Luvu Brands (LUVU) investor relations material

Executive summary

• Net sales for Q3 FY26 increased 12% year-over-year to $6.55 million, with nine-month sales up 2.6% to $19.27 million.

• Quarterly net income was $174,000, reversing a net loss of $88,000 in the prior year quarter; nine-month net loss was $724,000, primarily due to a $764,000 deferred tax liability from a new lease.

• Adjusted EBITDA for Q3 was $317,000, up from $116,000 a year ago; nine-month Adjusted EBITDA was $688,000.

• Operating cash flow for the nine-month period exceeded $690,000, more than tripling year-over-year.

• Direct-to-consumer sales grew 19.5% in the quarter, while wholesale sales rose 8.4% but declined 1% over nine months due to international competition.

Financial highlights

• Gross margin was 28% for the quarter and 27% for the nine months, stable year-over-year despite higher shipping and tariff costs.

• Operating expenses were 25% of net sales for the quarter, down from 27% in the prior year, reflecting cost controls.

• Operating income improved to $227,000 from breakeven in the prior-year quarter.

• Cash and cash equivalents increased to $1.23 million as of March 31, 2026, up 67.3% year-over-year.

• Gross profit for Q3 was $1.84 million, up from $1.60 million.

Outlook and guidance

• Management expects continued sales growth through expanded distribution, marketing focus, and reinvestment in high-margin products and automation.

• Ongoing risks from tariffs and international competition are noted.

• The company is evaluating potential refunds following a Supreme Court ruling against certain tariffs.

• Continued emphasis on strengthening the balance sheet and optimizing working capital.