A.K.A. Brands, the US-based parent company of three homegrown Australian brands Princess Polly, Culture Kings and Petal & Pup, has reported a US$5 million loss (~A$7.69 million) in the third quarter of 2025, year-on-year.
This follows a US$5.4 million loss recorded in the third quarter of 2024, year-on-year.
The slump in total profit is matched with a 1.9 per cent fall in net sales during the third quarter, which hit US$147.1 million. This is down from US$149.9 million recorded in the third quarter of 2024, with the group’s US market leading the total sales slip. Sales in the US dipped from US$100.18 million in Q3 2024 to US$96.56 million in Q3 2025.
This was offset by a sales lift in Australia and New Zealand, from US$43.93 million to US$46.19 million.
Outside of AU/NZ and the US, A.K.A. Brands’ rest of world sales also slipped by 25 per cent to US$4.3 million.
On a constant currency basis, total net sales were down 2.7 per cent in the same period.
The group also reported an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of US$7 million, which is down from an adjusted EBITDA of US$8.2 million in the third quarter of 2024.
A.K.A. Brands CEO Ciaran Long welcomed the adjusted EBITDA result, which he said was supported by a 110 basis point lift in gross margin to 59.1 per cent. That, according to the group, was primarily due to the impact from a higher mix of retail stores, which have higher margins, less promotional activity in the current period and a duty drawback benefit.
“We generated third quarter net sales of US$147 million, reflecting temporary disruptions to in-stock levels and fashion newness that limited our ability to fully meet customer demand,” Long said.
“Inventory levels have since improved, and fourth quarter-to-date net sales are tracking up low single digits compared to last year. I’m proud of the progress our teams have made advancing our strategic initiatives, which position us to drive sustainable, profitable growth over the long term.”
Regarding the net sales slip, A.K.A. Brands reported this was driven by a 3.7 per cent fall in average order value (AOV), which was at US$78 in Q3 2025. In the 9 months to September 30, AOV fell from US$79 to US$78.
The AOV fall came amid temporary supply chain disruptions impacting in-stock levels, which was partially offset by a 2.2 per cent increase in the number of orders, primarily due to growth in Australia and New Zealand.
Inventory at the end of the third quarter totalled US$96.7 million, compared to US$95.8 million at the end of fiscal year 2024 and US$106.0 million at the end of the third quarter of 2024.
“We made meaningful progress on our strategic priorities in the third quarter,” Long said. “We opened Princess Polly’s 11th store at The Westchester mall, expanded our wholesale partnerships, and successfully refinanced our debt, further strengthening our financial position.
“We also advanced the optimization of our sourcing structure, a critical initiative that will enhance resilience and flexibility across our operations.”
Following these results, A.K.A. Brands is now projecting total net sales for 2025 to hit somewhere between US$598 million and US$602 million, down from prior guidance of US$608 million to US$612 million. Adjusted EBITDA for the full year has also been tweaked down, now sitting between US$23 million to US$23.5 million.
The projected capital expenditure for 2025 has in turn risen, now sitting between US$16 million to US$18 million.
Alongside Culture Kings, Princess Polly and Petal & Pup, A.K.A. Brands also manages US-based streetwear label mnml.
By the end of 2025, Princess Polly is expected to have 13 stores altogether by 2025 end. Culture Kings has seven stores across Australia, one in New Zealand and one in Las Vegas. Petal & Pup sells via online and through stockists, while mnml sells online and is stocked at Culture Kings.