a.k.a Brands' US sales grow 13.7% in Q2, eyes retail expansion

Despite improved topline performance, the company reported a net loss of $3.6 million, or $0.34 per share, compared to a $2.3 million loss, or $0.22 per share, in the same quarter last year. Adjusted EBITDA stood at $7.5 million, down from $8 million in Q2 FY24.

The gross margin slightly declined to 57.5 per cent from 57.7 per cent due to increased tariffs, partially offset by better inventory positioning and fuller-price sales. Operating expenses rose across the board, with selling expenses at $45.4 million, marketing at $19.9 million, and general and administrative expenses at $27.5 million.

Cash and cash equivalents at the end of the quarter stood at $23.1 million, while debt totalled $108.7 million. The inventory decreased to $92.5 million from $106.7 million a year ago. The company generated $10 million in operating cash flow in H1 2025, a turnaround from the $4.2 million outflow in H1 2024.

“We’re pleased to report a strong second quarter, with net sales growth of 8 per cent, reaching $161 million and exceeding our expectations,” said Ciaran Long, chief executive officer (CEO). “This marks our fifth consecutive quarter of growth, demonstrating the strength of our brands and the successful execution of our strategic initiatives.”

“Momentum in the US remained strong, with net sales up 14 per cent, while the Australia/New Zealand region continued to show steady signs of stabilisation. Benefitting from the strong top-line growth, expanding brand awareness and continued operating discipline, we delivered $7.5 million of adjusted EBITDA for the second quarter, in line with our expectations,” added Long.

Based on the performance and outlook, a.k.a Brands has raised its FY25 net sales guidance to $608–$612 million, up from $600–$610 million previously, while maintaining adjusted EBITDA guidance at $24.5–$27.5 million. For Q3 FY25, the company expects net sales of $154–$158 million and adjusted EBITDA of $7.3–$7.7 million.

“Our solid second quarter results reflect the hard work and commitment of our team, and I want to thank them for their continued dedication,” said Long.

The CEO also said that the company’s direct-to-consumer (DTC) channels remained strong and that its omnichannel expansion was surpassing expectations. He noted that Princess Polly had opened three new stores in Q2 and was on track to reach 13 locations by the end of the year, with plans to open 8 to 10 additional stores in 2026.

He added that the company was deepening its wholesale partnerships to boost brand awareness and attract new customers. Highlighting recent success, he pointed out the chain-wide debut of Princess Polly and Petal & Pup at Nordstrom, which he said reinforced the global potential of their brands. Culture Kings, he reported, was making progress with its test-and-repeat merchandising strategy, with in-house brands achieving double-digit growth in the second quarter.

Long further mentioned that sourcing diversification initiatives were progressing as planned, and the company had already started receiving products from new vendors, expressing satisfaction with the timelines, quality, and cost. He concluded by expressing confidence in the company’s flexible, world-class supply chain and its ability to adapt as the business grows and trade dynamics evolve. Looking ahead, he said he believed the company was well positioned to grow brand awareness, capture additional market share, and drive profitable growth in both the near and long term.

ALCHEMPro News Desk (SG)