a.k.a. Brands (AKA) Q2 2024 earnings summary

Executive summary

• Net sales grew 9.5% year-over-year to $148.9 million in Q2 2024, with U.S. net sales up 19.3% and accounting for 64% of total sales.

• Adjusted EBITDA rose 44% to $8.0 million, with margin improving to 5.4%, reflecting strong gross margin expansion and improved marketing efficiency.

• Net loss narrowed to $2.3 million from $5.0 million in Q2 2023, with net loss margin improving to (2%) from (4%).

• Active customers increased 11.7% year-over-year to 4.01 million, with 180,000 new customers added in Q2.

• Strong omni-channel and marketplace expansion, including new Princess Polly stores and Petal & Pup's launches on major retail platforms.

Financial highlights

• Gross margin improved to 58% from 57% year-over-year, driven by lower air freight costs and strong full-price selling.

• Selling expenses rose to $41.2 million (27.7% of net sales), up from $35.9 million (26.4%) due to marketplace and store growth.

• Marketing expenses leveraged to 12.3% of net sales, down from 13.5% last year.

• Cash and equivalents at quarter-end were $25.5 million; debt totaled $106.9 million.

• Average order value was $78, down 4.9% year-over-year due to regional sales mix and inventory actions.

Outlook and guidance

• Full-year 2024 net sales expected between $560 million and $565 million; Adjusted EBITDA projected at $20–$22 million.

• Q3 2024 net sales expected between $141 million and $145 million; Adjusted EBITDA between $6.0 million and $7.0 million.

• Gross margin guidance of 56%-58%; selling expenses ~27% of net sales; marketing expenses ~12.5%.

• Capital expenditures for 2024 expected between $12–$14 million; effective tax rate of 10%.

• Guidance assumes stable FX rates, 4–5 Princess Polly store openings, and continued macroeconomic pressures in Australia and New Zealand.