a.k.a. Brands Holding Corp. Reports Improved Financial Performance in Q3 2024

a.k.a. Brands Holding Corp. reported significant financial developments in its 10-Q filing for the third quarter of 2024, reflecting a positive trajectory in revenue and profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, net sales reached $149.9 million, a 6% increase from $140.8 million in the same period of 2023. This growth was primarily driven by a 6% rise in the number of orders processed, particularly in the U.S. market. Gross profit for the quarter also improved, totaling $86.9 million, up 11% from $78.0 million year-over-year, resulting in a gross margin increase from 55% to 58%.

Operating expenses saw a substantial decrease, totaling $89.0 million for the third quarter of 2024, down from $148.3 million in the prior year. This reduction was attributed to lower general and administrative expenses, which included a $2.0 million accrual for a legal matter. The company reported a loss from operations of $(2.1) million, a significant improvement from a loss of $(70.3) million in the same quarter of 2023. The net loss for the quarter was $(5.4) million, compared to $(70.4) million in the prior year, indicating a marked improvement in financial performance.

For the nine months ended September 30, 2024, net sales totaled $415.7 million, a 5% increase from $397.3 million in the same period of 2023. Gross profit for this period was $238.6 million, up from $223.8 million, while the net loss narrowed to $(16.6) million from $(85.0) million year-over-year.

The company’s cash and cash equivalents increased to $23.1 million as of September 30, 2024, compared to $21.9 million at the end of 2023. Total assets rose to $404.1 million, up from $361.7 million, while total liabilities increased to $204.4 million from $176.1 million, primarily due to a rise in long-term debt, which reached $105.6 million.

Strategically, a.k.a. Brands continues to focus on expanding its portfolio of next-generation fashion brands targeting younger consumers. The company has also been actively managing its share repurchase program, repurchasing 36,144 shares for $0.7 million during the third quarter.

Despite these positive developments, the company acknowledged material weaknesses in its internal controls, which it is actively addressing through enhanced training and the implementation of an Enterprise Resource Planning (ERP) system. The company remains committed to improving its operational effectiveness and compliance with regulatory requirements.