Digital Brands Group (DBGI) Q1 2026 earnings summary

Executive summary

• Net revenues for Q1 2026 were $1.3 million, down from $1.9 million in Q1 2025, primarily due to lower wholesale activity, partially offset by direct-to-consumer investments.

• Net loss increased to $11.4 million from $2.1 million year-over-year, driven by a $3.9 million non-cash charge for share-based payment liability, higher sales and marketing expenses, and lower gross profit.

• The company expanded its collegiate apparel and marketing platform, entering new agreements and launching additional partnerships.

Financial highlights

• Gross profit fell to $45,381 from $872,455 year-over-year, with gross margin compressing to 3% from 47%.

• Operating expenses rose to $7.5 million from $2.9 million, mainly due to increased sales and marketing amortization from new NIL agreements.

• Other expense was $4.0 million, up from $0.1 million, largely due to the fair value change in share-based payment liabilities.

• Cash used in operating activities was $4.7 million, compared to $4.5 million in the prior year.

• Cash provided by financing activities was $2.4 million, down from $6.6 million in Q1 2025.

Outlook and guidance

• Management expects revenue growth in subsequent periods from expanded NIL and licensing partnerships.

• Gross margins are expected to recover as revenues increase, leveraging fixed costs and a higher mix of e-commerce revenue.

• Liquidity is expected to be sufficient for at least twelve months, supported by cost reductions, anticipated revenues, and potential equity or debt financings.