a.k.a. Brands (NYSE:AKA) Announces Quarterly Earnings Results, Misses Expectations By $0.04 EPS

a.k.a. Brands (NYSE:AKA) posted its quarterly earnings data on Wednesday. The company reported ($0.70) EPS for the quarter, missing the consensus estimate of ($0.66) by ($0.04), FiscalAI reports. a.k.a. Brands had a negative return on equity of 20.93% and a negative net margin of 4.43%. The firm had revenue of $161.34 million for the quarter, compared to analysts’ expectations of $161.51 million.

Here are the key takeaways from a.k.a. Brands’ conference call:

• Q3 sales and earnings grew: Net sales rose 9.7% to $161.3 million and Adjusted EBITDA increased 16.6% to $8.2 million, marking the third consecutive quarter of double-digit Adjusted EBITDA growth.
• U.S. and international growth led results: U.S. sales grew 14%, while rest-of-world sales increased 78.9%, driven by Princess Polly in the U.K. Australia and New Zealand sales declined 6.7%, though the decline eased from Q2.
• Margins and balance-sheet metrics improved: Gross margin expanded about 100 basis points to 60.1%, despite a roughly $2.3 million freight-cost impact. Debt fell 8.5% year over year, net leverage improved to 3.5x, and inventory was down 1.3%.
• Freight costs pressured the outlook: The company expects higher air-freight rates and surcharges to reduce Q4 gross margin by an additional 80 basis points versus its prior outlook; Q4 Adjusted EBITDA is now forecast at $7 million to $8 million.
• Full-year sales guidance was tightened: The company now expects net sales of $626 million to $632 million, in line with a mid-single-digit quarter-to-date trend, and forecasts full-year Adjusted EBITDA of $29 million to $30 million. Management cited store openings, European expansion, and Petal & Pup’s wholesale pipeline as growth opportunities.

a.k.a. Brands Stock Down 3.5%

AKA stock traded down $0.37 during midday trading on Thursday, reaching $10.12. 4,932 shares of the company were exchanged, compared to its average volume of 3,771. The company has a debt-to-equity ratio of 0.98, a quick ratio of 0.40 and a current ratio of 1.11. a.k.a. Brands has a 1-year low of $8.42 and a 1-year high of $14.39. The stock’s 50-day simple moving average is $10.71 and its 200 day simple moving average is $10.54. The company has a market cap of $111.22 million, a price-to-earnings ratio of -4.08 and a beta of 1.33.

Analyst Ratings Changes

Separately, Weiss Ratings restated a “sell (d-)” rating on shares of a.k.a. Brands in a report on Thursday, October 15th. One analyst has rated the stock with a Buy rating, two have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the stock has a consensus rating of “Hold” and an average price target of $19.00.

a.k.a. Brands Company Profile

a.k.a. Brands Holding Corp. is a global fashion platform that owns and operates a portfolio of digitally native apparel and lifestyle brands. The company focuses on reaching younger consumers through e-commerce, social media, influencer marketing and brand-focused online shopping experiences.

Its brand portfolio has included Princess Polly, an online women’s fashion retailer; Petal & Pup, which offers women’s apparel and occasion wear; and other specialty fashion businesses such as mnml, Culture Kings and Rebdolls.