Margin to increase over the long-term as we continue to leverage our test-and-repeat strategy, curate our brand portfolios and elevate product quality. We calculate Adjusted Gross Margin as gross margin (calculated in accordance with GAAP) adjusted to exclude: the IEEPA tariff adjustment; any reversal of duty drawback benefits and other charges related to the IEEPA tariff adjustment; an inventory write-off; and one-time or non-recurring items. Adjusted Gross Margin is considered a non-GAAP financial measure under the SEC’s rules because it excludes certain amounts included in gross margin, the most directly comparable financial measure calculated in accordance with GAAP. A reconciliation of non-GAAP Adjusted Gross Margin to gross margin for the three months ended March 31, 2026 and 2025, is as follows: View source version on businesswire.com: https://www.businesswire.com/news/home/20260512152227/en/ Contacts Investor Contact [email protected] Media Contact [email protected]

This article first appeared on GuruFocus. Net Sales: $132.5 million, up 3% year over year. Adjusted EBITDA: $5.1 million, ahead of expectations. Gross Margin: 59%, expanded by approximately 180 basis points year over year. Inventory Reduction: Inventory down by approximately $45 million over the past three years. Debt Reduction: Total debt reduced by 17% over the past three years. Cash and Cash Equivalents: $12.9 million at the end of the quarter. Total Debt: $109.6 million, down from $119.9 million a year ago. Inventory: $67.7 million, down 28% from $94.4 million a year ago. Fiscal 2026 Outlook: Net sales expected between $625 million to $635 million; adjusted EBITDA between $30 million to $32 million. Second Quarter Outlook: Net sales expected between $100 million and $164 million; adjusted EBITDA between $8.5 million and $9 million. Warning! GuruFocus has detected 4 Warning Signs with AKA. Is AKA fairly valued? Test your thesis with our free DCF calculator. Release Date: May 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Net sales increased by 3% to $132.5 million, with adjusted EBITDA of $5.1 million, exceeding expectations. Gross margin expanded by approximately 180 basis points year over year, reaching 59%, driven by improved inventory discipline and stronger full-price sell-through. Princess Polly's omnichannel expansion is progressing well, with new store openings in the US and Australia, and strong performance in wholesale and marketplace channels. Petal & Pup is gaining traction with significant growth in event dressing and expanding into new product categories and wholesale accounts. Culture Kings and Minimal brands are showing positive results from the test-and-repeat model, with improved full-price mix and gross margin. The company faced a $12 million write-off of legacy streetwear inventory as part of transitioning to the test-and-repeat model. Selling expenses increased to 30.9% of net sales due to higher store selling expenses from retail expansion. General and administrative expenses rose due to increased headcount and technology investments, impacting overall profitability. The macroeconomic environment remains dynamic, with some pressure on consumers in the US and Australia affecting sales. Air freight costs have increased, impacting margins, although these are accounted for in the company's guidance. Q: Can you clarify the gross margin guidance for the second quarter and the factors influencing it? A: Kevin Grant, CFO, explained that the second quarter gross margin is expected to be around 60%, reflecting the refund from the IEPA tariffs and the current 10% Section 122 tariffs. The increase from the first quarter's 59% is due to these factors, along with some headwinds from inbound freight costs. Q: How is the current macroeconomic environment affecting your revenue and customer base? A: Ciaran Long, CEO, noted some consumer pressure in the US and Australia but highlighted strong performance from Princess Polly and Petal & Pup. The company is optimistic about its strategic changes, including new channels and stores, which are expected to support continued growth. Q: How are rising energy costs impacting your business, and what trends did you observe in the first quarter? A: Ciaran Long, CEO, mentioned minor impacts from synthetic material costs and increased air freight expenses. The company saw some softness in late March and April but noted improvements in May. The US market showed better growth compared to Australia, where consumers are more pressured. Q: What is the impact of TikTok on your marketing strategy and customer acquisition? A: Ciaran Long, CEO, stated that TikTok has been effective in reaching new customers, with Princess Polly and Minimal actively using TikTok Live and TikTok Shop. The company is exploring ways to transition these customers to its direct-to-consumer sites. Q: What opportunities do you see for Petal & Pup in expanding beyond dresses in the wholesale market? A: Ciaran Long, CEO, highlighted Petal & Pup's success in leveraging its direct-to-consumer business to expand into wholesale channels like Nordstrom, Von Mauer, and Dillard's. The brand is seeing increased sales in tops, bottoms, and separates, indicating potential for further category expansion. For the complete transcript of the earnings call, please refer to the full earnings call transcript.