AKA Brands Q3 net sales rise, cuts FY adjusted EBITDA outlook

Overview

• U.S. fashion brands portfolio's Q3 net sales rose 9.7% yr/yr, slightly missing analyst expectations

• Adjusted EBITDA for Q3 up compared to last year

• Gross margin expanded to 60.1%, driven by Culture Kings’ improved full-price selling

Outlook

• Company sees Q4 net sales between $172 mln and $178 mln

• Company forecasts FY 2026 net sales of $626 mln to $632 mln

• Company lowers FY 2026 adjusted EBITDA guidance from $30 mln-$32 mln to $29 mln-$30 mln

Result Drivers

• ORDER GROWTH - Net sales increase was driven by a 12.8% rise in number of orders

• FULL-PRICE STREETWEAR SALES - Gross margin expansion attributed to improved full-price selling on streetwear brands, partially offset by higher inbound freight costs

• U.S. MARKET - U.S. net sales rose 14%, with co citing sourcing network transformation as a factor

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the apparel & accessories retailers peer group is "buy"

• Wall Street's median 12-month price target for AKA Brands Holding Corp is $13.00, about 29.5% above its November 3 closing price of $10.04

Reuters Recommended Reads

• Nov 3 - Zalando Q3 revenue slightly beats estimates on B2B expansion

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)