a.k.a. Brands Holding Corp. Reports First Quarter 2025 Financial Results

Net Sales Increased 10.1% Compared to the First Quarter of 2024, with U.S. Net Sales Up 14.2%

Active Customer Growth of 7.8% on a Trailing Twelve-Month Basis Compared to the First Quarter of 2024

SAN FRANCISCO--(BUSINESS WIRE)--May 13, 2025-- 

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, 2025.

Results for the First Quarter

   -- Net sales increased 10.1% to $128.7 million, compared to $116.8 million 
      in the first quarter of 2024; up 12.3% on a constant currency basis1. 
 
   -- In the U.S., net sales increased 14.2% compared to the first quarter of 
      2024. 
 
   -- Net loss was $(8.4) million, or $(0.78) per share, in the first quarter 
      of 2025, compared to net loss of $(8.9) million, or $(0.85) per share, in 
      the first quarter of 2024. 
 
   -- Adjusted EBITDA2 was $2.7 million in the first quarter of 2025, compared 
      to $0.9 million in the first quarter of 2024. 

"We delivered a strong start to the year, with outstanding first-quarter performance driven by our team's disciplined execution across our brands. This marks our fourth consecutive quarter of growth, underscoring the effectiveness of our strategic initiatives," said Ciaran Long, Chief Executive Officer. "We grew net sales approximately 10% to $129 million, with continued strength in the U.S. which grew 14%. Importantly, the Australia and New Zealand region registered 6% net sales growth in the quarter, reflecting the progress we've made over the past two years, particularly at the Culture Kings brand, to strengthen the business. And rounding out the quarter, benefiting from the strong top-line growth and healthy gross margin, we exceeded our expectations and delivered $2.7 million of adjusted EBITDA.

"We continued to deepen customer engagement in the first quarter, achieving nearly 8% growth in our active customer base over the trailing twelve months, a clear indication of the strong demand for our brands. Our omnichannel expansion plans are also on-track and exceeding expectations. Princess Polly opened its seventh store during the first quarter in Soho, which was our strongest opening to date, and plans to open six additional stores this year, bringing the total to 13 by year-end. The existing store fleet continues to outperform our revenue expectations, while also creating a halo effect on surrounding online markets. In addition, we are encouraged by the early reads from Princess Polly and Petal & Pup's wholesale debuts across Nordstrom's entire store fleet.

"As we approach the evolving trade environment impacting our U.S. business, we are confident that our strategic actions, swift execution and flexible business model will enable us to navigate this period and emerge even stronger. Importantly, we continue to see solid demand trends in the first six weeks of the second quarter, in-line with our outlook for the year. We're committed to building durable fashion brands for the long-term, and we believe the power of our operating model and the actions we're taking will enhance our agility, resilience and long-term competitiveness," concluded Long.

First Quarter Financial Details

   -- Net sales increased 10.1% to $128.7 million, compared to $116.8 million 
      in the first quarter of 2024. The increase was driven by a 9.2% increase 
      in the number of orders, primarily due to growth in the U.S. On a 
      constant currency basis1, net sales increased 12.3%. 
 
   -- Gross margin was 57.2%, compared to 56.2% in the first quarter of 2024. 
      The improvement was primarily driven by the impact of more full price 
      selling and an improved inventory position, partially offset by the 
      effect of growing wholesale initiatives. 
 
   -- Selling expenses were $38.2 million, compared to $34.2 million in the 
      first quarter of 2024. Selling expenses were 29.7% of net sales, compared 
      to 29.3% of net sales in the first quarter of 2024. The increases were 
      driven by the impact of opening additional stores. 
 
   -- Marketing expenses were $15.2 million, compared to $14.9 million in the 
      first quarter of 2024. Marketing expenses were 11.8% of net sales, 
      compared to 12.7% of net sales in the first quarter of 2024. 
 
   -- General and administrative ("G&A") expenses were $25.7 million, compared 
      to $22.7 million in the first quarter of 2024. G&A expenses were 20.0% of 
      net sales, compared to 19.4% of net sales in the first quarter of 2024. 
      The increase in G&A expenses as a percent of net sales during the quarter 
      was primarily driven by an increase in wages and incentive compensation. 
 
   -- Adjusted EBITDA2 was $2.7 million, or 2.1% of net sales, compared to $0.9 
      million, or 0.7% of net sales, in the first quarter of 2024. 

Balance Sheet and Cash Flow

   -- Cash and cash equivalents at the end of the first quarter totaled $26.7 
      million, compared to $24.2 million at the end of fiscal year 2024. 
 
   -- Inventory at the end of the first quarter totaled $94.4 million, compared 
      to $95.8 million at the end of fiscal year 2024 and $91.5 million at the 
      end of the first quarter of 2024. 
 
   -- Debt at the end of the first quarter totaled $119.9 million, compared to 
      $111.7 million at the end of fiscal year 2024 and $103.6 million at the 
      end of the first quarter of 2024. The increase in debt at the end of the 
      first quarter of 2025 was primarily due to the investment in new Princess 
      Polly stores in the U.S. 
 
   -- Cash flow used in operations for the three months ended March 31, 2025 
      was $1.9 million, compared to cash flow used in operations of $7.7 
      million for the three months ended March 31, 2024. 

Outlook

For the second quarter of 2025, the Company expects:

   -- Net sales between $154 million and $158 million 
 
   -- Adjusted EBITDA3 between $7.0 million and $8.0 million 
 
   -- Weighted average diluted share count of 10.7 million 

For the full fiscal 2025 year, the Company now expects:

   -- Net sales between $600 million and $610 million 
 
   -- Adjusted EBITDA3 between $24.0 million and $27.5 million 
 
   -- Weighted average diluted share count of 10.8 million 
 
   -- Capital expenditures of approximately $12 million to $14 million 

The above outlook contemplates the estimated impact on tariffs enacted during 2025. 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 13, 2025, 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 13753071. 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 and 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

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