KEEMO Fashion Group Reports 24% Revenue Decline but Improved Net Loss in Latest Quarter

KEEMO Fashion Group Limited reported its financial results for the three months ending October 31, 2024, revealing a revenue of $4.946 million, a decrease of 24% from $6.516 million in the same period last year. The company's cost of revenue also declined to $2.438 million from $3.405 million, resulting in a gross profit of $2.508 million, down from $3.111 million. The net loss for the quarter was $8.401 million, significantly improved from a loss of $25.867 million in the prior year, indicating a reduction in operational losses.

The company's balance sheet as of October 31, 2024, showed total current assets of $26.370 million, a decrease from $28.474 million as of July 31, 2024. Current liabilities increased to $83.716 million from $77.419 million, leading to a shareholders' equity deficit of $57.346 million, compared to a deficit of $48.945 million in the previous quarter. The increase in liabilities was primarily attributed to an increase in amounts due to a director, which rose to $80.516 million from $69.919 million.

Strategically, KEEMO Fashion Group underwent a ten-for-one stock split effective August 8, 2024, which increased the number of issued and outstanding shares from 5.5 million to 55 million. This move was aimed at enhancing the liquidity of the company's stock. The company continues to focus on wholesaling apparel to distributors in China, sourcing directly from manufacturers, and does not operate any production facilities.

Operationally, KEEMO reported a net cash used in operating activities of $1.280 million for the quarter, a significant improvement from $24.689 million in the same period last year. The company ended the quarter with cash and cash equivalents of $18.141 million, compared to $4.054 million a year earlier. Despite the challenges, the company is optimistic about its future, relying on anticipated revenue growth and continued financial support from shareholders to navigate its current financial difficulties.

Looking ahead, KEEMO Fashion Group has indicated that its ability to continue as a going concern is contingent upon generating profits and securing necessary financing. The company expects to finance its operations through revenue and ongoing support from shareholders, who have expressed intent to provide additional funding if required. The management remains focused on improving operational efficiency and expanding its market presence in the apparel sector.