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a.k.a. Brands Holding Corp. Reports Second Quarter 2024 Financial Results

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a.k.a. Brands Holding Corp. (NYSE: AKA) reported strong Q2 2024 financial results, with net sales increasing 9.5% to $148.9 million. U.S. net sales grew 19.3% year-over-year. The company saw an 11.7% growth in active customers on a trailing twelve-month basis. Adjusted EBITDA rose 44% to $8.0 million. Despite these positive results, the company reported a net loss of $2.3 million, an improvement from the $5.0 million loss in Q2 2023.

a.k.a. Brands is expanding its physical presence, with plans to open five Princess Polly stores in 2024. The company's omni-channel strategy is showing success, particularly with Petal & Pup's expansion to major retail platforms. For Q3 2024, the company expects net sales between $141-145 million and adjusted EBITDA between $6.0-7.0 million.

a.k.a. Brands Holding Corp. (NYSE: AKA) ha riportato risultati finanziari solidi per il secondo trimestre del 2024, con un aumento delle vendite nette del 9,5% a 148,9 milioni di dollari. Le vendite nette negli Stati Uniti sono cresciute del 19,3% rispetto all'anno precedente. L'azienda ha registrato una crescita dell'11,7% nel numero di clienti attivi su base annuale. L'EBITDA rettificato è aumentato del 44% a 8,0 milioni di dollari. Nonostante questi risultati positivi, l'azienda ha riportato una perdita netta di 2,3 milioni di dollari, un miglioramento rispetto alla perdita di 5,0 milioni di dollari del secondo trimestre del 2023.

a.k.a. Brands sta espandendo la propria presenza fisica, con piani per aprire cinque negozi Princess Polly nel 2024. La strategia omni-channel dell'azienda sta mostrando successo, in particolare con l'espansione di Petal & Pup su importanti piattaforme di vendita al dettaglio. Per il terzo trimestre del 2024, l'azienda prevede vendite nette tra 141-145 milioni di dollari e un EBITDA rettificato tra 6,0-7,0 milioni di dollari.

a.k.a. Brands Holding Corp. (NYSE: AKA) reportó resultados financieros fuertes para el segundo trimestre de 2024, con un aumento del 9,5% en las ventas netas a 148,9 millones de dólares. Las ventas netas en EE. UU. crecieron un 19,3% interanual. La compañía vio un crecimiento del 11,7% en el número de clientes activos en un periodo de doce meses. El EBITDA ajustado aumentó un 44% a 8,0 millones de dólares. A pesar de estos resultados positivos, la compañía reportó una pérdida neta de 2,3 millones de dólares, una mejora respecto a la pérdida de 5,0 millones de dólares en el segundo trimestre de 2023.

a.k.a. Brands está expandiendo su presencia física, con planes de abrir cinco tiendas de Princess Polly en 2024. La estrategia omni-canal de la empresa está mostrando éxito, particularmente con la expansión de Petal & Pup a plataformas minoristas importantes. Para el tercer trimestre de 2024, la compañía espera ventas netas entre 141-145 millones de dólares y EBITDA ajustado entre 6,0-7,0 millones de dólares.

a.k.a. Brands Holding Corp. (NYSE: AKA)는 2024년 2분기 강력한 재무 결과를 보고했으며, 순매출이 9.5% 증가하여 1억 4890만 달러에 달했습니다. 미국의 순매출은 전년 대비 19.3% 증가했습니다. 회사는 지난 12개월 기준으로 활성 고객이 11.7% 증가했습니다. 조정된 EBITDA는 44% 증가하여 800만 달러에 달했습니다. 이러한 긍정적인 결과에도 불구하고 회사는 230만 달러의 순손실을 보고했습니다, 이는 2023년 2분기의 500만 달러 손실에서 개선된 수치입니다.

a.k.a. Brands는 2024년에 Princess Polly 매장 5개를 열 계획으로 물리적 존재를 확장하고 있습니다. 회사의 옴니채널 전략이 특히 Petal & Pup의 주요 리테일 플랫폼으로의 확장에서 성공을 보이고 있습니다. 2024년 3분기에는 회사가 순매출을 1억 4100만 달러에서 1억 4500만 달러 사이, 조정된 EBITDA를 600만 달러에서 700만 달러 사이로 예상하고 있습니다.

a.k.a. Brands Holding Corp. (NYSE: AKA) a annoncé de solides résultats financiers pour le deuxième trimestre 2024, avec une augmentation des ventes nettes de 9,5% pour atteindre 148,9 millions de dollars. Les ventes nettes aux États-Unis ont augmenté de 19,3% par rapport à l'année précédente. L'entreprise a constaté une croissance de 11,7% du nombre de clients actifs sur une base de douze mois. L'EBITDA ajusté a augmenté de 44% pour atteindre 8,0 millions de dollars. Malgré ces résultats positifs, l'entreprise a signalé une perte nette de 2,3 millions de dollars, une amélioration par rapport à la perte de 5,0 millions de dollars au deuxième trimestre 2023.

a.k.a. Brands étend sa présence physique, avec des plans pour ouvrir cinq magasins Princess Polly en 2024. La stratégie omni-canaux de l'entreprise montre son succès, en particulier avec l'expansion de Petal & Pup sur des plateformes de vente au détail majeures. Pour le troisième trimestre 2024, l'entreprise prévoit des ventes nettes entre 141 et 145 millions de dollars et un EBITDA ajusté entre 6,0 et 7,0 millions de dollars.

a.k.a. Brands Holding Corp. (NYSE: AKA) hat starke Finanzzahlen für das 2. Quartal 2024 gemeldet, mit einem Anstieg der Nettoumsätze um 9,5% auf 148,9 Millionen Dollar. Die Nettoumsätze in den USA stiegen im Jahresvergleich um 19,3%. Das Unternehmen verzeichnete ein Wachstum der aktiven Kunden um 11,7% auf Basis der letzten zwölf Monate. Das bereinigte EBITDA stieg um 44% auf 8,0 Millionen Dollar. Trotz dieser positiven Ergebnisse meldete das Unternehmen einen Nettverlust von 2,3 Millionen Dollar, eine Verbesserung gegenüber dem Verlust von 5,0 Millionen Dollar im 2. Quartal 2023.

a.k.a. Brands erweitert seine physische Präsenz mit der Absicht, fünf Princess Polly Geschäfte im Jahr 2024 zu eröffnen. Die Omni-Channel-Strategie des Unternehmens zeigt Erfolge, insbesondere mit der Expansion von Petal & Pup auf große Einzelhandelsplattformen. Für das 3. Quartal 2024 erwartet das Unternehmen Nettoumsätze zwischen 141 und 145 Millionen Dollar sowie ein bereinigtes EBITDA zwischen 6,0 und 7,0 Millionen Dollar.

Positive
  • Net sales increased 9.5% to $148.9 million in Q2 2024
  • U.S. net sales grew 19.3% year-over-year
  • Active customer base increased by 11.7% on a trailing twelve-month basis
  • Adjusted EBITDA rose 44% to $8.0 million
  • Gross margin improved to 57.7% from 56.9% in Q2 2023
  • Plans to open five Princess Polly stores in 2024
  • Successful omni-channel expansion for Petal & Pup and mnml brands
Negative
  • Net loss of $2.3 million in Q2 2024
  • Selling expenses increased to 27.7% of net sales from 26.4% in Q2 2023
  • Debt increased to $106.9 million from $93.4 million at the end of fiscal year 2023
  • Cash flow used in operations was $4.2 million for the first six months of 2024

Insights

a.k.a. Brands' Q2 2024 results show positive momentum, particularly in the U.S. market. Net sales increased 9.5% year-over-year to $148.9 million, with U.S. sales up an impressive 19.3%. The company's focus on customer acquisition is paying off, with active customers growing 11.7% on a trailing twelve-month basis.

The improved financial performance is evident in the narrowed net loss of $2.3 million compared to $5.0 million in Q2 2023. Notably, Adjusted EBITDA increased 44% to $8.0 million, indicating better operational efficiency. The gross margin improvement to 57.7% from 56.9% is encouraging, despite challenges from wholesale and marketplace initiatives.

However, investors should note the increase in selling expenses as a percentage of net sales and the company's rising debt levels. The outlook for Q3 and full-year 2024 suggests continued growth, but with potential headwinds from macroeconomic pressures in Australia and New Zealand.

a.k.a. Brands' expansion strategy is noteworthy, particularly the accelerated rollout of Princess Polly stores. With five new locations planned for 2024, the company is capitalizing on the brand's popularity and exploring omnichannel opportunities. This move could enhance brand visibility and drive customer engagement.

The success of Petal & Pup's omnichannel expansion to major platforms like Nordstrom, Target and Macy's is a significant win. This not only broadens the brand's reach but also validates its appeal to a wider audience. The company's ability to leverage this success for other brands, such as mnml's test on Nordstrom.com, demonstrates a scalable strategy.

Culture Kings' continued strong performance in the U.S., coupled with new licensing deals, indicates the brand's growing traction in a key market. However, the company must navigate the challenges of inventory management and declining average order values, particularly in the Australian and New Zealand markets.

Net Sales Increased 9.5% Compared to the Second Quarter of 2023, with U.S. Net Sales Up 19.3%

Active Customer Growth of 11.7% on a Trailing Twelve-Month Basis Compared to the Second Quarter of 2023

On Track to Open Five Princess Polly Stores in 2024

SAN FRANCISCO--(BUSINESS WIRE)-- a.k.a. Brands Holding Corp. (NYSE: AKA), a brand accelerator of next generation fashion brands, today announced financial results for the quarter ended June 30, 2024.

Results for the Second Quarter

  • Net sales increased 9.5% to $148.9 million, compared to $136.0 million in the second quarter of 2023; up 10.1% on a constant currency basis1.
  • In the U.S., net sales increased 19.3% compared to the second quarter of 2023.
  • Net loss was $(2.3) million, or $(0.22) per share, in the second quarter of 2024, compared to net loss of $(5.0) million, or $(0.47) per share, in the second quarter of 2023.
  • Adjusted EBITDA2 was $8.0 million in the second quarter of 2024, compared to $5.6 million in the second quarter of 2023.

“Our second quarter results exceeded our expectations, showcasing the strength of our brands and the power of our business model. We delivered net sales growth of over 9%, driven by the momentum in our U.S. region, where net sales grew more than 19% year-over-year. Importantly, our strong top-line growth translated into adjusted EBITDA of $8.0 million, an increase of 44% compared to the same quarter last year. We continued to execute against our strategic priorities with an emphasis on our customers, and I'm very pleased that our active customer base increased by nearly 12% on a trailing twelve-month basis. Our strong second quarter results are a clear indication that demand for our brands is strong and that we have tremendous growth opportunities ahead of us,” said Ciaran Long, Interim Chief Executive Officer and Chief Financial Officer.

“I am pleased to report that in addition to three planned new Princess Polly store openings previously announced, we have signed two new leases for additional locations in Irvine and Santa Clara, California, which will bring the Princess Polly physical presence to six locations. Petal & Pup’s expanded omni-channel presence, now on Nordstrom.com, Target.com and Macys.com, far exceeded our expectations, setting the stage for continued growth and brand expansion. Leveraging Petal & Pup’s omni-channel success, our streetwear brand mnml launched a test on Nordstrom.com, and our Culture Kings U.S. business delivered another quarter of strong double-digit net sales growth on top of strong results last year.

“Executing at a high level while delivering innovative strategies to meet our customers where and when they want to shop our portfolio of brands strengthens my confidence in the many profitable future growth opportunities we see for a.k.a. Brands, particularly the tremendous whitespace we see in the U.S. to expand our brand portfolio reach and total addressable market,” concluded Long.

Brand Highlights

  • Princess Polly is on track to open stores in the Scottsdale Fashion Square and Fashion Valley Mall in San Diego in the third quarter of 2024 and stores in Boston, Santa Clara and Irvine in the fourth quarter of 2024.
  • Culture Kings U.S. registered another quarter of strong double-digit net sales growth and launched new licenses and graphics including Pokemon, WWE, NHL and Halo, with more exclusive collaborations to come in the latter half of the year.
  • Petal & Pup’s expanded omni-channel presence has far exceeded expectations, setting the stage for continued growth and brand expansion.
  • mnml continues to expand its omni-channel distribution with successful tests on Nordstrom.com and other retailers.

Second Quarter Financial Details

  • Net sales increased 9.5% to $148.9 million, compared to $136.0 million in the second quarter of 2023. The increase was driven by a 16% increase in the number of orders, due to growth in the U.S., partially offset by a decline in the average order value compared to the prior quarter, driven by adverse macroeconomic conditions in Australia and New Zealand and actions taken to improve our inventory position at Culture Kings. On a constant currency basis1, net sales increased 10%.
  • Gross margin was 57.7%, compared to 56.9% in the second quarter of 2023. The improvement was primarily driven by lower inbound air freight costs and duties, partially offset by the impact of growing wholesale initiatives, as well as growing marketplace initiatives, which have a higher return rate.
  • Selling expenses were $41.2 million, compared to $35.9 million in the second quarter of 2023. Selling expenses were 27.7% of net sales, compared to 26.4% of net sales in the second quarter of 2023. The increases were driven by the impact from growing marketplace initiatives and additional stores.
  • Marketing expenses were $18.3 million, compared to $18.4 million in the second quarter of 2023. Marketing expenses were 12.3% of net sales, compared to 13.5% of net sales in the second quarter of 2023.
  • General and administrative (“G&A”) expenses were $25.9 million, compared to $24.2 million in the second quarter of 2023. G&A expenses were 17.4% of net sales, compared to 17.8% of net sales in the second quarter of 2023. The decrease in G&A expenses as a percent of net sales during the quarter was primarily driven by higher net sales compared to the second quarter of 2023.
  • Adjusted EBITDA2 was $8.0 million, or 5.4% of net sales, compared to $5.6 million, or 4.1% of net sales, in the second quarter of 2023.

Balance Sheet and Cash Flow

  • Cash and cash equivalents at the end of the second quarter totaled $25.5 million.
  • Inventory at the end of the second quarter totaled $106.7 million, compared to $91.0 million at the end of fiscal year 2023, or compared to $106.7 million at the end of the second quarter of 2023.
  • Debt at the end of the second quarter totaled $106.9 million, compared to $93.4 million at the end of fiscal year 2023, or compared to $120.0 million at the end of the second quarter of 2023.
  • Cash flow used in operations for the six months ended June 30, 2024 was $4.2 million, compared to cash flow from operations of $7.3 million for the six months ended June 30, 2023.

Outlook

For the third quarter of 2024, the Company expects:

  • Net sales between $141 million and $145 million
  • Adjusted EBITDA3 between $6.0 million and $7.0 million
  • Weighted average diluted share count of 10.6 million

For the full year fiscal 2024, the Company now expects:

  • Net sales between $560 million and $565 million
  • Adjusted EBITDA3 between $20 million and $22 million
  • Weighted average diluted share count of 10.6 million

The above outlook is based on several assumptions, including but not limited to, foreign exchange rates remaining at the current levels, the opening of four to five Princess Polly stores and continued macroeconomic pressures, specifically in Australia and New Zealand. See “Forward-Looking Statements” for additional information.

Conference Call

A conference call to discuss the Company’s second quarter results is scheduled for August 7, 2024, 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 for international callers. 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 13747420. 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 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

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; 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.

a.k.a. BRANDS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share data)

(unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Net sales

$

148,931

 

 

$

136,028

 

 

$

265,771

 

 

$

256,513

 

Cost of sales

 

62,962

 

 

 

58,672

 

 

 

114,128

 

 

 

110,657

 

Gross profit

 

85,969

 

 

 

77,356

 

 

 

151,643

 

 

 

145,856

 

Operating expenses:

 

 

 

 

 

 

 

Selling

 

41,191

 

 

 

35,932

 

 

 

75,406

 

 

 

70,338

 

Marketing

 

18,275

 

 

 

18,354

 

 

 

33,154

 

 

 

33,131

 

General and administrative

 

25,867

 

 

 

24,191

 

 

 

48,540

 

 

 

50,059

 

Total operating expenses

 

85,333

 

 

 

78,477

 

 

 

157,100

 

 

 

153,528

 

Income (loss) from operations

 

636

 

 

 

(1,121

)

 

 

(5,457

)

 

 

(7,672

)

Other expense, net:

 

 

 

 

 

 

 

Interest expense

 

(2,676

)

 

 

(2,841

)

 

 

(4,954

)

 

 

(5,692

)

Other income (expense)

 

245

 

 

 

(750

)

 

 

(298

)

 

 

(1,784

)

Total other expense, net

 

(2,431

)

 

 

(3,591

)

 

 

(5,252

)

 

 

(7,476

)

Loss before income taxes

 

(1,795

)

 

 

(4,712

)

 

 

(10,709

)

 

 

(15,148

)

(Provision for) benefit from income tax

 

(466

)

 

 

(328

)

 

 

(485

)

 

 

555

 

Net loss

$

(2,261

)

 

$

(5,040

)

 

$

(11,194

)

 

$

(14,593

)

Net loss per share:

 

 

 

 

 

 

 

Basic and diluted*

$

(0.22

)

 

$

(0.47

)

 

$

(1.07

)

 

$

(1.36

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic and diluted*

 

10,501,057

 

 

 

10,761,511

 

 

 

10,509,810

 

 

 

10,757,470

 

 

* Adjusted for the one-for-12 reverse stock split, effective as of September 29, 2023.

a.k.a. BRANDS HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

 

June 30,
2024

 

December 31,
2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

25,466

 

 

$

21,859

 

Accounts receivable, net

 

5,778

 

 

 

4,796

 

Inventory

 

106,687

 

 

 

91,024

 

Prepaid income taxes

 

1,274

 

 

 

 

Prepaid expenses and other current assets

 

15,862

 

 

 

18,016

 

Total current assets

 

155,067

 

 

 

135,695

 

Property and equipment, net

 

25,754

 

 

 

27,154

 

Operating lease right-of-use assets

 

52,033

 

 

 

37,465

 

Intangible assets, net

 

58,521

 

 

 

64,322

 

Goodwill

 

93,604

 

 

 

94,898

 

Deferred tax assets

 

1,555

 

 

 

1,569

 

Other assets

 

2,270

 

 

 

618

 

Total assets

$

388,804

 

 

$

361,721

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

32,773

 

 

$

28,279

 

Accrued liabilities

 

29,671

 

 

 

25,223

 

Sales returns reserve

 

7,930

 

 

 

9,610

 

Deferred revenue

 

15,911

 

 

 

11,782

 

Income taxes payable

 

 

 

 

257

 

Operating lease liabilities, current

 

7,258

 

 

 

7,510

 

Current portion of long-term debt

 

6,300

 

 

 

3,300

 

Total current liabilities

 

99,843

 

 

 

85,961

 

Long-term debt

 

100,607

 

 

 

90,094

 

Operating lease liabilities

 

50,195

 

 

 

35,344

 

Other long-term liabilities

 

1,588

 

 

 

1,704

 

Total liabilities

 

252,233

 

 

 

213,103

 

Stockholders’ equity:

 

 

 

Preferred stock

 

 

 

 

 

Common stock

 

128

 

 

 

128

 

Additional paid-in capital

 

468,726

 

 

 

466,172

 

Accumulated other comprehensive loss

 

(53,676

)

 

 

(50,269

)

Accumulated deficit

 

(278,607

)

 

 

(267,413

)

Total stockholders’ equity

 

136,571

 

 

 

148,618

 

Total liabilities and stockholders’ equity

$

388,804

 

 

$

361,721

 

a.k.a. BRANDS HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Six Months Ended June 30,

 

2024

 

2023

Cash flows from operating activities:

 

 

 

Net loss

$

(11,194

)

 

$

(14,593

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

Depreciation expense

 

3,041

 

 

 

4,230

 

Amortization expense

 

5,527

 

 

 

5,931

 

Amortization of debt issuance costs

 

303

 

 

 

315

 

Lease incentives

 

 

 

 

1,186

 

Loss on disposal of businesses

 

673

 

 

 

1,533

 

Non-cash operating lease expense

 

4,085

 

 

 

3,760

 

Equity-based compensation

 

3,851

 

 

 

3,760

 

Deferred income taxes, net

 

 

 

 

3

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(914

)

 

 

896

 

Inventory

 

(18,954

)

 

 

15,511

 

Prepaid expenses and other current assets

 

2,757

 

 

 

(3,793

)

Accounts payable

 

4,874

 

 

 

350

 

Income taxes payable

 

(1,533

)

 

 

(1,179

)

Accrued liabilities

 

4,593

 

 

 

(9,117

)

Returns reserve

 

(1,568

)

 

 

2,214

 

Deferred revenue

 

4,253

 

 

 

98

 

Lease liabilities

 

(3,992

)

 

 

(3,815

)

Net cash (used in) provided by operating activities

 

(4,198

)

 

 

7,290

 

Cash flows from investing activities:

 

 

 

Purchases of intangible assets

 

(5

)

 

 

(62

)

Purchases of property and equipment

 

(2,726

)

 

 

(3,618

)

Net cash used in investing activities

 

(2,731

)

 

 

(3,680

)

Cash flows from financing activities:

 

 

 

Proceeds from line of credit, net of issuance costs

 

24,500

 

 

 

 

Repayment of line of credit

 

(10,000

)

 

 

(21,100

)

Repayment of debt

 

(1,200

)

 

 

(2,800

)

Taxes paid related to net share settlement of equity awards

 

(202

)

 

 

(66

)

Proceeds from issuances under equity-based compensation plans

 

93

 

 

 

90

 

Repurchase of shares

 

(1,189

)

 

 

(299

)

Net cash provided by (used in) financing activities

 

12,002

 

 

 

(24,175

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(1,310

)

 

 

69

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

3,763

 

 

 

(20,496

)

Cash, cash equivalents and restricted cash at beginning of period

 

24,029

 

 

 

48,373

 

Cash, cash equivalents and restricted cash at end of period

$

27,792

 

 

$

27,877

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash:

 

 

 

Cash and cash equivalents

$

25,466

 

 

$

25,876

 

Restricted cash, included in prepaid expenses and other current assets

 

582

 

 

 

2,001

 

Restricted cash, included in other assets

 

1,744

 

 

 

 

Total cash, cash equivalents and restricted cash

$

27,792

 

 

$

27,877

 

a.k.a. BRANDS HOLDING CORP.

KEY FINANCIAL AND OPERATING METRICS AND NON-GAAP MEASURES

(unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(dollars in thousands)

2024

 

2023

 

2024

 

2023

Gross margin

 

58

%

 

 

57

%

 

 

57

%

 

 

57

%

Net loss

$

(2,261

)

 

$

(5,040

)

 

$

(11,194

)

 

$

(14,593

)

Net loss margin

 

(2

)%

 

 

(4

)%

 

 

(4

)%

 

 

(6

)%

Adjusted EBITDA2

$

8,012

 

 

$

5,568

 

 

$

8,885

 

 

$

7,754

 

Adjusted EBITDA margin2

 

5

%

 

 

4

%

 

 

3

%

 

 

3

%

Key Operational Metrics and Regional Sales

 

Three Months Ended June 30,

 

 

 

Six Months Ended June 30,

 

 

(metrics in millions, except AOV; sales in thousands)

2024

 

2023

 

% Change

 

2024

 

2023

 

% Change

Key Operational Metrics

 

 

 

 

 

 

 

 

 

 

 

Active customers4

 

4.01

 

 

 

3.59

 

11.7

%

 

 

4.01

 

 

 

3.59

 

11.7

%

Average order value

$

78

 

 

$

82

 

(4.9

)%

 

$

77

 

 

$

81

 

(4.9

)%

Number of orders

 

1.92

 

 

 

1.65

 

16.4

%

 

 

3.44

 

 

 

3.15

 

9.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Sales by Region

 

 

 

 

 

 

 

 

 

 

 

U.S.

$

95,375

 

 

$

79,967

 

19.3

%

 

$

172,513

 

 

$

152,593

 

13.1

%

Australia/New Zealand

 

45,650

 

 

 

48,037

 

(5.0

)%

 

 

79,165

 

 

 

89,483

 

(11.5

)%

Rest of world

 

7,906

 

 

 

8,024

 

(1.5

)%

 

 

14,093

 

 

 

14,437

 

(2.4

)%

Total

$

148,931

 

 

$

136,028

 

9.5

%

 

$

265,771

 

 

$

256,513

 

3.6

%

Year-over-year growth on a constant currency basis1

 

10.1

%

 

 

 

 

 

 

4.7

%

 

 

 

 

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.

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 income (benefit from) 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, 2024 and 2023 is as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(dollars in thousands)

2024

 

2023

 

2024

 

2023

Net loss

$

(2,261

)

 

$

(5,040

)

 

$

(11,194

)

 

$

(14,593

)

Add (deduct):

 

 

 

 

 

 

 

Total other expense, net

 

2,431

 

 

 

3,591

 

 

 

5,252

 

 

 

7,476

 

Provision for (benefit from) income tax

 

466

 

 

 

328

 

 

 

485

 

 

 

(555

)

Depreciation and amortization expense

 

4,270

 

 

 

4,720

 

 

 

8,568

 

 

 

10,161

 

Equity-based compensation expense

 

1,895

 

 

 

1,824

 

 

 

3,851

 

 

 

3,760

 

Non-routine items5

 

1,211

 

 

 

145

 

 

 

1,923

 

 

 

1,505

 

Adjusted EBITDA

$

8,012

 

 

$

5,568

 

 

$

8,885

 

 

$

7,754

 

Net loss margin

 

(2

)%

 

 

(4

)%

 

 

(4

)%

 

 

(6

)%

Adjusted EBITDA margin

 

5

%

 

 

4

%

 

 

3

%

 

 

3

%

1 In order to provide a framework for assessing the performance of our underlying business, excluding the effects of foreign currency rate fluctuations, we compare the percent change in the results from one period to another period using a constant currency methodology wherein current and comparative prior period results for our operations reporting in currencies other than U.S. dollars are converted into U.S. dollars at constant exchange rates (i.e., the rates in effect on December 31, 2023, which was the last day of our prior fiscal year) rather than the actual exchange rates in effect during the respective periods.
2 See additional information at the end of this release regarding non-GAAP financial measures.
3 The Company has not provided a quantitative reconciliation of its Adjusted EBITDA outlook to a GAAP net income outlook because it is 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. See additional information at the end of this release regarding non-GAAP financial measures.
4 Trailing twelve months.
5 Non-routine items include severance from headcount reductions; sales tax penalties; insured losses, net of recoveries; and non-routine legal matters.

Investor Contact

investors@aka-brands.com



Media Contact

media@aka-brands.com

Source: a.k.a. Brands

FAQ

What was a.k.a. Brands' (AKA) net sales growth in Q2 2024?

a.k.a. Brands reported a 9.5% increase in net sales to $148.9 million in Q2 2024 compared to the same period in 2023.

How much did a.k.a. Brands' (AKA) U.S. net sales grow in Q2 2024?

a.k.a. Brands' U.S. net sales increased by 19.3% in Q2 2024 compared to Q2 2023.

What was a.k.a. Brands' (AKA) adjusted EBITDA for Q2 2024?

a.k.a. Brands reported an adjusted EBITDA of $8.0 million in Q2 2024, a 44% increase from $5.6 million in Q2 2023.

How many Princess Polly stores does a.k.a. Brands (AKA) plan to open in 2024?

a.k.a. Brands plans to open five Princess Polly stores in 2024, including locations in Scottsdale, San Diego, Boston, Santa Clara, and Irvine.

What is a.k.a. Brands' (AKA) net sales forecast for Q3 2024?

a.k.a. Brands expects net sales between $141 million and $145 million for Q3 2024.

a.k.a. Brands Holding Corp.

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