Princess Polly and Culture Kings owner A.K.A. Brands has reported another fall in Australian and New Zealand sales, even as its US business recorded its strongest growth in more than a year.
Sales across Australia and New Zealand dropped 6.7 per cent to US$41.2 million in the third quarter ended September 30, down from US$44.1 million a year earlier. For the nine months to September, the region’s sales were down 6.3 per cent to US$113.7 million.
By contrast, US sales grew 14 per cent to US$112.6 million, while sales across the rest of the world climbed 78.9 per cent to US$7.6 million on the back of Princess Polly’s expansion into the UK.
Group net sales rose 9.7 per cent to US$161.3 million, or 7.6 per cent on a constant currency basis. Growth was driven by a 12.8 per cent lift in orders, which offset a decline in average order value from US$78 to US$76. Active customers increased 8.8 per cent to 4.43 million.
“The U.S., our largest market, led our performance with net sales up 14 per cent, its first quarter of double-digit growth since we transformed our sourcing network last year,” A.K.A. Brands CEO Ciaran Long said.
The NYSE-listed group’s net loss widened to US$7.7 million, from US$5 million in the prior corresponding period. The result included US$5.3 million in one-off costs for relocating its distribution centre to Ohio.
Adjusted EBITDA rose to US$8.2 million from US$7 million, while gross margin improved by one percentage point to 60.1 per cent. The company attributed the margin gain mainly to stronger full-price selling across its streetwear brands, partly offset by higher inbound freight costs.
“Gross margin expanded approximately 100 basis points to 60.1 per cent, led by Culture Kings’ full-price, test-and-repeat model, and we also continued to strengthen our balance sheet, reducing total debt by 8.5% year-over-year,” Long said.
Debt stood at US$101.9 million at the end of the quarter, down from US$111.3 million a year earlier. Cash and cash equivalents fell to US$15.6 million, from US$20.3 million at the end of the 2025 financial year, while inventory sat at US$95.4 million.
Physical retail remains part of the strategy. Princess Polly ended the quarter with 15 US stores and plans to open at least six more in the US next year, while Culture Kings is set to open in Puerto Rico this quarter. The company also reported Petal & Pup had built its strongest wholesale pipeline to date.
A.K.A. Brands narrowed its full-year net sales guidance to between US$626 million and US$632 million, from US$625 million to US$635 million previously. It trimmed adjusted EBITDA guidance to between US$29 million and US$30 million, down from US$30 million to US$32 million, and expects fourth-quarter net sales of US$172 million to US$178 million.