Net Sales Grew 6% Compared to the Second
Quarter of Fiscal 2021; 11%1 in Constant Currency U.S. Net
Sales Grew 16% Compared to the Second Quarter of Fiscal 2021
Active Customers2 Increased 34% on a LTM Basis Compared to the
Same Period Last Year
a.k.a. Brands Holding Corp. (NYSE: AKA), a brand
accelerator of next generation fashion brands, today announced
preliminary unaudited financial results for the second quarter
ending June 30, 2022. The Company also announced that its final
second quarter fiscal year 2022 earnings results will be released
on Wednesday, August 10, 2022, after the market close.
For the second quarter of fiscal 2022:
- Net sales growth of 6% to approximately $158.5 million as
compared to last year; 11%1 in Constant Currency. This is on top of
76%3 growth last year pro forma for the acquisition of Culture
Kings.
- We expect net loss of approximately $4.2 million.
- We expect Adjusted EBITDA3 of approximately $5.9 million.
“We delivered double digit1 revenue growth in Constant Currency
for the second quarter on top of tremendous growth last year.
However, growth slowed from the prior quarter and net sales missed
our expectations,” said Jill Ramsey, CEO, a.k.a. Brands. “Sales
were impacted by inflationary pressures on the consumer, shifts in
spending and a slower than expected recovery in Australia.
Additionally, lower return on marketing investments, a competitive
promotional environment and higher merchandise returns led us to
reduce our outlook for Adjusted EBITDA.”
Ms. Ramsey continued, “despite macro pressures, we remain
encouraged by the strong growth in Active Customers as we continue
to attract and retain consumers, particularly in the U.S. Although,
we anticipate headwinds will continue through the remainder of the
year, we expect sequential improvement in Adjusted EBITDA rates as
we optimize marketing investments, maintain disciplined inventory
controls and tighten expenses. We remain highly confident that our
strategies and the investments we are making will drive profitable
growth long term due to our portfolio of strong digital brands, the
flexibility of our business model and the talent of our teams.”
The Company will provide an update on its revised fiscal 2022
outlook on its August 10 earnings call.
Use of Non-GAAP Financial Measures
We have provided Adjusted EBITDA and pro forma net sales in this
release as non-GAAP performance measures used by management for
purposes of evaluating ongoing operations and for internal planning
and forecasting purposes. We believe that these non-GAAP operating
measures, when reviewed collectively with our GAAP financial
information, provides useful supplemental information to investors
in assessing our operating performance. See additional information
at the end of this release.
About a.k.a. Brands
Established in 2018, a.k.a. Brands is a brand accelerator of
next generation fashion brands. Each brand in the a.k.a. portfolio
targets a distinct Gen Z and millennial audience, creates authentic
and inspiring social content and offers quality exclusive
merchandise. a.k.a. Brands leverages its next-generation retail
platform to help each brand accelerate its growth, scale in new
markets and enhance its profitability. Current brands in the a.k.a.
Brands portfolio include Princess Polly, Culture Kings, mnml, Petal
& Pup and Rebdolls.
Forward-Looking Statements
Certain statements made in this release are “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the United States Private Securities Litigation Reform Act of 1995.
When used in this press release, the words “estimates,”
“projected,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,”
“propose” and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the Company’s control, that
could cause actual results or outcomes to differ materially from
those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results
or outcomes include the continuation of the COVID-19 pandemic and
the potential related disruptions to our operations, customer
demand and our suppliers’ ability to meet our needs; our ability to
anticipate rapidly-changing consumer preferences in the apparel,
footwear and accessories industries; our ability to acquire new
customers, retain existing customers or maintain average order
value levels; the effectiveness of our marketing and our level of
customer traffic; merchandise return rates; our success in
identifying brands to acquire, integrate and manage on our
platform; our ability to expand into new markets; the global nature
of our business; our use of social media platforms and influencer
sponsorship initiatives, which could adversely affect our
reputation or subject us to fines or other penalties; the inherent
challenges in measuring certain of our key operating metrics, and
the risk that real or perceived inaccuracies in such metrics may
harm our reputation and negatively affect our business; the
potential for requirements to collect additional sales taxes or to
be subject to other tax liabilities that may increase the costs to
our consumers; economic downturns and market conditions beyond our
control; currency fluctuations; our ability to attract and retain
highly qualified personnel; fluctuations in wage rates and the
price, availability and quality of raw materials and finished
goods, which could increase costs; interruptions in or increased
costs of shipping and distribution, which could affect our ability
to deliver our products to the market; and other risks and
uncertainties set forth in the sections entitled “Risk Factors” and
“Forward-Looking Statements” in the Company’s Annual Report on Form
10-K, dated March 1, 2022, and our Quarterly Report on Form 10-Q,
dated May 10, 2022, each as filed with the Securities and Exchange
Commission. a.k.a. Brands does not undertake any obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
a.k.a. BRANDS HOLDING CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in
thousands) (unaudited)
Adjusted EBITDA
Adjusted EBITDA is a key performance measure that management
uses to assess our operating performance. Because Adjusted EBITDA
facilitates internal comparisons of our historical operating
performance on a more consistent basis, we use it for business
planning purposes.
We also believe this information will be useful for investors to
facilitate comparisons of our operating performance and better
identify trends in our business.
We calculate Adjusted EBITDA as net income adjusted to exclude:
interest and other expense; provision for income taxes;
depreciation and amortization expense; stock-based compensation
expense; transaction costs; costs to establish or relocate
distribution centers; and one-time or non-recurring items. Adjusted
EBITDA is considered a non-GAAP financial measure under the SEC’s
rules because it excludes certain amounts included in net income,
the most directly comparable financial measure calculated in
accordance with GAAP. A reconciliation of non-GAAP Adjusted EBITDA
to net income (loss) for the three months ended June 30, 2022 and
2021 is as follows:
Three Months Ended June
30,
In thousands
2022
2021
Net income (loss)
$
(4,212
)
$
2,189
Add:
Total other expense, net
2,593
4,155
Provision for (benefit from) income
tax
(955
)
939
Depreciation and amortization expense
5,590
4,535
Inventory step-up amortization expense
—
6,266
Equity-based compensation expense
1,494
609
Distribution center relocation costs
1,291
—
Transaction costs
90
736
Adjusted EBITDA
$
5,891
$
19,429
Net income (loss) margin
(3
)%
1
%
Adjusted EBITDA margin
4
%
13
%
Pro Forma Net Sales
Pro forma net sales is considered a non-GAAP financial measure
under the SEC’s rules. We believe that pro forma net sales is
useful information for investors as it provides a better
understanding of sales performance, and relative changes therein,
on a comparable basis. We calculate pro forma net sales as net
sales including the historical net sales relating to the
pre-acquisition periods of Culture Kings, assuming that the Company
acquired Culture Kings at the beginning of the period presented.
Pro forma net sales is not necessarily indicative of what the
actual results would have been if the acquisition had in fact
occurred on the date or for the periods indicated nor does it
purport to project net sales for any future periods or as of any
date. A reconciliation of non-GAAP pro forma net sales to net
sales, which is the most directly comparable financial measure
calculated in accordance with GAAP, for the three months ended June
30, 2021, is as follows:
Three Months Ended June
30, 2021
Three Months Ended June 30,
2020
Growth Rate
Actual
Actual
Culture Kings
Pro Forma
Actual
Pro Forma
Net sales
$
149,227
$
46,793
$
38,179
$
84,972
218.9
%
75.6
%
_____________________________ 1 In order to provide a framework
for assessing the performance of our underlying business, excluding
the effects of foreign currency rate fluctuations, we compare the
percent change in the results from one period to another period
using a constant currency methodology wherein current and
comparative prior period results for our operations reporting in
currencies other than U.S. dollars are converted into U.S. dollars
at constant exchange rates (i.e., the rates in effect on December
31, 2021, which was the last day of our prior fiscal year) rather
than the actual exchange rates in effect during the respective
periods. 2 We view the number of Active Customers as a key
indicator of our growth, the value proposition and consumer
awareness of our brand, and their desire to purchase our products.
In any particular period, we determine our number of Active
Customers by counting the total number of unique customer accounts
who have made at least one purchase in the preceding 12-month
period, measured from the last date of such period. 3 See
additional information at the end of this release regarding
non-GAAP financial measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220721005986/en/
Investor Contact investors@aka-brands.com
Media Contact media@aka-brands.com
aka Brands (NYSE:AKA)
Historical Stock Chart
From Mar 2024 to Apr 2024
aka Brands (NYSE:AKA)
Historical Stock Chart
From Apr 2023 to Apr 2024