a.k.a. Brands (AKA) Q4 2022 earnings summary

Executive summary

• Net sales rose 9% YoY to $611.7M; a $173.8M non-cash goodwill impairment contributed to a $176.7M net loss. Adjusted EBITDA was $31.9M.

• Active customers reached 3.8M, up 3% YoY; orders increased 14% to 7.4M, while average order value fell 5% to $82.

Financial highlights

• Gross profit increased 10% YoY to $337.2M; gross margin held at 55%.

• Operating loss was $172.0M, including the $173.8M goodwill impairment; 2021 operating income was $16.4M.

• Selling expenses rose 15% to $166.1M, marketing rose 15% to $66.7M, and G&A rose 16% to $102.7M.

• Net cash used in operating activities was $0.3M; free cash flow was negative $20.1M, versus positive $16.2M in 2021.

Outlook and guidance

• 2023 priorities include organic growth, product-category expansion, customer loyalty, efficiency improvements and stronger balance-sheet capacity for reinvestment.

• Piloting selective wholesale partnerships, beginning with Princess Polly and PacSun, and a Princess Polly store in Southern California in H2 2023.

• Planned 2023 capital expenditures of $8M–$10M for infrastructure, technology and store openings.

• Lower air-freight costs experienced in H2 2022 were expected to flow through cost of goods sold in 2023.