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DATE

Thursday, March 5, 2026, at 4:30 p.m. ET

CALL PARTICIPANTS

  • Interim Chief Executive Officer and Chief Financial Officer — Ciaran Long
  • Chief Operating Officer — Kevin Grant

TAKEAWAYS

  • Full-Year Revenue -- Net sales increased 4.4% to $600 million, with the U.S. contributing $394 million, a 7% increase, and representing 66% of the business.
  • Q4 Revenue -- Net sales rose 3.1% to $164 million, matching internal guidance.
  • Gross Margin -- For the year, gross margin expanded by 30 basis points to 57.3%, but for Q4 declined to 55.6% from 55.9% due to out-of-stocks, partly offset by higher retail store mix.
  • Tariff Headwind Impact -- Management estimated that tariffs negatively affected fiscal 2025 gross margin by approximately 100 basis points, partially offset by mitigation actions.
  • Inventory Position -- Year-end inventory decreased by 10% to $86.2 million, with sequential and year-over-year declines cited as a result of test-and-repeat merchandising, especially in Culture Kings.
  • Customer Metrics -- Total orders for Q4 were 2.2 million, up 6.4%, while trailing twelve-month active customers (excluding wholesale) reached 4,180,000, compared to 4,070,000, and average order value (AOV) declined 2.6% to $76.
  • Princess Polly Performance -- Delivered double-digit net sales growth and expanded its retail footprint to 14 stores globally, including seven new U.S. stores and the first Australian location, with omnichannel strategy and TikTok Live cited as key demand drivers.
  • Petal & Pup Growth -- Posted solid results, strengthened its wholesale presence at Nordstrom and launched on Nuuly, Nykaa Fashion in India, and David Jones, Australia, with plans for new U.S. retail partnerships in 2026.
  • Culture Kings and Streetwear Brands -- In-house brands like Loiter, Minimal, 73 Studio, and American Thrift experienced double-digit revenue or gross profit growth following merchandising and operational changes; early indicators from the new 5,000 square foot Brisbane store were positive.
  • Supply Chain Diversification -- Approximately 50% of U.S. sourcing now comes from outside China; supply chain restructuring is substantially complete, designed to provide sourcing flexibility and mitigate future trade risks.
  • Adjusted EBITDA -- For Q4, adjusted EBITDA was $2.5 million (1.5% of net sales); for the full year, adjusted EBITDA totaled $19.7 million (3.3% of net sales) compared to $23.3 million (4.1%) the prior year.
  • Debt and Liquidity -- Cash and equivalents at year-end were $20.3 million versus $24.2 million a year earlier, while debt decreased to $111.1 million from $111.7 million; debt was refinanced in October, extending maturity to 2028.
  • 2026 Guidance -- Net sales projected at $625 million to $635 million (4.2%-5.8% growth), with adjusted EBITDA expected between $27 million and $29 million, and Q1 sales expected at $130 million to $132 million (low single-digit growth).
  • AI Initiatives -- Artificial intelligence is being deployed companywide in product imagery, marketing productivity, inventory and markdown optimization, with management stating, "We expect AI to be a meaningful driver of margin expansion in the coming years."

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RISKS

  • Tariff headwinds negatively impacted 2025 gross margins by around 100 basis points, with management noting, "Despite the margin headwinds faced throughout the year as we sourced product at the higher tariff rates."
  • Inventory out-of-stocks in best sellers at the start of Q4 limited early-quarter sales momentum, as highlighted by Grant: "due to the accelerated supply chain transition, we entered October with meaningful out-of-stock positions in key best-selling styles, which limited sales in the early part of the quarter."
  • Average order value declined 2.6% year over year, with Q4 AOV at $76 amid evolving channel and category mix.
  • Adjusted EBITDA margin for the full year fell to 3.3% from 4.1% in the prior year, attributed to tariffs and inventory disruptions.

SUMMARY

a.k.a. Brands Holding (AKA 9.09%) reported accelerating order growth and customer acquisition, particularly in the U.S, supported by channel expansion and an omnichannel strategy. Margins were pressured by tariffs and supply chain adjustments, but major sourcing diversification was completed, and inventory discipline improved, setting the stage for improved margin outlook. The 2026 outlook anticipates meaningful profitability gains, a significant increase in adjusted EBITDA, elevated investment in AI, and continued physical and wholesale expansion across multiple brands.

  • Plans include opening at least four to five new Princess Polly stores in 2026, with additional expansion in 2027, and entering the U.K. market through a partnership with a third-party logistics provider.
  • Culture Kings’ store format test in Brisbane is intended as a prototype for further U.S. retail growth, offering more agile rollout and store productivity enhancement opportunities.
  • Petal & Pup will debut with Dillard's, Von Maur, and select U.S. boutiques in 2026, focused on new categories and increased assortment balance to drive repeat customer rates.
  • Gross margins are anticipated to recover in 2026 as tariff impacts are cycled, with much of the forecasted EBITDA margin expansion attributed directly to this margin normalization.

INDUSTRY GLOSSARY

  • Test-and-Repeat Merchandising: An inventory strategy emphasizing small-batch product launches and rapid replenishment of successful items to improve inventory turns and reduce overstock risk.

Full Conference Call Transcript

Ciaran Long: Good afternoon, everyone. Thanks for joining us today to discuss our fourth quarter and full year 2025 results. I am pleased to report that we delivered another year of growth reflecting the continued strength of our brands and the power of our business model. Despite a dynamic environment, we executed on our strategic priorities, strengthened our foundation, and entered 2026 positioned for accelerated growth and expanding margins. I want to thank our teams across the business for their focus and disciplined execution throughout the year. Their commitment and hard work were central to the progress we made and the momentum we carry into the year ahead. Let me start with a few highlights from the year.

For the full year, we grew net sales 4.4% to $600 million, marking another consecutive year of growth. Our U.S. region, which remains our largest and fastest growing market, delivered net sales growth of 7% to $394 million. On a two-year stack, the U.S. is up 25%, further reinforcing our conviction in our U.S. expansion plans, and the U.S. now makes up 66% of the business. Princess Polly continued to deliver strong performance throughout the year, generating double-digit net sales growth and advancing its omnichannel expansion strategy. The brand opened seven new stores in the U.S. in 2025 and launched its first location in Australia in the fourth quarter, ending the year with 14 stores globally.

Wholesale continued to perform well across the portfolio, with our partnership at Nordstrom exceeding expectations, with both Princess Polly and Petal & Pup delivering strong results. We also strengthened the leadership team, operations, and go-to-market strategy within our streetwear brands. These actions improved merchandising discipline and inventory productivity, positioning Culture Kings and Minimal for accelerated growth and stronger margin contribution in 2026. And importantly, we exited the year with inventory down 10% year over year, reflecting our continued disciplined approach to inventory management as we improve turns and transition our streetwear to the test-and-repeat merchandising approach. In 2025, we also completed an important structural transformation of our supply chain.

As discussed in prior quarters, given the rapidly evolving macro environment, we accelerated the diversification of our sourcing strategy to enhance long-term flexibility and resilience. That work is now substantially complete with approximately 50% of our U.S. sourcing from outside of China, in line with our targets, along with our ability to quickly move to different regions as necessary moving forward. Our test-and-repeat merchandising model and short lead times were core to our agility and inventory efficiency, which meant we could not pre-buy inventory ahead of the elevated tariffs implemented in 2025.

Despite the margin headwinds faced throughout the year as we sourced product at the higher tariff rates, we delivered 30 basis points of gross margin expansion to 57.3% for the year. We estimate that the tariff headwinds, offset by our mitigation efforts, negatively impacted fiscal 2025 gross margins by approximately 100 basis points. Looking ahead, we are better positioned to adapt quickly to any future trade policy changes while maintaining our competitive advantages in speed and inventory efficiency. The progress we have made over the past two years provides a strong foundation as we look ahead towards 2026 and beyond. In 2024, we stabilized the business and returned to growth.

In 2025, we built on that momentum by growing the top line, strengthening our supply chain, expanding our omnichannel presence, and continuing to invest in our brands. And as we enter 2026, we have improved operational discipline, stronger inventory health, and a clear path to accelerating growth and expanding margins. I am confident the momentum in our business is picking up, with first quarter-to-date net sales growth of mid-single digits driven by growth in our U.S. online channels. Our 2026 strategy remains focused on three core priorities. First, attracting and retaining customers through our direct-to-consumer channels with exclusive, trend-driven merchandising and innovative marketing. Second, expanding brand awareness and our total addressable market through physical retail and strategic wholesale partnerships.

And third, we remain committed to streamlining our operations and strengthening our financial foundation. As part of this, we are actively embedding AI across the organization to enhance the customer experience and drive operational excellence. Our portfolio model and flexible, asset-light technology stack enable us to rapidly test and refine solutions at the brand level, scale what works, and unlock value across the entire platform. We are already seeing measurable impact in product imagery, marketing productivity, inventory and markdown optimization. These capabilities are already improving conversion, sharpening creative execution, and enabling smarter, faster, data-driven decision-making across the business.

We expect AI to be a meaningful driver of margin expansion in the coming years, and we are scaling these initiatives with discipline and speed. With that, I will share highlights from each of our brands and the growth drivers for the coming year. Starting with Princess Polly, our largest brand, which comprises more than half of the portfolio, Princess Polly continues to resonate with next-generation customers through its trend-driven merchandising, authentic customer connections, and disciplined, social-first marketing approach. I am confident that there is tremendous runway ahead for continued global growth. As mentioned, in 2025, Princess Polly delivered double-digit net sales growth, driven by success in both its direct-to-consumer business and its omnichannel expansion.

The team continues to execute its test-and-repeat model with discipline, delivering consistent weekly newness that supports strong full-price sell-through. Importantly, the improvements we made to our supply chain positioned the brand to operate with stronger in-stock levels and capture demand more efficiently in 2026. From a marketing standpoint, Princess Polly continues to meet its customers where they are, maintaining a presence across more than 20 social and digital platforms, complemented by in-store events and broader brand initiatives. TikTok remains an important demand generation channel. In 2025, the brand increased its focus on TikTok Live, creator collaborations, and search-driven discovery, driving stronger engagement and efficient customer acquisition.

Beyond its online performance, Princess Polly continued to expand its retail footprint, with results exceeding expectations from both a financial and brand awareness perspective. Princess Polly successfully opened seven new stores in the U.S. in 2025, ending the year with a total of 13 stores in the U.S. And as mentioned, the brand opened its first store in Australia in Bondi Beach, Sydney in December. The Bondi store has been very well received and reinforces our confidence that Princess Polly’s omnichannel strategy resonates well globally. Princess Polly's wholesale business also continued to perform well in the fourth quarter, further expanding brand reach and reinforcing our strategy of meeting customers wherever they choose to shop.

Princess Polly will continue to expand and optimize its TikTok Shop and wholesale partnerships, ensuring strong brand presentation across key retail partners. Looking at 2026, Princess Polly has a clear runway for sustained global growth supported by several strategic initiatives. The brand will continue to fuel e-commerce growth by refining its test-and-repeat strategy and reinforcing brand and product storytelling. Princess Polly will deliver consistent newness, focusing on proven best-selling party styles, while also expanding its casual and basics categories to increase share of wallet. From a marketing perspective, the brand will prioritize influencer-led content and product storytelling across social platforms to drive engagement and full-price demand.

Princess Polly will continue expanding its U.S. retail footprint with eight new store leases fully executed and additional locations expected to be announced throughout the year. As shared in our related press release today, store openings in 2026 include Houston and Frisco in Texas, Orlando, Florida, and Edina, Minnesota, and locations in Jacksonville and Boca Raton in Florida, Nashville, Tennessee, and Charlotte, North Carolina planned for early 2027. While the existing fleet continues to meet our profitability and payback expectations, driving solid forward profitability, each new opening provides an opportunity to further refine execution and enhance store productivity. And lastly, Princess Polly is beginning to lay the foundation for international growth to broaden reach and expand its global presence.

Later this month, in partnership with a third-party logistics provider, Princess Polly will unlock distribution in the U.K., improving customer lead times and enhancing the overall experience in the region. This establishes the operational foundation for moderate growth in the U.K. in 2026, with further expansion in the coming years. Turning now to our other women's brand, Petal & Pup. The brand continues to resonate with its core customer through a curated assortment of trend-forward, feminine, occasion-driven styles at accessible price points. In 2025, Petal & Pup delivered solid performance, supported by continued strength in dresses and event wear while broadening its assortment to capture more everyday demand and repeat purchases.

The brand’s growing wholesale presence, particularly at Nordstrom, exceeded expectations. Petal & Pup has established a meaningful presence within Nordstrom across all categories, with particular strength in dresses and more casual styles, expanding brand awareness and introducing new customers to the brand. In the fourth quarter, Petal & Pup successfully launched on the rental platform Nuuly, Nykaa Fashion in India, and Australian department store David Jones, with strong initial results out of the gates, and plans to further expand on each of these platforms are already underway. Looking ahead to 2026, the focus remains on deepening product differentiation and strengthening brand equity.

Petal & Pup will continue to expand its range with a clear emphasis on outfitting its core customer across every aspect of her life. This includes a stronger push into casualwear and elevated separates, particularly tops and knitwear, to complement the brand's established strength in dresses. By building a more balanced and versatile assortment, the brand aims to drive increased repeat rate over time. This strategy will be underpinned by a continued commitment to enhanced quality, compelling price points, effortless outfitting, and a trend-led perspective. Petal & Pup is also elevating its brand storytelling and community engagement, shifting beyond purely product-led campaigns toward more cohesive and authentic brand narratives.

The recent refresh of its branding, website, and visual identity supports this evolution, alongside the launch of an evergreen brand campaign across social channels and key out-of-home placements this month. Omnichannel and international expansion also remains a key growth driver for Petal & Pup. In addition to continued expansion with Nordstrom, Nuuly, and existing partners, Petal & Pup will launch with Dillard's, Von Maur, and select independent boutiques in 2026, further extending its reach and awareness in the U.S. market. I am confident that Petal & Pup is well positioned for continued growth in 2026 as it strengthens its assortment and expands its reach. Turning now to our streetwear brands.

Culture Kings remains one of the most distinctive experiential retail concepts in the market, blending global streetwear, music, sports, and culture into a highly immersive customer experience. In 2025, the focus was on strengthening the fundamentals of the business in both the U.S. and Australia to position the brand for accelerated growth in 2026 and beyond. Culture Kings’ exclusively designed in-house brands are a key differentiator and central to its growth strategy. In 2025, the company intensified its focus on this portfolio, including brands such as Minimal, Loiter, 73 Studio, Carre, St. Morita, and American Thrift, by evolving its merchandising approach, relaunching priority brands, and elevating product quality.

Investments in Loiter drove double-digit revenue and gross profit dollar growth in 2025, validating the strategy. Building on that momentum, 73 Studio and American Thrift were relaunched in the fourth quarter with a refined design direction and stronger go-to-market execution. Early sell-through and improved new style velocity from the refreshed brands has been encouraging, reinforcing confidence in the owned brand strategy heading into 2026. Owned brand penetration is expected to continue expanding, supported by faster product cycles, tighter assortments, and a clear brand point of view. This more focused product strategy is designed to drive stronger full-price sell-through and support margin expansion in the year ahead.

In addition to the in-house brands, Culture Kings continues to enhance its third-party assortment from leading national headwear and footwear brands such as New Era, ASICS, Adidas, and more, to complete the streetwear world. Beyond its online channel, Culture Kings’ retail footprint and retail-tainment ethos remain central to the model. The stores, including the Las Vegas flagship and nine locations across Australia and New Zealand, serve as meaningful revenue drivers and powerful marketing engines. Each location delivers a differentiated and immersive experience that builds loyalty, drives customer acquisition, and reinforces the brand’s authority in streetwear.

In the fourth quarter, the team relocated the Brisbane store into a newly renovated 5,000 square foot format designed to serve as a more productive and repeatable model. While the store retains high-impact features such as the hat wall and basketball court, the format is being tested as a prototype for future U.S. expansion. Early results have been encouraging, and the learnings will directly inform the next phase of U.S. store growth. We are actively pursuing a location for the second U.S. store and will provide updates on future calls.

Looking ahead to 2026, I am confident that Culture Kings is set up for success, with operational improvements in the rearview, a healthier inventory position, strong and accelerating performance in its in-house brands, and more stores on the horizon. I am encouraged by the progress and excited for the future. Before I turn it over to Kevin, I want to again express my gratitude to our incredible team. The past year required agility, resilience, and an unwavering focus on execution. Our teams across all functions rose to the challenge, successfully navigating the supply chain transformation while continuing to deliver compelling products and experiences to our customers.

I am confident that we have the right operational foundation, the right team, and the right strategic priorities to drive accelerating growth in 2026 and beyond. With that, I will turn it over to Kevin.

Kevin Grant: Thanks, Ciaran. Turning to our financial results for the fourth quarter. Net sales increased 3.1% to $164 million, in line with our guidance. As we noted on our third quarter call, due to the accelerated supply chain transition, we entered October with meaningful out-of-stock positions in key best-selling styles, which limited sales in the early part of the quarter. But inventory levels stabilized as we moved through the quarter, and we ramped up our marketing engine to regain sales momentum. Net sales in Australia were also in line with expectations, increasing 1.6% to $58.1 million. As Ciaran mentioned, we entered 2026 with strong momentum, with first quarter-to-date net sales growth in the mid-single digits.

As a reminder, as we continue expanding across channels, the shape of the P&L will continue to evolve, though we expect overall margin dollars to increase as we pursue the growth opportunity ahead of us. Total orders were 2.2 million, up 6.4% year over year. Trailing twelve-month active customers, excluding wholesale, were 4,180,000 compared to 4,070,000 a year ago. Average order value was $76, down 2.6% year over year. Turning to our profitability metrics, gross margin declined 30 basis points to 55.6% compared to 55.9% last year, reflecting the impact of the out-of-stocks in best sellers in October, partially offset by a higher mix of retail stores.

Selling expenses were $51 million, or 31% of net sales, reflecting the retail footprint expansion and one-time fulfillment charges. Marketing expense was $20.5 million, or 12.5% of net sales. General and administrative expenses were $30.3 million, or 18.5% of net sales. G&A expenses increased year over year primarily due to charges for a nonrecurring legal matter as well as an increase in headcount to support our channel expansion strategy. We delivered adjusted EBITDA of $2.5 million, or 1.5% of net sales. For the full year, net sales increased 4.4% to $600 million, in line with our expectations and compared to $574.7 million a year ago. On a constant currency basis, net sales increased 5%.

Adjusted EBITDA for the year was $19.7 million, or 3.3% of net sales, compared to $23.3 million, or 4.1% of net sales a year ago, as tariffs and inventory disruptions pressured results. As Ciaran mentioned, the tariff headwinds, partially offset by our mitigation efforts, negatively impacted margin by approximately 100 basis points. Turning to the balance sheet, we ended the year with $20.3 million in cash and cash equivalents, compared to $24.2 million at the end of 2024. Debt at the end of the quarter was $111.1 million, compared to $111.7 million at the end of 2024. As a reminder, we successfully refinanced our debt in October and extended the maturity to 2028.

As Ciaran mentioned, we are really pleased with the progress we have made improving the quality and quantity of our inventory. We ended the quarter with $86.2 million in inventory, down 10% compared to $95.8 million at the end of 2024. Turning now to our outlook. We are entering 2026 with momentum and a stronger operating foundation. Our outlook is based on the tariff rates in place exiting 2025 and does not include the impact of any potential refunds as a result of the Supreme Court's decision to overturn the IEPA tariffs. For fiscal 2026, we expect net sales to be between $625 million to $635 million, representing growth of 4.2% to 5.8%.

We expect adjusted EBITDA of between $27 million and $29 million. For modeling purposes, we anticipate fiscal 2026 stock-based compensation of approximately $6 million to $7 million, depreciation and amortization expense of roughly $20 million to $21 million, interest and other expense of approximately $16 million to $18 million, an effective tax rate of negative 10%, CapEx between $18 million to $20 million, and weighted average diluted share count of approximately 11 million. For the first quarter, as mentioned, quarter-to-date net sales growth is tracking mid-single digits with strength in our online channels in the U.S.

As a reminder, in March, Princess Polly and Petal & Pup launched across all Nordstrom stores, creating a more challenging wholesale comparison as we progress through the quarter. For the first quarter, we expect net sales to be between $130 million and $132 million, reflecting a low single-digit growth rate. For modeling purposes, for Q2 through Q4, we expect high single-digit growth on a two-year stack. Due to the timing of tariff impacts, adjusted EBITDA comparisons will be more challenging in the first quarter before normalizing in the second quarter. We expect adjusted EBITDA between $1.5 million and $2 million in the first quarter.

For modeling purposes, for Q2 and Q3, we expect an EBITDA margin expansion of about 100 basis points and a larger expansion in Q4 compared to the same period last year. In closing, entering 2026, the business is operating from a position of greater strength. The progress we made in 2025 across supply chain diversification, inventory discipline, and omnichannel expansion has positioned the business to accelerate growth and improve profitability in the year ahead. As a result, we believe 2026 represents an inflection point for the company, with clear drivers to support top-line growth and margin expansion. With that, we will open the call for questions.

Operator: Thank you. We will now be conducting a question-and-answer session. Our first question comes from Ryan Meyers with Lake Street Capital. You may proceed with your question.

Ryan Meyers: First off, just thinking about the EBITDA guide for 2026, obviously a pretty significant step up here from what you reported in 2025. Can you just walk us through the key drivers of that? Is most of that coming from the gross margin side? Are we seeing any operating expense leverage? And then are there any lower nonrecurring costs? Just kind of bridge that gap for us would be helpful.

Kevin Grant: Yes, thanks, Ryan, for the question. Yes, we are coming out of the quarter with good momentum, that strong performance for the year, over 4% growth, 5% on a constant currency basis. We have mentioned we have seen mid-single-digit growth so far in Q1. The guide for the year on the top line is that sort of mid-single digits. And then from a profit perspective, we mentioned EBITDA; we expect, over the entire year, about 120 basis points of EBITDA expansion. I would say the bulk of that, Ryan, comes from gross margin. We mentioned the headwind of 100 basis points in gross margin in FY 2025, so we will be moving past that in the year.

We are finishing inventory in a really strong position, down 10% year over year and down 10% sequentially, so we are feeling great about that. We will have some channel mix impact in the gross margin as well. The balance of the EBITDA improvement comes across the rest of the operating expense lines. As mentioned, we will continue to see the shape of the P&L move as the channels change the shape of the P&L, but overall, we feel really good about that guidance. And then on the nonrecurring charges, not really anything of note for the guide for FY '26.

Ryan Meyers: Then just switching to the retail business, can you tell us what percentage of the revenue mix now comes from retail? Obviously, it is pretty significant store openings in 2025, expected again here in 2026. Is that starting to become a more meaningful percentage of the overall revenue mix? And then how should we think about the growth of the stores, the revenue growth at the stores relative to the direct-to-consumer business? Is the growth outpacing that there? Just any more details on that as it is becoming a larger portion of the business?

Ciaran Long: Yes, Ryan, we are really happy with the store performance, and I think for us, seeing really good productivity on a square-foot basis in the Princess Polly stores, also really strong four-wall profitability. I feel good about the opportunity that we have to continue to lean into stores. We now have 13 open in the U.S., which is great progress. As we mentioned, we have signed eight more leases, and I would say four to five of them will open in FY '26. So we are going to continue to lean into the opportunity that we have with the stores. It is tremendous growth. It is also great for us bringing in new customers.

We are also seeing a nice halo effect to the online business from the stores. So I think just more and more ahead of us.

Ryan Meyers: Got it. Thank you for taking my questions.

Operator: The next question comes from the line of Dana Telsey with Telsey Group. You may proceed with your question.

Dana Telsey: Hi, good afternoon, everyone. As you think about the Princess Polly business and the opening of the eight stores, how do you envision the business retail versus wholesale, your direct online? What do you want the complexion to look like, and can you talk about what the gross margin differential is between?

Ciaran Long: Yes, sure, Dana. Look, I think there is tremendous opportunity. And just as a reminder, Princess Polly is about half the revenue for the group at the moment. Thirteen stores open, also a great presence in Nordstrom across all Nordstrom doors in the U.S., just like the Petal & Pup brand has, and we are seeing really good response rates across all of the channels for new and existing customers. From a long-term perspective, we are going to continue to grow the online business; we still have a lot of opportunity there. But from wholesale and stores, we are extremely early.

As it relates to those, I would see the focus from the Princess Polly team is on opening stores and building out that store footprint. I would say on the Petal & Pup team, they are more focused on the wholesale opportunity in front of them, and we mentioned a few of the new partners that they have this year and coming in 2026. From a margin perspective, they are all profitable channels, all bringing new customers. We do see gross margins a little bit higher in the stores than online as the stores are a little bit less promotional at this stage.

Obviously, gross margin is lower in the wholesale channel but very limited selling expenses and marketing in those channels as well. So, on a contribution profit basis, pretty similar across them all, and it really gives us confidence in our ability to push into them all and that they will all be margin accretive.

Dana Telsey: And just lastly, the shaping of the year, how you are thinking of the cadence with top line and adjusted EBITDA, given the lapping of tariffs and the supply chain transition that you had?

Kevin Grant: Yes, Dana. So from a top-line perspective, we have talked about that sort of mid-single-digit growth for the full year and the guide for FY 2026. As you alluded to, there is definitely a lot of disruption with the tariffs and supply chain issues in FY 2025 that disrupts our normal cadence. That is why we are guiding, from a top-line perspective, the growth from Q2 through Q4 on a two-year stack at that high single-digit perspective. We mentioned EBITDA over the balance of the year expanding about 120 basis points, with that really picking up in Q2.

So Q2 and Q3 look very similar and will be about 100 basis points higher than FY '25 with a little bit of a larger impact in Q4.

Dana Telsey: Thank you.

Operator: The next question comes from the line of Eric Beder with SCC Research. Please proceed with your question.

Eric Beder: Good afternoon. Can you talk a little bit about the inventories here? That is a really nice number, down 10%. I am assuming, given the tariffs, that the SKU count is down even more. Is that something that we should be thinking about going forward for this year given the ups and downs in the tariffs last year?

Ciaran Long: Yes, Eric, it is really good to see inventory down 10% and doing that in a period where we are growing the overall business 4.4% for the year, and in a period with such progress on diversifying our sourcing last year as well. I would say a big driver of that change in inventory is the progress we have made at the Culture Kings business in moving them onto test and repeat. It is a slow build to change that, and it is a transformational difference for the group. But the leadership team that has been in there now for twelve months and longer has made huge progress, and that is a big driver of the inventory change.

Philosophically, we always want to have lower inventory growth than sales growth, and that is how we are looking to grow through this year.

Eric Beder: Okay. And Australia, New Zealand, four quarters of growth here. Is this market back, and how can you leverage that even more now that pretty much the inventories have been cleaned up and some of the other positives have rolled through there?

Ciaran Long: Yes, it is great to see four quarters in a row of growth in the Australia region. Petal & Pup and Princess Polly have been doing well there because they have been on that test-and-repeat model. Now that Culture Kings is, and with the new leadership and ways of working that the team has there, we are really seeing progress. We are seeing real improvements in productivity for new products and new SKUs that we are bringing in. So I think being back to growth there is great. We also talked about relocating a store in Brisbane for Culture Kings, down to a 5,000 square foot size.

It is a new model that we are testing there; we can do that quickly and then leverage the rollout in the U.S. For us, we are expecting moderate growth in Australia, but we are glad that it is back to growth and will be consistently there.

Eric Beder: And just to follow up on that, what is the average size of the Culture Kings stores outside of the Brisbane store in Australia and New Zealand?

Ciaran Long: Traditionally, we were more in that 8,000 square foot size, and as a reminder, the Vegas store in the U.S. is bigger again. For us, as we look to scale in the U.S., it is about retaining those key aspects of the retail-tainment that is core to Culture Kings, sets it apart from anybody else out there, and is really the opportunity for us to show off the great 1P brands that we have in that business. We are fortunate that we can test a bit quicker down in Australia from the store side, and also, being the off-season there does give us a good view into what should be best sellers in the U.S. going forward.

Eric Beder: Great, thank you.

Operator: Our last question comes from Ashley Owens with KeyBanc Capital Markets. Please proceed.

Ashley Owens: Hi, great, thanks so much. So maybe to start, correct me if I am wrong, but I believe I heard that the Q1 quarter-to-date growth has been mid-single digits. Could you just provide more detail as to what is shaping the key assumptions driving deceleration from current trends in the quarter, and maybe from a brand perspective where that moderation is coming from, or if this is just general conservatism built in?

Kevin Grant: Yes, hey, Ashley. Good observation. Yes, we have seen strong mid-single-digit growth so far in the quarter, and that is largely coming from the U.S. online business, which is great to see. Just as a reminder, we launched in all the Nordstrom doors for both Princess Polly and Petal & Pup in March 2025, and that is what is driving that more difficult comp as we move through the quarter and explains where we have guided for Q1.

Ashley Owens: Okay, that is super helpful. And then maybe just to follow up, thinking about some of the other drivers of growth in 2026, how we should break this down or balance between order growth and AOV as the primary drivers. I know AOV was declining through the first half of the year, then we are also lapping really strong order volume in Q2 and then a little bit in Q3 as well. So just any insight there would be helpful. Thank you.

Kevin Grant: Yes, for sure. We are pleased to see, in the year, growth in our active customers as well as strong growth in orders. Q4 order growth was over 6%, and that is really what drove the top-line performance. With our evolving channel mix, you are going to see some up and down in the AOV. We have channels like wholesale that will drive the AOV up. We have other channels like TikTok and new categories that will drive the opposite. We have modeled AOV flat for FY '26, with the top-line growth really coming from growth in orders.

Ashley Owens: Great. Thank you so much.

Operator: Ladies and gentlemen, this now concludes our question-and-answer session and does conclude today's conference as well. Thank you for your participation. Please disconnect your lines and have a wonderful day.