The increase was driven by a 4.2 percent increase in the number of orders, partially offset by a 1.3 percent decrease in average order value. Active clients grew by 3.1 percent in the last twelve months.
“We had a strong start to the year which marks a significant turning point in our journey,” he said. Ciaran Long, CEO of also known as Brands. “Over the past three years, we have fundamentally repositioned the business to improve profitability and durability. We have expanded distribution in stores, wholesalers and markets, strengthened our operating base and instilled greater financial discipline throughout the business.”
aka Brands' first-quarter 2026 net sales increased 3 percent to $132.5 million, driven by higher orders and active customer growth. Net loss narrowed to $7.1 million, while adjusted EBITDA nearly doubled to $5.1 million. Gross margin improved due to inventory discipline and full-price sales. The company maintained FY26 sales guidance and raised its adjusted EBITDA outlook.
Gross margin expands thanks to inventory discipline
Net loss narrowed to $7.1 million, or $0.66 per share, in the first quarter of 2026, compared with a net loss of $8.4 million, or $0.78 per share, a year earlier. Adjusted EBITDA increased to $5.1 million, or 3.9 percent of net sales, from $2.7 million, or 2.1 percent of net sales, in the first quarter of 2025, the company said in a news release.
Gross margin expanded to 63.1 percent from 57.2 percent in the corresponding quarter last year. Adjusted gross margin increased 180 basis points to 59 percent, supported by an improved inventory position, stronger full-price selling and the benefit of the IEEPA tariff adjustment. These gains were partially offset by a $12 million write-off of streetwear inventory tied to the company's transition to its test-and-repeat model, as well as other fee-related charges.
Selling expenses increased to $41 million from $38.2 million, primarily due to higher store selling expenses as the company expanded its retail presence. Marketing expenses rose to $16.8 million from $15.2 million, while general and administrative expenses rose to $30 million from $25.7 million.
Long said first-quarter results showed the company's strategic work was translating into its financial performance. It added that, excluding one-time adjustments, gross margin expanded significantly year-over-year, driven by improved inventory discipline, increased full-price direct selling and the continued rollout of the test-and-repeat model.
The company said its brands continued to advance their strategic priorities during the quarter. Princess Polly remains on track with its retail expansion, with 17 stores in the US and two stores in Australia expected to be open by the end of the year, along with a pop-up store at The Grove in Los Angeles later this month. Petal & Pup generated wholesale momentum through an expanding base of retail partners, while Culture Kings' investment in its internal brand portfolio supported improved gross margin and comprehensive pricing mix.
aka Brands raises EBITDA outlook
For fiscal 2026, aka Brands maintained its net sales outlook at $625-635 million, while raising its adjusted EBITDA guidance to $30-32 million from the previous range of $27-29 million. Capital expenditures are expected to reach between $18 million and $20 million. For the second quarter (Q2) of 2026, the company expects net sales of $160 million to $164 million and adjusted EBITDA of $8.5 million to $9 million.
Fiber2Fashion News Desk (SG)
