a.k.a. Brands (AKA) investor relations material

Executive summary

• Net sales for Q1 2026 reached $132.5 million, up 3% year-over-year, with active customers up 3.1% and Adjusted EBITDA more than doubling to $5.1 million, both ahead of expectations.

• Gross margin expanded to 63.1% from 57.2% year-over-year, driven by improved inventory discipline, full-price selling, and a $16.5 million benefit from tariff refunds, partially offset by a $12 million streetwear inventory write-down.

• Net loss narrowed to $7.1 million from $8.4 million in Q1 2025, with net loss margin improving to (5%).

• Strategic initiatives, including omni-channel expansion, inventory reduction, sourcing diversification, and AI investments, are delivering measurable financial improvements.

• The business benefited from a $25.8 million IEEPA tariff refund receivable following a Supreme Court decision, with $6.4 million received post-quarter end and $12 million in legacy streetwear inventory written off as a one-time charge.

Financial highlights

• Adjusted EBITDA increased to $5.1 million from $2.7 million a year ago; margin improved to 3.9% from 2.1%.

• Gross margin, excluding one-time items, expanded to 59% from 57.2% year-over-year; reported gross margin was 63.1%.

• Inventory ended at $67.7 million, down 28% from $94.4 million a year ago, reflecting improved discipline and a strategic write-off.

• Cash and cash equivalents at quarter-end were $12.9 million; total debt at quarter-end was $109.6 million, down from $119.9 million a year ago.

• Trailing twelve-month active customers (excluding wholesale) increased 3.1% to 4.26 million; average order value was $77.

Outlook and guidance

• Fiscal 2026 net sales expected between $625 million–$635 million; Adjusted EBITDA between $30 million–$32 million; CapEx projected at $18–$20 million.

• Q2 2026 net sales guidance is $160 million–$164 million, with Adjusted EBITDA of $8.5 million–$9 million and gross margin around 60%.

• Guidance assumes current tariff rates due to ongoing uncertainty.

• Management expects sufficient liquidity for the next 12 months, supported by cash, operations, and credit facilities.

• Remediation of material weaknesses in internal controls is targeted for completion by year-end 2026.