In the latest Q3 update, A.K.A. Brands faced a 9.6% decline in net sales at $140.8 million, primarily due to sluggish overseas markets, notably in Australia and New Zealand. The dip was driven by reduced orders and average order values, reflecting challenging macroeconomic conditions.
Despite this, the U.S. market showcased resilience with a 2% increase in net sales, marking a noteworthy 9.7% growth over a two-year period. However, net losses widened to $70.4 million for the quarter ending September 30.
Concurrent with the earnings update, A.K.A. Brands announced a leadership transition. CEO Jill Ramsey has transitioned to a strategic advisory role, with Ciaran Long, interim CEO and CFO, continuing in his role during the CEO search.
Ciaran Long emphasized positive aspects, stating, «Our operating model improvements generated positive operating cash flow and U.S. net sales growth in Q3. Despite macroeconomic pressures in Australia, we are taking decisive actions to enhance operations, including rightsizing inventory and transitioning Culture Kings to a data-driven, short lead time merchandising cycle.»
He expressed confidence in the strategic actions, foreseeing long-term success, growth, and profitability in 2024. The company’s strategic focus on the U.S. market, constituting 60% of total net sales, remains a pivotal opportunity for expansion.
