0001865107-26-000008
SEC filinga.k.a. Brands Holding Corp. reported FY 2025 net sales of $600.2 million, representing 4% year-over-year growth from $574.7 million in FY 2024. The company expanded its gross margin by 30 basis points to 57.3% and increased U.S. net sales by 7% to $394.3 million. Despite revenue growth, the company reported a net loss of $31.4 million, an increase from a $26.0 million loss in the prior year, primarily due to higher operating expenses. Operating cash flow improved significantly to $16.4 million from $0.7 million in FY 2024, while free cash flow was negative $0.6 million. The company ended the year with $20.3 million in cash and cash equivalents, $299.6 million in total liabilities, and $97.8 million in stockholders' equity.
In FY 2025, a.k.a. Brands Holding Corp. achieved net sales of $600.2 million, representing 4% year-over-year growth from $574.7 million in FY 2024. The company expanded its gross margin by 30 basis points to 57.3% and increased U.S. net sales by 7% to $394.3 million. Despite revenue growth, the company reported a net loss of $31.4 million, an increase from a $25.99 million loss in the prior year, primarily due to higher operating expenses. Operating cash flow improved significantly to $16.4 million from $0.7 million in FY 2024, while free cash flow was negative $0.6 million. The company ended the year with $20.3 million in cash and cash equivalents, $299.6 million in total liabilities, and $97.8 million in stockholders' equity.
The company's revenue growth was driven by a 6% increase in the number of orders processed (7.77 million vs. 7.32 million in FY 2024), partially offset by a 3% decrease in average order value ($77 vs. $79). On a constant currency basis, net sales would have increased 5% year-over-year. The company attracted 4.2 million active customers, a 3% increase from the prior year. Geographic performance showed U.S. net sales growing 7% to $394.3 million, while international sales outside the U.S. and Australia/New Zealand represented $20.3 million or 3% of total sales.
Gross profit increased 5% to $344.1 million, with gross margin expanding 30 basis points to 57.3%. The margin improvement resulted from a higher mix of retail stores, improved inventory position, more full-price selling, and targeted price increases, partially offset by the impact of tariffs and duties. Operating expenses increased to $362.1 million from $337.8 million in FY 2024, with selling expenses rising 10% to $177.8 million primarily due to additional store openings. Marketing expenses decreased 1% to $74.1 million, while general and administrative expenses increased 9% to $110.2 million due to higher wages, incentive compensation, and professional services.
Net cash provided by operating activities improved to $16.4 million from $0.7 million in FY 2024, driven by better inventory sell-through and increased lease incentive payments. Free cash flow was negative $0.6 million, an improvement from negative $10.9 million in the prior year. The company had $20.3 million in cash and cash equivalents, with total cash, cash equivalents and restricted cash of $48.4 million. Total assets were $397.4 million, including $129.5 million in current assets and $93.7 million in goodwill. Total liabilities were $299.6 million, including $105.0 million in current liabilities and $104.7 million in long-term debt. Stockholders' equity was $97.8 million.
The company plans to open 8-10 additional Princess Polly stores in 2026 and anticipates capital expenditures of $14.0-$16.0 million for new stores, infrastructure, and technology investments. Management expects to continue growing wholesale and marketplace initiatives with partners such as Dillard's, Nuuly, Stitch Fix, Nykaa, and Von Maur. The company intends to expand internationally, with plans to open distribution for Princess Polly in the U.K. and enter key markets through strategic wholesale partnerships. Risk factors include economic downturns affecting consumer discretionary spending, changes in U.S.-China trade policies and tariffs, rapid changes in consumer preferences, and challenges in customer acquisition and retention.