Luvu Brands, Inc. reported its financial results for the third quarter of fiscal 2024, revealing a decline in net sales and an increase in net loss compared to the same period in the previous year. For the three months ended September 30, 2024, net sales totaled $5.756 million, a 6% decrease from $6.126 million in Q3 2023. This decline was primarily attributed to a 6% drop in sales of the Liberator product line, which faced reduced wholesale channel sales. Conversely, sales of the Jaxx product line increased by 1%, supported by targeted marketing efforts.

Gross profit for the quarter was $1.517 million, down from $1.582 million in the prior year, maintaining a consistent gross margin of 26%. Total operating expenses rose to $1.639 million, representing 28% of net sales, compared to $1.614 million, or 26% of net sales, in Q3 2023. The company reported an operating loss of $122,000, worsening from a loss of $32,000 in the same quarter last year. The net loss for the quarter was $210,000, compared to a loss of $126,000 in Q3 2023, primarily driven by decreased sales in the Liberator line.

Cash and cash equivalents as of September 30, 2024, were $1.068 million, a slight increase from $1.028 million as of June 30, 2024. However, total assets decreased to $8.812 million from $9.131 million, while total liabilities fell to $6.183 million from $6.301 million. Stockholders' equity also declined to $2.629 million from $2.830 million.

The company’s deferred revenue increased to $20.029 million from $19.454 million as of June 30, 2024. Notably, Luvu Brands continues to rely heavily on its e-commerce platform, with sales through Amazon accounting for 38% of net sales in Q3 2024, up from 37% in the previous year.

In terms of strategic developments, Luvu Brands has maintained its focus on product innovation, with research and development expenses rising to $42,594 in Q3 2024, compared to $32,722 in the same period last year. The company has also been managing its debt, with total current debt increasing to $1.871 million from $1.639 million, while long-term debt decreased to $534,000 from $855,000.

Overall, Luvu Brands is navigating a challenging market environment, with efforts to enhance its product offerings and manage operational costs amid fluctuating sales performance.