AKA Brands, the US company that owns Australian brands Culture Kings, Princess Polly and Petal & Pup, has recorded a 13 per cent sales dive in Australia in the second quarter of 2026.
The Australian sales slump has dragged the company’s total sales down by 0.3 per cent to US$160 million, offset by a 2.1 per cent revenue lift in the company’s US market, which makes up over two-thirds of AKA Brands’ total sales – at US$110 million in the second quarter.
Despite the sales slump, AKA Brands has been able to turn around its net losses. In the second quarter this year, the company’s total net loss was just $200,000, an improvement from the net loss of US$3.6 million in the same time last year.
The company’s total earnings before interest, tax, depreciation and amortisation (EBITDA) also lifted slightly, hitting positive US$8.7 million.
AKA Brands CEO Ciaran Long said the 16 per cent uplift in EBITDA and the holding of sales was driven by expanded distribution across stores, wholesale and marketplace, as well as continued financial discipline across the business.
“We also ended the quarter with our strongest balance sheet since becoming a public company, providing increased flexibility to invest in both growth and profitability,” Long said.
On Australia and New Zealand, Long said the region’s sales dive of 13 per cent to US$39.7 million was driven by a challenging macro backdrop and a tough prior-year comparison from the clearance of non-go-forward goods.
“Importantly, quarter-to-date momentum has accelerated in all regions, with overall net sales growth in the high-single-digits alongside healthy margins, giving us continued confidence in our outlook for the second half,” Long said.
At the bottom line, AKA Brands’ gross margin in the second quarter lifted 3.6 percentage points to 61.1 per cent, buoyed by Culture Kings shifting toward a full-price, test-and-repeat model.
The Culture Kings brand also signed a new store lease in Puetro Rico, set to be its second store opened in North America, with the brand hosting a store in Las Vegas. The streetwear brand has eight stores across Australia and one in New Zealand.
Princess Polly has also seen retail wins, with Long noting its recent pop-up at The Grove in Los Angeles exceeded expectations. The brand remains on track to open four new stores in the United States by year-end, and ten more in 2027.
Long said there is a long-term opportunity to have at least 100 Princess Polly stores operating.
Meanwhile, the company recently launched a distribution centre in the United Kingdom, which Long said is reinforcing Princess Polly’s international growth potential.
As for Petal & Pup, that brand continues to scale its wholesale partners portfolio.
“We remain confident that our omnichannel expansion and strengthened financial foundation position us for sustainable, profitable growth over the long term,” concluded Long.
Across other financial metrics, AKA Brands reported that its selling expenses were US$47.8 million in Q2 this year, compared to US$45.4 million in the second quarter of 2025. Selling expenses were 29.9 per cent of net sales, compared to 28.3 per cent of net sales in the second quarter of 2025. The increase was primarily driven by an increase in store selling expenses.
Marketing expenses were US$21.4 million, compared to US$19.9 million in the second quarter of 2025. Marketing expenses were 13.3 per cent of net sales, compared to 12.4 per cent of net sales in the second quarter of 2025.
General and administrative (G&A) expenses were US$27.5 million, compared to US$27.5 million in the second quarter of 2025. G&A expenses were 17.2 per cent of net sales, compared to 17.1 per cent of net sales in the second quarter of 2025.
Cash and cash equivalents at the end of the second quarter totalled US$21.1 million, compared to US$20.3 million at the end of fiscal year 2025.
Inventory by Q2 end was US$79.9 million, compared to US$86.2 million at the end of fiscal year 2025 and US$92.5 million at the end of the second quarter of 2025.
Debt at the end of the second quarter was US$99.9 million, compared to US$111.1 million at the end of fiscal year 2025 and US$108.7 million at the end of the second quarter of 2025.
Cash flow provided by operations for the six months ended June 30, 2026 was US$18.7 million, compared to cash flow provided by operations of US$10.0 million for the six months ended June 30, 2025.