A.K.A. Brands announced on Thursday first-quarter net sales decreased 18.8% to $120.5 million, driven by a decline in the number of orders and average order value during the quarter.
The San Francisco-based company said orders were adversely affected by macroeconomic conditions, including a higher promotional environment and changes in foreign currency rates. On a constant currency basis, net sales decreased 16%, the owner of Princess Polly, Culture Kings and Mnml said.
“I’m proud of our solid first quarter performance, which exceeded our expectations on both sales and adjusted EBITDA, driven by the strong execution across our brands and our continued focus on managing the business prudently,” said Ciaran Long, interim chief executive officer and chief financial officer of A.K.A. Brands.
“Thanks to the hard work of our teams, we advanced our strategic initiatives, while simultaneously improving operating efficiencies across the business. We are setting the stage for improved operating performance as the year progresses. I’m particularly pleased with the incremental pay down of our debt in the quarter and our diligent approach to managing inventory. Our inventory balance is down 11% from the end of fiscal 2022 and down 7% from the first quarter last year.”
For the three months ending March 31, the company swung to a net loss of $9.6 million or $0.07 per share, compared to net income of $1.5 million or $0.01 per share.
“As we look ahead, we believe that key to building durable next-generation brands is to be everywhere our customers are. While direct to consumer remains our priority, we are excited by the initial results of our omni-channel initiatives across our brands. Princess Polly had a successful wholesale pilot launch with PacSun in March, and Princess Polly will open its first brick and mortar location in the third quarter. We are also very pleased with the launch of Petal & Pup on Target’s marketplace. We remain laser focused on our growth initiatives, as well as strengthening our balance sheet. We are confident in our ability to deliver both growth and profit over the long-term, and plan to continue to pay down our debt as the year progresses,” concluded Long.
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