A.K.A. Brands Holding Corp., which bills its business as a “portfolio of next-generation fashion brands,” reported net sales for the 2025 first quarter increased 10.1 percent to $128.7 million, compared to $116.8 million in the 2024 first quarter, and increasing 12.3 percent on a constant-currency (cc) basis. The company noted in a media release that the increase was driven by a 9.2 percent bump in orders, primarily due to growth in the U.S.

In the U.S., first-quarter net sales increased 14.2 percent compared to the 2024 first quarter.

“Importantly, the Australia and New Zealand region registered 6 percent net sales growth in the quarter, reflecting the progress we’ve made over the past two years, particularly at the Culture Kings brand, to strengthen the business,” company CEO Ciaran Long said. “And rounding out the quarter, benefiting from the strong top-line growth and healthy gross margin, we exceeded our expectations and delivered $2.7 million of adjusted EBITDA.”

Long offered that the company “continued to deepen customer engagement in the first quarter, achieving nearly 8 percent growth in its active customer base over the trailing twelve months, to be a clear indication of the strong demand for its portfolio of brands that includes Culture Kings, Princess Polly, Petal and Pup, and MNML.

“Our omni-channel expansion plans are also on track and exceeding expectations,” Long continued. “Princess Polly opened its seventh store during the first quarter in Soho, which was our strongest opening to date, and plans to open six additional stores this year, bringing the total to 13 by year-end. The existing store fleet continues to outperform our revenue expectations, while also creating a halo effect on surrounding online markets. In addition, we are encouraged by the early reads from Princess Polly and Petal & Pup’s wholesale debuts across Nordstrom’s entire store fleet.”

Income Statement Summary
Gross margin was 57.2 percent of net sales in Q1, compared to 56.2 percent in the 2024 first quarter. The improvement was primarily driven by more full-price selling and an improved inventory position, partially offset by growing wholesale initiatives.

Selling expenses were $38.2 million in Q1, compared to $34.2 million in the 2024 first quarter. Selling expenses were 29.7 percent of net sales, compared to 29.3 percent in the 2024 first quarter. The impact of opening additional stores drove the increases.

Marketing expenses were $15.2 million, or 11.8 percent of net sales, in the quarter, compared to $14.9 million, or 12.7 percent of net sales, in the 2024 first quarter.

General and administrative (G&A) expenses were $25.7 million, or 20.0 percent of net sales, for the period, compared to $22.7 million, or 19.4 percent of net sales, in the 2024 first quarter. The increase in G&A expenses, as a percent of net sales during the quarter, was primarily driven by increased wages and incentive compensation.

Adjusted EBITDA was $2.7 million, or 2.1 percent of net sales, compared to $0.9 million, or 0.7 percent of net sales, in the 2024 first quarter.

The net loss for the first quarter was $8.4 million, or a loss of 78 cents per share, in the first quarter, compared to a net loss of $8.9 million, or a loss of 85 cents per share, in the 2024 first quarter.

Adjusted EBITDA was $2.7 million in the first quarter, compared to $0.9 million in the 2024 first quarter.

“We delivered a strong start to the year, with outstanding first-quarter performance driven by our team’s disciplined execution across our brands. This marks our fourth consecutive quarter of growth, underscoring the effectiveness of our strategic initiatives,” said Long.

Balance Sheet and Cash Flow
Cash and cash equivalents at the end of the first quarter totaled $26.7 million, compared to $24.2 million at the end of fiscal year 2024.

Inventory at the end of the first quarter totaled $94.4 million, compared to $95.8 million at the end of fiscal year 2024 and $91.5 million at the end of the 2024 first quarter.

Debt at the end of the first quarter totaled $119.9 million, compared to $111.7 million at the end of fiscal year 2024 and $103.6 million at the end of the 2024 first quarter. The increase in debt at the end of the first quarter of 2025 was primarily due to the investment in new Princess Polly stores in the U.S.

Cash flow used in operations for the three months ended March 31, 2025, was $1.9 million, compared to cash flow used in operations of $7.7 million for the three months ended March 31, 2024.

Outlook
For the second quarter of 2025, the company expects:

  • Net sales between $154 million and $158 million;
  • Adjusted EBITDA between $7.0 million and $8.0 million; and
  • Weighted average diluted share count of 10.7 million.

For the full fiscal 2025 year, the company now expects:

  • Net sales between $600 million and $610 million;
  • Adjusted EBITDA between $24.0 million and $27.5 million;
  • Weighted average diluted share count of 10.8 million; and
  • Capital expenditures of approximately $12 million to $14 million.

The company said the published outlook contemplates the estimated impact of tariffs enacted during 2025.

“As we approach the evolving trade environment impacting our U.S. business, we are confident that our strategic actions, swift execution and flexible business model will enable us to navigate this period and emerge even stronger,” Lang concluded. “Importantly, we continue to see solid demand trends in the first six weeks of the second quarter, in line with our outlook for the year. We’re committed to building durable fashion brands for the long-term, and we believe the power of our operating model and actions will enhance our agility, resilience and long-term competitiveness.”

Image courtesy Culture Kings Las Vegas/A.K.A. Brands Holding Corp.