Q2 2024 AKA Brands Holding Corp Earnings Call Transcript
Key Points
- Net sales exceeded expectations with a year-over-year growth of more than 9%, driven by strong performance in the US market.
- The US business saw significant acceleration with net sales growth of over 19%, contributing to 64% of total net sales.
- Gross margin improved to 57.7%, up 80 basis points from the previous year, aided by reduced airfreight costs and strong full-price selling.
- Adjusted EBITDA increased by 44% year-over-year, reaching $8 million, surpassing the high end of guidance.
- Active customer growth was strong, with a 12% increase over the prior year, adding 420,000 new customers in the last 12 months.
- Sales in the Australia and New Zealand region contracted by 5% year-over-year, indicating challenges in these markets.
- Average order value decreased by 4.9% compared to the previous year, partly due to softer sales in Australia and New Zealand.
- Selling expenses increased to 27.7% of net sales, up from 26.4% a year ago, due to growing marketplace initiatives and additional stores.
- The company anticipates a slowdown in growth for Q3, with projected net sales growth of only 1% to 2% at the midpoint.
- The company faces potential risks related to tariffs on goods from China, where the majority of their third-party suppliers are based.
Greetings, and welcome to the a.k.a. Brands Holding Corp. second quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, K.C White. Thank you. You may begin.
Good afternoon. Thank you for joining a.k.a. Brands second quarter fiscal 2024 conference call to discuss the results released this afternoon, which can be found on our website at ir.aka-brands.com. With me on the call today is Ciaran Long, Interim Chief Executive Officer and Chief Financial Officer.
Before we get started, I'd like to remind you of the company's Safe Harbor language. Management may make forward-looking statements, which refer to expectations, projections, and other characterizations of future events including guidance and underlying assumptions.
Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed. For a further
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