a.k.a. Brands Holding Corp. Announces Preliminary Fourth Quarter and Fiscal 2024 Results

Rhea-AI Summary

a.k.a. Brands (NYSE: AKA) announced preliminary Q4 and fiscal 2024 results, showing strong growth. Q4 net sales increased 6.8% to $159.0 million, with U.S. sales up 21.6% to $96.1 million. The company raised its Q4 adjusted EBITDA guidance to between $6.0-6.2 million, up from $1.3 million in Q4 2023.

For full-year 2024, net sales grew 5.2% to $574.7 million, with U.S. sales increasing 16.9% to $368.8 million. Full-year adjusted EBITDA is expected between $23.0-23.2 million, compared to $13.8 million in 2023.

The company reported expansion of its omnichannel initiatives, with Petal & Pup expected to be available in all Nordstrom stores, and Princess Polly opening two new stores in California with plans for a New York City location.

Positive

• Q4 net sales increased 6.8% to $159.0 million
• U.S. sales showed strong growth of 21.6% in Q4
• Q4 adjusted EBITDA guidance raised significantly to $6.0-6.2 million vs $1.3 million in 2023
• Full-year adjusted EBITDA expected to reach $23.0-23.2 million, up from $13.8 million
• Retail expansion through Nordstrom partnership and new store openings

Negative

• None.

Insights

Financial Analyst

The preliminary Q4 results demonstrate remarkable financial momentum. Net sales growth of 6.8% to $159.0 million is impressive, but the standout metric is the U.S. sales surge of 21.6% to $96.1 million. Most notably, the projected adjusted EBITDA of $6.0-6.2 million represents a dramatic 362% increase from Q4 2023's $1.3 million.

The full-year performance shows sustained growth trajectory with total sales up 5.2% to $574.7 million and U.S. sales climbing 16.9% to $368.8 million. The projected full-year adjusted EBITDA of $23.0-23.2 million marks a 67% improvement over 2023, indicating significantly enhanced operational efficiency and margin expansion.

The omnichannel expansion through Nordstrom partnership and new retail locations suggests a well-executed diversification strategy. This hybrid approach could help buffer against pure e-commerce volatility while expanding brand reach and customer acquisition channels.

Market Research Analyst

The strategic expansion into physical retail through Nordstrom's full network and standalone stores reveals a sophisticated market penetration strategy. The success of Petal & Pup's initial rollout in 40 Nordstrom locations, leading to a chain-wide expansion, validates the brand's appeal to premium retail consumers. The calculated expansion into key markets like California and New York City demonstrates careful geographic targeting of high-value fashion markets.

The robust U.S. growth amidst a challenging retail environment suggests effective brand positioning and customer acquisition strategies. The 21.6% Q4 U.S. sales growth significantly outperforms the broader fashion retail sector, indicating market share gains and strong brand resonance with the target demographic.

Net Sales Increased 6.8% Compared to the Fourth Quarter of 2023, with U.S. Net Sales up 21.6%

Raised Adjusted EBITDA¹ Guidance to be Between $6.0 million and $6.2 Million in the Fourth Quarter

SAN FRANCISCO--(BUSINESS WIRE)-- a.k.a. Brands Holding Corp. (NYSE: AKA), a portfolio of next generation fashion brands, today announced preliminary financial results for the fourth quarter and fiscal year ended December 31, 2024.

Preliminary Results for the Fourth Quarter

• Net sales increased 6.8% to approximately $159.0 million, compared to $148.9 million in the fourth quarter of 2023.
• In the U.S., net sales increased 21.6% to approximately $96.1 million, compared to $79.1 million in the fourth quarter of 2023.
• The company now expects adjusted EBITDA¹ to be between $6.0 million and $6.2 million in the fourth quarter, compared to $1.3 million in the fourth quarter of 2023.

Preliminary Results for the Full Year 2024

• Net sales increased 5.2% to approximately $574.7 million, compared to $546.3 million for fiscal year 2023.
• Net sales in the U.S. increased 16.9% to approximately $368.8 million, compared to $315.5 million for fiscal year 2023.
• The company now expects adjusted EBITDA¹ to be between $23.0 to $23.2 million for the full year 2024, compared to $13.8 million for fiscal year 2023.

“Our strong fourth quarter preliminary results exceeded our expectations on both the top and bottom lines,” said Ciaran Long, Chief Executive Officer. “Net sales increased 6.8% to $159 million, with notable strength in our U.S. business where sales grew 21.6% to $96 million. Further demonstrating the power of our business model, we are raising our adjusted EBITDA expectations to be between $6.0 and $6.2 million.”

“I am pleased to report that in addition to the strength across our direct-to-consumer channel, our omnichannel initiatives are gaining momentum. Based on Petal & Pup’s success in 40 Nordstrom stores in the Fall, Petal & Pup is expected to be available at all Nordstrom stores this Spring. Additionally, Princess Polly opened two new stores in California in the fourth quarter and is on track to open its first store in New York City early this year. Our strong fourth-quarter results, combined with continued progress across our strategic initiatives, highlight the significant growth opportunities ahead and our ability to deliver value over the long-term.”

Today the Company also announced that Ciaran Long has been appointed to Chief Executive Officer, effective immediately. For more details please reference the related press release on the investor relations website www.ir.aka-brands.com.

The foregoing results are preliminary and remain subject to the completion of normal quarter end accounting procedures and closing adjustments. It is possible that the final results may differ from the preliminary results.

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 performance measures such as adjusted EBITDA for purposes of evaluating ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP operating measure, 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.

About a.k.a. Brands

a.k.a. Brands is a portfolio of next-generation fashion brands for the next generation of consumers. Each brand in the a.k.a. portfolio targets a distinct Gen Z and millennial audience, creates authentic and inspiring social content and offers quality exclusive merchandise. a.k.a. Brands leverages its next-generation retail platform to help each brand accelerate its growth, scale in new markets and enhance its profitability. Current brands in the a.k.a. Brands portfolio include Princess Polly, Culture Kings, mnml and Petal & Pup.

Forward-Looking Statements & Preliminary Financial Information

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,” “preliminary” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements, including statements regarding preliminary results for the fourth quarter and year ended December 31, 2024. The preliminary financial information and outlook presented in this release are estimates based on information available to management as of the date of this release, have not been reviewed or audited by the Company’s independent registered accounting firm, and are subject to change. There can be no assurance that the Company’s actual results will not differ from the preliminary financial information presented in this release. The preliminary financial information presented in this release should not be viewed as a substitute for full financial statements prepared in accordance with GAAP.

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 risks and uncertainties, related to the Company’s preliminary financial results for the three months and year ended December 31, 2024, including that final results may differ due to the completion of the financial closing procedures and/or the annual audit process; 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; 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), legal, compliance and supply chain risks; 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, 2023, 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.

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¹ The Company has not provided a quantitative reconciliation of its adjusted EBITDA outlook to GAAP net income outlook because it is unable to project certain reconciling items, such as income taxes.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250113464448/en/

Investor Contact

investors@aka-brands.com

Media Contact

media@aka-brands.com

Source: a.k.a. Brands

FAQ

What was AKA Brands' Q4 2024 revenue growth?

AKA Brands reported Q4 2024 net sales growth of 6.8%, reaching $159.0 million compared to $148.9 million in Q4 2023.

How much did AKA Brands' U.S. sales grow in Q4 2024?

AKA Brands' U.S. sales increased by 21.6% in Q4 2024, reaching $96.1 million compared to $79.1 million in Q4 2023.

What is AKA Brands' adjusted EBITDA guidance for Q4 2024?

AKA Brands raised its Q4 2024 adjusted EBITDA guidance to between $6.0 million and $6.2 million, up from $1.3 million in Q4 2023.

What are AKA Brands' full-year 2024 sales results?

AKA Brands reported full-year 2024 net sales of $574.7 million, a 5.2% increase from $546.3 million in 2023.

What retail expansion plans does AKA Brands have for 2024?

AKA Brands plans to expand Petal & Pup to all Nordstrom stores and open Princess Polly's first New York City store, following two new California store openings.