a.k.a. Brands Holding Corp. Q2 FY2025 earnings call

• Net sales exceeded expectations, growing 9.5% on constant currency basis to $160.5 million, fifth consecutive quarter of growth. • U.S. was largest and fastest-growing region with 14% net sales growth. • Australia region had flat net sales vs last year with margin improvement. • Active customers grew 3% on trailing 12-month basis, global orders increased by 7%. • Omnichannel expansion plans on track, new channels exceeding expectations. • Princess Polly opened 3 stores in Q2, plans 8-10 more in 2026; received B Corp Certification. • Petal & Pup had strong performance at Nordstrom, with casual styles showing growth. • Culture Kings and mnml saw improvement in Australian business with in-house brands revenue growth. • Tariff mitigation efforts included vendor discounts, sourcing diversification, and strategic price increases.

Princess Polly, the largest brand accounting for approximately half of total revenue, saw strong performance with net sales growth, successful store openings, and a B Corp Certification. Petal & Pup resonated with its core 25-40-year-old female customer, had strong performance at Nordstrom, and saw growth in casual styles. Culture Kings and mnml, streetwear brands, showed improvement in the Australian business with in-house brands revenue growth and a partnership with Adidas. Net sales grew approximately 9.5% on a constant currency basis to $160.5 million, with the U.S. delivering 14% growth and Australia flat but with margin improvement. Active customers grew 3% on a trailing 12-month basis, and global orders increased by 7%.

• Full-year net sales outlook raised to $608M-$612M (5%-7% growth), up from prior 4%-6% range. • Adjusted EBITDA outlook raised to $24.5M-$27.5M. • Third quarter net sales expected to be between $154M and $158M. • Third quarter gross margin expected in range of 57.6%-57.8% due to tariff impact. • Third quarter adjusted EBITDA expected between $7.3M and $7.7M.

• Tariff impact remaining a headwind in the near term, with similar 120 basis point headwind expected in Q3. • Supply chain transition challenges and potential disruptions. • Macroeconomic uncertainties affecting consumer spending and market conditions.

Q: What has been the learning from store openings and what's being incorporated in newer stores?

A: We've learned about merchandising, visual merchandising, and the need to increase store size to represent broader assortment, leading to better conversion. New stores incorporate deeper experience in store merchandising and visual merchandising.

Q: How should we think about debt due in 2026?

A: We've generated cash from operations, brought debt down, and have confidence in refinancing the debt due to strong performance and brand momentum.