US' a.k.a. Brands reports gross profit of $68.5 mn in Q1 FY23

Gross margin in Q1 FY23 remained relatively stable at 56.9 per cent, compared to 56.8 per cent in the first quarter of the previous fiscal year. Selling expenses amounted to $34.4 million, down from $40.4 million in Q1 FY22. However, selling expenses as a percentage of net sales increased to 28.6 per cent from 27.2 per cent in Q1 FY22, due to higher distribution and store facility costs, as well as a lower average order value. Improved operational efficiencies in fulfilment and outbound shipping partially offset these increases, the company said in a media release.

Marketing expenses for Q1 FY23 reached $14.8 million, slightly down from $15.7 million in Q1 FY22. Despite this decrease, marketing expenses as a percentage of net sales rose from 10.6 per cent to 12.3 per cent due to lower sales volume compared to the prior year.

General and administrative expenses in Q1 FY23 increased to $25.9 million from $24.8 million in Q1 FY22. General and administrative expenses as a percentage of net sales also increased from 16.7 per cent to 21.5 per cent.

Adjusted EBITDA for Q1 FY23 was $2.2 million, or 1.8 per cent of net sales, compared to $10.7 million, or 7.2 per cent of net sales, in Q1 FY22.

“I’m proud of our solid first quarter performance, which exceeded our expectations on both sales and adjusted EBITDA, driven by the strong execution across our brands and our continued focus on managing the business prudently,” said Ciaran Long, interim chief executive officer and chief financial officer of a.k.a. Brands. “Thanks to the hard work of our teams, we advanced our strategic initiatives, while simultaneously improving operating efficiencies across the business. We are setting the stage for improved operating performance as the year progresses. I’m particularly pleased with the incremental pay down of our debt in the quarter and our diligent approach to managing inventory. Our inventory balance is down 11 per cent from the end of fiscal 2022 and down 7 per cent from the first quarter last year.”

Fibre2Fashion News Desk (DP)