A.k.a. Brands (AKA 0.93%), a portfolio company behind digital and omnichannel fashion brands, reported results for Q2 2025 on August 6, 2025. The headline news from the release was stronger-than-expected GAAP revenue of $160.5 million for Q2 2025, ahead of the $155.8 million GAAP analyst estimate, and a GAAP loss per share of $(0.34), also less than the anticipated loss of $(0.505). Revenue grew 7.8% compared to the same period last year. While the net loss (GAAP) widened year over year to $(3.6) million, the company managed positive cash flow from operations and saw strong growth in its U.S. business. Overall, the quarter showed top-line momentum and operational discipline, but highlighted the ongoing need to improve profitability and manage pressures from tariffs and expanding store and wholesale activity.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.34) | $(0.51) | $(0.22) | (54.5 %) |
| Revenue (GAAP) | $160.5 million | $155.8 million | $148.9 million | 7.8 % |
| Adjusted EBITDA | $7.5 million | $8.0 million | -6.3 % | |
| Gross Margin | 57.5 % | 57.7 % | (0.2) pp | |
| Net Loss (GAAP) | $(3.6 million) | $(2.3 million) | (56.5 %) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Success Factors
A.k.a. Brands operates a portfolio of direct-to-consumer and omnichannel fashion brands. Key names in its lineup include Princess Polly (trend-focused fashion for Gen Z and Millennial women), Culture Kings (streetwear and in-house street fashion brands), Petal & Pup (contemporary women’s apparel), and mnml, a men's streetwear brand. Its differentiated “test, repeat & clear” merchandising model lets the company rapidly introduce and scale new products according to real-time consumer trends. This helps drive brand relevancy and manage inventory efficiency.
In the last year, the company has focused on driving growth via expanding its in-person retail footprint, forming wholesale partnerships, and boosting international presence. Success comes down to how well it can balance rapid fashion innovation, data-driven merchandising, omnichannel expansion, and operational efficiency.
Quarter Highlights and Key Developments
Net sales (GAAP) rose to $160.5 million in Q2 2025, a 7.8% increase from the prior year and a $4.7 million GAAP revenue beat over analyst forecasts. U.S. net sales jumped 13.7% to $108.4 million (GAAP), with strong performance especially in direct-to-consumer and newly expanded retail and wholesale channels. Princess Polly, one of the company’s leading offerings in young women’s fashion, opened three new retail stores and extended its wholesale presence to all Nordstrom stores in Q1 2025. These new stores are having a “halo effect” on online sales, helping drive up customer acquisition and engagement.
While U.S. growth powered the results, international performance was mixed. Sales in Australia and New Zealand held steady at $45.7 million, showing early signs of stabilization. However, Sales in other international markets fell sharply by 19.4% to $6.4 million. Management flagged the need for further progress outside core regions, as Rest-of-world sales currently make up a small portion of total revenue, representing 4% of total sales in 2024.
Operating metrics showed increased order volume and active customer growth, with the trailing twelve-month active customer count up 3.0% to 4.13 million as of Q2 2025 and order volume was up 6.8% in Q2 FY2025. Average order value remained unchanged at $78. Inventory at the end of the second quarter totaled $92.5 million, down 13.4% from $106.7 million at the end of the second quarter of 2024, boosting working capital efficiency and contributing to positive cash flow from operations (GAAP) of $10.0 million for the first six months of 2025. This compared favorably to last year's outflow of $(4.2) million for the six months ended June 30, 2024.
Margin and profit trends told a more complicated story. Gross margin was 57.5%, compared to 57.7% in the second quarter of 2024, as higher tariffs partly offset gains from full-price selling and improved inventory turnover. Adjusted EBITDA was $7.5 million in the second quarter of 2025, compared to $8.0 million in the second quarter of 2024. Operating expenses increased in absolute terms, with selling and marketing expenses also rising as a share of sales, while G&A as a percent of sales edged down slightly. Selling costs were up 10.2%, tied to store expansion in Q2 FY2025. Marketing and general and administrative expenses grew, but G&A as a percent of sales edged down slightly.
Looking at brands, Petal & Pup, focused on contemporary essentials, broadened its reach with a wholesale debut at Nordstrom. Wholesale and physical retail channels gained traction as key contributors to new customer growth and brand awareness.
Outlook and Guidance
Leadership raised its full-year FY2025 revenue guidance to $608–$612 million, above the prior $600–$610 million range, citing outperformance in the first half and strong U.S. momentum. Management also raised the low end of its adjusted EBITDA (non-GAAP) guidance, now expecting $24.5–$27.5 million for FY2025. Guidance for Q3 2025 sets net sales between $154–$158 million. with Adjusted EBITDA (non-GAAP) of $7.3–$7.7 million for Q3 FY2025. Capital expenditures are also projected higher at $14–$16 million for FY2025, reflecting store rollouts and omnichannel investments. Management stated that higher tariffs will continue to weigh on gross margin through Q3 2025, with normalization anticipated in Q4 2025.
Execution on supply chain diversification -- including moving production out of China -- will be closely followed, especially in terms of cost, speed, and quality. International growth, especially outside the U.S. and Australia/New Zealand, remains an area with untapped potential. Finally, while cash flow and inventory efficiency both improved, debt levels remain elevated at $108.7 million as of Q2 FY2025.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
