Luvu Brands (LUVU) investor relations material

Executive summary

• Net sales for the quarter ended September 30, 2025, increased 1.5% year-over-year to $5.84 million, driven by an 11% rise in direct-to-consumer sales and supported by tighter cost controls and refined sourcing, partially offset by a 3% decline in wholesale sales due to increased competition from international manufacturers.

• Gross profit margin improved to 28.4% from 26.3% in the prior year, attributed to lower raw material costs, renegotiated vendor contracts, and supplier diversification.

• Net loss narrowed to $131,000 from $210,000 year-over-year, as higher gross profit offset increased operating and interest expenses.

• Adjusted EBITDA was $82,000, turning positive from a $4,000 loss in the prior year.

• Operational focus included increased inventory to $3.81 million to support seasonal demand and new product launches.

Financial highlights

• Gross profit rose to $1.66 million from $1.52 million year-over-year.

• Operating expenses were $1.67 million (29% of sales), up from $1.64 million (28% of sales) in the prior year.

• Cash and cash equivalents increased to $818,000 from $735,000 at the prior quarter end.

• Net cash provided by operating activities was $80,000, down from $132,000 in the prior year.

• Inventory increased to $3.81 million to support demand and product launches.

Outlook and guidance

• Management anticipates continued quarterly fluctuations due to seasonality, competition, and raw material costs.

• Strategic priorities include expanding distribution channels, launching new products, and improving manufacturing efficiency to drive long-term growth.

• Continued focus on margin improvement, operational discipline, and resilience against economic uncertainty.

• Tariff risks and potential price increases may impact future demand and margins.