Digital Brands Group Reports Third Quarter 2024 Financial Results
Digital Brands Group (DBGI) reported Q3 2024 financial results with net revenues of $2.4 million, down from $3.3 million year-over-year. The company's gross profit margins decreased to 46.0% from 52.3%. G&A expenses decreased by $1.3 million to $2.4 million, including $1.6 million in non-cash expenses. The net loss was $3.5 million, improved from $5.4 million last year. The company expects to benefit from over $4.5 million in earnings from concluding amortized non-cash expenses by end of 2024. DBGI has partnered with VAYNERCOMMERCE to drive digital revenue and plans new initiatives including digital channels expansion, content creation, and influencer partnerships.
Digital Brands Group (DBGI) ha riportato i risultati finanziari del terzo trimestre 2024 con ricavi netti di 2,4 milioni di dollari, in calo rispetto ai 3,3 milioni dell'anno precedente. I margini di profitto lordo sono scesi al 46,0% rispetto al 52,3%. Le spese generali e amministrative sono diminuite di 1,3 milioni di dollari, arrivando a 2,4 milioni, comprese spese non monetarie per 1,6 milioni. La perdita netta è stata di 3,5 milioni di dollari, un miglioramento rispetto ai 5,4 milioni dello scorso anno. L'azienda prevede di beneficiare di oltre 4,5 milioni di dollari in guadagni dalla conclusione delle spese non monetarie ammortizzate entro la fine del 2024. DBGI ha stretto una partnership con VAYNERCOMMERCE per aumentare i ricavi digitali e pianifica nuove iniziative tra cui l'espansione dei canali digitali, la creazione di contenuti e collaborazioni con influencer.
Digital Brands Group (DBGI) informó los resultados financieros del tercer trimestre de 2024 con ingresos netos de 2,4 millones de dólares, una disminución respecto a los 3,3 millones del año anterior. Los márgenes de utilidad bruta disminuyeron al 46,0% desde el 52,3%. Los gastos generales y administrativos se redujeron en 1,3 millones de dólares, alcanzando los 2,4 millones, incluyendo 1,6 millones en gastos no monetarios. La pérdida neta fue de 3,5 millones de dólares, mejorando con respecto a los 5,4 millones del año pasado. La compañía espera beneficiarse de más de 4,5 millones de dólares en ganancias al concluir las expensas no monetarias amortizadas para finales de 2024. DBGI se ha asociado con VAYNERCOMMERCE para impulsar los ingresos digitales y planea nuevas iniciativas que incluyen la expansión de canales digitales, la creación de contenido y alianzas con influencers.
디지털 브랜드 그룹 (DBGI)는 2024년 3분기 재무 결과를 보고했으며, 순수익은 240만 달러로, 지난해 330만 달러에서 감소했습니다. 총 이익률은 52.3%에서 46.0%로 감소했습니다. 일반 관리비는 130만 달러 감소하여 240만 달러에 달하며, 이 중 160만 달러는 비현금 비용입니다. 순손실은 350만 달러로, 지난해 540만 달러에서 개선되었습니다. 회사는 2024년 말까지 비현금 비용을 상각함으로써 450만 달러 이상의 수익을 얻을 것으로 기대하고 있습니다. DBGI는 디지털 수익을 촉진하기 위해 VAYNERCOMMERCE와 파트너십을 맺었으며, 디지털 채널 확장, 콘텐츠 제작 및 인플루언서 파트너십을 포함한 새로운 이니셔티브를 계획하고 있습니다.
Digital Brands Group (DBGI) a annoncé les résultats financiers du troisième trimestre 2024 avec des revenus nets de 2,4 millions de dollars, en baisse par rapport à 3,3 millions de dollars l'année précédente. Les marges bénéficiaires brutes ont diminué à 46,0% contre 52,3%. Les dépenses générales et administratives ont diminué de 1,3 million de dollars pour atteindre 2,4 millions de dollars, dont 1,6 million de dollars en dépenses non monétaires. La perte nette s'élève à 3,5 millions de dollars, améliorée par rapport à 5,4 millions de dollars l'année dernière. L'entreprise s'attend à bénéficier de plus de 4,5 millions de dollars de revenus provenant de la conclusion des dépenses non monétaires amorties d'ici la fin de 2024. DBGI s'est associé à VAYNERCOMMERCE pour stimuler les revenus numériques et prévoit de nouvelles initiatives, notamment l'expansion des canaux numériques, la création de contenu et des partenariats avec des influenceurs.
Digital Brands Group (DBGI) hat die Finanzzahlen für das dritte Quartal 2024 veröffentlicht, mit Nettoeinnahmen von 2,4 Millionen Dollar, ein Rückgang von 3,3 Millionen Dollar im Vergleich zum Vorjahr. Die Bruttogewinnmargen sind auf 46,0% von 52,3% gesunken. Die allgemeinen und Verwaltungskosten sanken um 1,3 Millionen Dollar auf 2,4 Millionen Dollar, inklusive 1,6 Millionen Dollar an nicht liquiditätswirksamen Aufwendungen. Der Nettoverlust betrug 3,5 Millionen Dollar, eine Verbesserung gegenüber 5,4 Millionen Dollar im Vorjahr. Das Unternehmen erwartet, bis Ende 2024 von über 4,5 Millionen Dollar an Erträgen aus dem Abschluss der amortisierten nicht liquiditätswirksamen Aufwendungen zu profitieren. DBGI hat sich mit VAYNERCOMMERCE zusammengeschlossen, um den digitalen Umsatz zu steigern, und plant neue Initiativen, darunter die Erweiterung digitaler Kanäle, die Erstellung von Inhalten und Partnerschaften mit Influencern.
- G&A expenses reduced by $1.3 million year-over-year
- Net loss improved from $5.4M to $3.5M
- Interest expenses expected to decline to $105,000 quarterly in 2025
- Expected $4.5M earnings benefit from concluding amortized expenses
- Sales and marketing expense ratio improved from 35.3% to 26.9%
- Net revenues declined 27% to $2.4M from $3.3M year-over-year
- Gross profit margins decreased to 46.0% from 52.3%
- Gross profit declined to $1.1M from $1.7M
- digital advertising spend impacting e-commerce revenue
- Net loss of $3.5M despite improvements
Insights
The Q3 results reveal concerning trends with
The partnership with VAYNERCOMMERCE and planned digital initiatives could help reverse the declining revenue trend, but the micro-cap status (
Austin, TX, Nov. 14, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. (“DBG”) (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its third quarter ended September 30, 2024.
“Our third quarter was the last quarter we significantly focused on paying down debt and liabilities given the soft macro economy and the overhang of the election. Starting in October this year, we transitioned from cleaning up the balance sheet to focusing on increasing top line growth. As we stated in our press release yesterday, we partnered with VAYNERCOMMERCE to drive digital revenue, which we announced is already working”.
“This was the first step in a multi-step growth strategy, coupled with the launch of AVO. New initiatives include investing in other digital channels and platforms, content creation, influencer partnerships, and monthly limited-edition capsules of online only products with special pricing, fabrics and designs. ”
“In addition to this, the Company will also benefit by an increase of over
Results for the Third Quarter
- Net revenues were
$2.4 million compared to$3.3 million a year ago- The majority of the decline in revenue is associated with the Company dropping its largest wholesale account due to single-digit gross margins before the required additional expenses to manage the account.
- This account was net negative in cash contribution. So while we lost revenue, we increased profitability
- Net revenues were negatively impacted by limited digital advertising spend, which resulted in low e-commerce revenue
- Gross profit margins were
46.0% compared to52.3% a year ago- The biggest factor in the decline is the fixed costs associated with gross margins including warehouse rent and labor expenses, pattern makers and sewers expenses and some design members expenses
- Gross profit margins were negatively impacted by lower digital revenue associated with limited digital advertising revenue in the quarter
- Gross profit was
$1.1 million compared to$1.7 million a year ago
- G&A expenses decreased
$1.3 million to$2.4 million compared to$3.7 million a year ago- G&A included
$1.6 million in non-cash expenses - G&A expenses declined sequentially by over
$500,000 from Q2 2024
- G&A included
- Sales & Marketing expenses were
$655,000 compared to$1.2 million a year ago- Sales and marketing expenses ratio was
26.9% compared to35.3% a year ago - The majority of the sales and marketing expense was the marketing team
- We have outsourced our sales and marketing to VAYNERCOMMERCE
- Sales and marketing expenses ratio was
- Net loss was
$3.5 million compared to a net loss of$5.4 million a year ago, which includes$1.6M in non-cash expenses- Starting in Q1 next year, interest expenses will decline to
$105,000 a quarter due to the completion of the amortization at year end - This amortization change in our interest expense will result in a benefit of approximately
$3.1 million to our net earnings in fiscal 2025
- Starting in Q1 next year, interest expenses will decline to
- Net loss per diluted share was
$1.63 per diluted share compared to a net loss per diluted share of$14.55 a year ago
Conference Call and Webcast Details Updated
Management will host a conference call on Thursday, November 14, 2024 at 5:00 p.m. ET to discuss the results. The live conference call can be accessed by dialing 877-545-0523 from the U.S. or internationally. The conference I.D. code is 288336 or referencing Digital Brands or via the web by using the following link: https://www.webcaster4.com/Webcast/Page/3044/51655
Forward-looking Statements
Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting DBG and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as “will,” “anticipate,” “estimate,” “expect,” “should,” and “may” and other words and terms of similar meaning or use of future dates, however, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding DBG’s plans, objectives, projections and expectations relating to DBG’s operations or financial performance, and assumptions related thereto are forward-looking statements. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. DBG undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Potential risks and uncertainties that could cause the actual results of operations or financial condition of DBG to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks arising from the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic; the level of consumer demand for apparel and accessories; disruption to DBGs distribution system; the financial strength of DBG’s customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; DBG’s response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; intense competition from online retailers; manufacturing and product innovation; increasing pressure on margins; DBG’s ability to implement its business strategy; DBG’s ability to grow its wholesale and direct-to-consumer businesses; retail industry changes and challenges; DBG’s and its vendors’ ability to maintain the strength and security of information technology systems; the risk that DBG’s facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; DBG’s ability to properly collect, use, manage and secure consumer and employee data; stability of DBG’s manufacturing facilities and foreign suppliers; continued use by DBG’s suppliers of ethical business practices; DBG’s ability to accurately forecast demand for products; continuity of members of DBG’s management; DBG’s ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; DBG’s ability to execute and integrate acquisitions; changes in tax laws and liabilities; legal, regulatory, political and economic risks; adverse or unexpected weather conditions; DBG's indebtedness and its ability to obtain financing on favorable terms, if needed, could prevent DBG from fulfilling its financial obligations; and climate change and increased focus on sustainability issues. More information on potential factors that could affect DBG’s financial results is included from time to time in DBG’s public reports filed with the SEC, including DBG’s Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q, and Forms 8-K filed or furnished with the SEC.
DIGITAL BRANDS GROUP, INC
STATEMENT OF OPERATIONS
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September, 30 | September, 30 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net revenues | $ | 2,440,801 | $ | 3,257,332 | $ | 9,413,457 | $ | 12,127,135 | ||||||||
| Cost of net revenues | 1,319,214 | 1,554,044 | 5,012,457 | 6,094,532 | ||||||||||||
| Gross profit | 1,121,587 | 1,703,288 | 4,401,000 | 6,032,603 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 2,429,040 | 3,735,527 | 6,347,460 | 12,115,590 | ||||||||||||
| Sales and marketing | 655,833 | 1,151,377 | 1,979,173 | 3,188,054 | ||||||||||||
| Distribution | 180,879 | 238,546 | 745,412 | 750,945 | ||||||||||||
| Impairment of intangible assets | 600,000 | - | 600,000 | - | ||||||||||||
| Change in fair value of contingent considerartion | - | - | - | (10,698,475 | ) | |||||||||||
| Total operating expenses | 3,865,752 | 5,125,450 | 9,672,045 | 5,356,114 | ||||||||||||
| Income (loss) from operations | (2,744,165 | ) | (3,422,162 | ) | (5,271,045 | ) | 676,489 | |||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (742,557 | ) | (1,956,080 | ) | (2,487,172 | ) | (4,907,567 | ) | ||||||||
| Other non-operating income (expenses) | (54,515 | ) | (57,752 | ) | 22,765 | (734,501 | ) | |||||||||
| Total other income (expense), net | (797,072 | ) | (2,013,832 | ) | (2,464,407 | ) | (5,642,068 | ) | ||||||||
| Income tax benefit (provision) | - | - | - | - | ||||||||||||
| Net income (loss) from continuing operations | (3,541,237 | ) | (5,435,994 | ) | (7,735,452 | ) | (4,965,579 | ) | ||||||||
| (Loss) from discontinued operations, net of tax | - | - | - | (1,562,503 | ) | |||||||||||
| Net income (loss) | $ | (3,541,237 | ) | $ | (5,435,994 | ) | $ | (7,735,452 | ) | $ | (6,528,082 | ) | ||||
| Weighted average common shares outstanding - basic and diluted | 2,171,823 | 373,498 | 2,061,252 | 283,678 | ||||||||||||
| Net loss per common share - basic and diluted | $ | (1.63 | ) | $ | (14.55 | ) | $ | (3.75 | ) | $ | (17.50 | ) | ||||
The accompanying notes are an integral part of these financial statements.
DIGITAL BRANDS GROUP, INC
STATEMENTS OF CASH FLOW
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (7,735,452 | ) | $ | (6,528,082 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 2,057,638 | 2,485,166 | ||||||
| Amortization of loan discount and fees | 2,220,549 | 1,956,355 | ||||||
| Impairment of intangible assets | 600,000 | - | ||||||
| Loss on extinguishment of debt | - | 689,100 | ||||||
| Loss on disposition of bussiness | - | 1,523,940 | ||||||
| Stock-based compensation | 169,262 | 308,511 | ||||||
| Shares issued for services | 312,634 | 1,656,417 | ||||||
| Change in credit reserve | (151,611 | ) | 354,282 | |||||
| Change in fair value of contigent consideration | - | (10,698,475 | ) | |||||
| Discontinued operation | - | 7,666 | ||||||
| Non-cash lease expense | 817,077 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (201,501 | ) | 153,479 | |||||
| Due from factor | 51,153 | 72,220 | ||||||
| Inventory | (190,918 | ) | 514,955 | |||||
| Prepaid expenses and other current assets | (76,637 | ) | (366,615 | ) | ||||
| Accounts payable | (1,287,018 | ) | 182,242 | |||||
| Accrued expenses and other liabilities | 477,945 | 1,088,763 | ||||||
| Deferred revenue | - | (183,782 | ) | |||||
| Accrued interest payable | 106,701 | 326,219 | ||||||
| Due to related parties | 26,909 | |||||||
| Lease liabilities | (490,000 | ) | - | |||||
| Net cash used in operating activities | (3,293,269 | ) | (6,457,639 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Cash disposed | - | (18,192 | ) | |||||
| Purchase of property, equipment and software | (23,801 | ) | (27,855 | ) | ||||
| Deposits | (77,280 | ) | 87,378 | |||||
| Net cash provided by (used in) investing activities | (101,081 | ) | 41,331 | |||||
| Cash flows from financing activities: | ||||||||
| Repayments from related party advances | (218,967 | ) | ||||||
| Advances from factor | - | 154,073 | ||||||
| Issuance of loans and note payable | 790,977 | 5,799,989 | ||||||
| Repayments of convertible notes and loan payable | (2,484,248 | ) | (8,840,092 | ) | ||||
| Insurance for common stock for cash | 5,356,194 | - | ||||||
| Exercise of Warrants | - | 1,167,566 | ||||||
| Issuance of common stock in public offering | - | 10,000,003 | ||||||
| Offering costs | - | (1,854,622 | ) | |||||
| Net cash provided by financing activities | 3,662,923 | 6,207,950 | ||||||
| Net change in cash and cash equivalents | 268,573 | (208,357 | ) | |||||
| Cash and cash equivalents at beginning of period | 20,773 | 1,275,616 | ||||||
| Cash and cash equivalents at end of period | $ | 289,346 | $ | 1,067,259 | ||||
The accompanying notes are an integral part of these financial statements.
DIGITAL BRANDS GROUP, INC
STATEMENT OF BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 289,346 | $ | 20,773 | ||||
| Accounts receivable, net | 276,334 | 74,833 | ||||||
| Due from factor, net | 438,269 | 337,811 | ||||||
| Inventory | 5,040,518 | 4,849,600 | ||||||
| Prepaid expenses and other current assets | 353,307 | 276,670 | ||||||
| Total current assets | 6,397,774 | 5,559,687 | ||||||
| Property, equipment and software, net | 79,310 | 55,509 | ||||||
| Goodwill | 8,973,501 | 8,973,501 | ||||||
| Intangible assets, net | 7,324,579 | 9,982,217 | ||||||
| Deposits | 152,711 | 75,431 | ||||||
| Right of use asset | 365,246 | 689,688 | ||||||
| Total assets | $ | 23,293,121 | $ | 25,336,033 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 6,251,884 | $ | 7,538,902 | ||||
| Accrued expenses and other liabilities | 5,236,437 | 4,758,492 | ||||||
| Due to related parties | 426,921 | 400,012 | ||||||
| Convertible note payable, net | 100,000 | 100,000 | ||||||
| Accrued interest payable | 2,053,102 | 1,996,753 | ||||||
| Loan payable, current | 2,743,508 | 2,325,842 | ||||||
| Promissory note payable, net | 4,730,740 | 4,884,592 | ||||||
| Right of use liability, current portion | 899,726 | 1,210,814 | ||||||
| Total current liabilities | 22,442,318 | 23,215,407 | ||||||
| Loan payable | 150,000 | 150,000 | ||||||
| Right of use liability, non current portion | 313,723 | - | ||||||
| Deferred tax liability | 368,034 | 368,034 | ||||||
| Total liabilities | 23,274,075 | 23,733,441 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Undesignated preferred stock, | - | |||||||
| Series A convertible preferred stock, | 1 | 1 | ||||||
| Series C convertible preferred stock, | 1 | 1 | ||||||
| Common stock, | 373 | 110 | ||||||
| Additional paid-in capital | 121,748,573 | 115,596,929 | ||||||
| Accumulated deficit | (121,729,902 | ) | (113,994,449 | ) | ||||
| Total stockholders' equity | 19,046 | 1,602,592 | ||||||
| Total liabilities and stockholders' equity | $ | 23,293,121 | $ | 25,336,033 | ||||
The accompanying notes are an integral part of these financial statements.
About Digital Brands Group
We offer a wide variety of apparel through numerous brands on a both direct-to-consumer and wholesale basis. We have created a business model derived from our founding as a digitally native-first vertical brand. We focus on owning the customer's "closet share" by leveraging their data and purchase history to create personalized targeted content and looks for that specific customer cohort.
Digital Brands Group, Inc. Company Contact
Hil Davis, CEO
Email: invest@digitalbrandsgroup.co
Phone: (800) 593-1047
SOURCE Digital Brands Group, Inc.
Related Links
https://www.digitalbrandsgroup.co
https://ir.digitalbrandsgroup.co
FAQ
What was Digital Brands Group's (DBGI) revenue in Q3 2024?
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