a.k.a. Brands swings to Q2 net loss as sales miss target

a.k.a. Brands has swung to a net loss in the second quarter of the year as its sales missed expectations, its unaudited results for the quarter ended June 30 show.

The company, whose portfolio includes Princess Polly, Petal & Pup, Rebdolls, and Culture Kings, said it expects a net loss of 4.21 million dollars in the second quarter, compared to a profit of 2.19 million dollars a year earlier.

It expects an adjusted EBITDA of 5.89 million dollars, down from 19.42 million dollars.

Meanwhile, it expects net sales of 158.5 million dollars, up 6 percent compared to the prior year, or up 11 percent at constant currency.

Chief executive Jill Ramsey told investors: “We delivered double digit revenue growth in constant currency for the second quarter on top of tremendous growth last year.”

However, she added that “growth slowed from the prior quarter and net sales missed our expectations”.

Ramsey said sales were impacted by inflationary pressures on consumers, shifts in spending, and a slower than expected recovery in Australia.

“Additionally, lower return on marketing investments, a competitive promotional environment, and higher merchandise returns led us to reduce our outlook for Adjusted EBITDA,” she said.

a.k.a. Brands will provide an outlook for the full year when it publishes its audited second-quarter results on August 10.

Ramsey continued: “Despite macro pressures, we remain encouraged by the strong growth in Active Customers as we continue to attract and retain consumers, particularly in the US.

“Although, we anticipate headwinds will continue through the remainder of the year, we expect sequential improvement in adjusted EBITDA rates as we optimize marketing investments, maintain disciplined inventory controls and tighten expenses.”