a.k.a. Brands Holding Corp. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales increased 9.7% year-over-year to $161.3 million for the quarter ended September 30, 2026, compared to $147.1 million in Q3 2025, driven by a 12.8% increase in the number of orders.
• Net loss was $7.7 million ($0.70 per share) for Q3 2026, compared to a net loss of $5.0 million ($0.46 per share) in Q3 2025.
• Adjusted EBITDA was $8.2 million (5.1% margin) for Q3 2026, up from $7.0 million (4.8% margin) in Q3 2025, marking the third consecutive quarter of double-digit Adjusted EBITDA growth.
• Gross margin expanded approximately 100 basis points to 60.1% in Q3 2026 from 59.1% in Q3 2025, driven by improved full-price selling, partially offset by higher inbound freight costs.
• Selling expenses were $52.3 million (32.4% of net sales) in Q3 2026, compared to $43.2 million (29.4% of net sales) in Q3 2025, primarily due to $5.3 million in one-time distribution center relocation costs and sales growth.
• Marketing expenses were $21.1 million (13.1% of net sales) in Q3 2026, compared to $18.5 million (12.6% of net sales) in Q3 2025.
• General and administrative expenses were $27.7 million (17.1% of net sales) in Q3 2026, compared to $26.7 million (18.1% of net sales) in Q3 2025.
• Cash and cash equivalents totaled $15.6 million at the end of Q3 2026, down from $20.3 million at the end of fiscal year 2025.
• Inventory increased to $95.4 million at the end of Q3 2026 from $86.2 million at the end of fiscal year 2025.
• Total debt decreased 8.5% year-over-year to $101.9 million at the end of Q3 2026 from $111.3 million in Q3 2025.
• Cash flow provided by operations was $16.2 million for the nine months ended September 30, 2026, compared to $14.7 million for the same period in 2025.

Guidance and Future Outlook:

• Full Year 2026 Net Sales guidance updated to $626–$632 million (prior: $625–$635 million).
• Full Year 2026 Adjusted EBITDA guidance updated to $29–$30 million (prior: $30–$32 million).
• Full Year 2026 Capital Expenditures guidance updated to $16–$17 million (prior: $18–$20 million).
• Full Year 2026 Weighted average diluted share count guidance remains at 11 million.
• Fourth Quarter 2026 Net Sales guidance provided at $172–$178 million.
• Fourth Quarter 2026 Adjusted EBITDA guidance provided at $7–$8 million.
• Fourth Quarter 2026 Weighted average diluted share count guidance remains at 11 million.

Business Segments and Product Lines:

• U.S. net sales increased 14% in Q3 2026, the first quarter of double-digit growth since the sourcing network transformation.
• Rest of World net sales rose 79% in Q3 2026, led by Princess Polly's growth in the U.K.
• Australia & New Zealand net sales decreased 6.7% in Q3 2026.
• Princess Polly operates 15 U.S. stores and plans to open at least six new U.S. locations in 2027.
• Culture Kings will launch an immersive retail experience in Puerto Rico during Q3 2026.
• Petal & Pup has established its strongest distribution pipeline to date.

Market and Competitive Landscape:

• The company utilizes a data-driven "test and repeat" merchandising model to introduce new and exclusive fashion weekly.
• The portfolio includes brands Princess Polly, Culture Kings, Petal & Pup, and mnml, targeting next-generation consumers who shop primarily online.
• Active customers increased 8.8% year-over-year to 4.43 million (trailing twelve months) as of September 30, 2026.
• Average order value decreased 2.6% year-over-year to $76 in Q3 2026.
• Number of orders increased 12.8% year-over-year to 2.12 million in Q3 2026.

Risks and Challenges:

• Risks include economic downturns, unstable market conditions, and consumer demand fluctuations.
• Potential impacts from tariffs, duties, and trade policies, particularly regarding goods sourced from China.
• Challenges in managing inventory effectively and anticipating rapidly changing consumer preferences.
• Risks associated with physical retail expansion, including lease commitments, build-out costs, and site selection.
• Operational complexities and regulatory compliance risks related to international expansion, including the U.K.
• Potential for increased shipping and distribution costs or interruptions.
• Risks related to the implementation of artificial intelligence tools and reliance on social media platforms.
• Foreign currency fluctuations and potential tax liabilities.

Management Commentary and Tone:

• CEO Ciaran Long stated that results reflect strong execution against the strategic plan and that structural improvements are driving growth and profitability.
• Management expressed confidence in the strategy and long-term value creation opportunity due to an omnichannel presence and clear growth catalysts.
• Gross margin expansion was attributed to Culture Kings' full-price, test-and-repeat model.
• The balance sheet was strengthened through a reduction in total debt.

Other Key Points:

• The company reported $5.3 million in one-time costs for the relocation of its distribution center to Ohio.
• Non-routine items included severance from headcount reductions, one-time supply chain sourcing costs, and sales tax penalties.
• The company did not provide a quantitative reconciliation of forward-looking Adjusted EBITDA to GAAP net income due to the inability to project certain variable items like equity-based compensation and interest expense without unreasonable effort.
• A conference call to discuss results was scheduled for November 4, 2026, at 4:30 p.m. ET.