a.k.a. Brands (AKA) Q3 2024 earnings summary

Executive summary

• Net sales rose 6.4% year-over-year to $150 million in Q3 2024, with U.S. net sales up 19.5% to $100.2 million, marking the fifth consecutive quarter of U.S. growth.

• Net loss narrowed significantly to $5.4 million from $70.4 million in Q3 2023, reflecting the absence of goodwill impairment charges.

• Adjusted EBITDA increased 75% year-over-year to $8.2 million, with margin rising to 5.5%.

• Active customer base grew 14% year-over-year to 4.05 million, with strong traction across new and existing customers.

• Omnichannel expansion advanced, with Princess Polly opening three new stores and Petal & Pup expanding into 40 Nordstrom locations.

Financial highlights

• Gross margin improved to 58% from 55.4% in Q3 2023, driven by more full-price selling and better inventory management.

• Adjusted EBITDA rose to $8.2 million from $4.7 million, with margin up to 5.5% from 3.3%.

• Total orders grew 6.4% to 1.84 million; average order value remained flat at $81.

• Ended Q3 with $23.1 million in cash, $111.9 million in debt, and $106 million in inventory (up 6% year-over-year).

• Net loss margin improved to (3.6)% from (50.0)% in Q3 2023.

Outlook and guidance

• Raised full-year 2024 outlook: net sales expected between $567–$572 million.

• Adjusted EBITDA forecasted between $22–$23 million; capital expenditures of $10–$12 million expected.

• Anticipates gross margin of approximately 57%, selling expenses at 27% of net sales, and marketing expenses at 12.5%.

• Guidance assumes stable FX rates, three new Princess Polly stores in Q4, and ongoing macroeconomic pressures in Australia and New Zealand.