Digital Brands Group, Inc. Q4 FY2023 earnings call

• Fourth quarter was the bottom of Sundry's, with first quarter results and Q2 wholesale bookings reflecting that. - Almost achieved breakeven net income excluding non-cash expenses. - Revenue growth set to re-accelerate with lower operating expenses. - Net revenues up 6.8%, gross margin up, G&A and sales/marketing expenses decreased. - Net loss per share improved when excluding non-cash charges. - Excited about first quarter earnings in May and outlet store opening in Allen, Texas.

Net revenues increased 6.8% to $14.9 million compared to $14 million a year ago, excluding revenue from Harper & Jones which was spun out. Gross margin increased 10.2% to $6.5 million, with gross profit margins moving to 43.9% from 42.5%. G&A expenses, including non-cash items, decreased 12.7% to $14.3 million, while sales and marketing expenses decreased 18.5% to $4 million. Net loss per share attributable to common shareholders was $10.2 million or $20.46 per share, but net loss excluding non-cash charges and add backs was $8 million. For the fourth quarter specifically, net revenues were $2.8 million, gross profit was $0.5 million, G&A expenses including non-cash items decreased 30.6% to $2.2 million, sales and marketing expenses decreased 13.4% to $0.8 million, and net loss per diluted share excluding non-cash charges was $0.6 million.

• Expect first quarter earnings in May showing business strength from wholesale shipments and bookings. - Anticipate preliminary results from outlet store opening in Allen, Texas this weekend. - 2024 expected to be the inflection point year for the business.

• Forward-looking statements subject to risks and uncertainties beyond the company's control, future results could differ materially from projections.

Q: Why filing on Friday?

A: First reason is good corporate governance. Second, it was the last day of the 60-day lookback period to catch the highest stock price ending that day, providing option value in case needed cash