a.k.a. Brands Q3 2025 Earnings Report

a.k.a. Brands EPS Results

• Actual EPS: -$0.46
• Consensus EPS: -$0.44
• Beat/Miss: Missed by -$0.02
• One Year Ago EPS: N/A

a.k.a. Brands Revenue Results

• Actual Revenue: $147.08 million
• Expected Revenue: $154.87 million
• Beat/Miss: Missed by -$7.80 million
• YoY Revenue Growth: N/A

a.k.a. Brands Announcement Details

• Quarter: Q3 2025
• Date: 11/5/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, November 5, 2025
• Conference Call Time: 4:30PM ET

a.k.a. Brands (NYSE:AKA) operates a portfolio of online fashion brands in the United States, Australia, and internationally. The company offers streetwear apparel, dresses, tops, bottoms, shoes, headwear, and accessories through its online stores under the Princess Polly, Petal & Pup, Culture Kings, and mnml brands. It also operates physical stores under the Culture Kings brand. The company was founded in 2018 and is headquartered in San Francisco, California.

a.k.a. Brands Q3 2025 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: The company's swift supply‑chain transition caused temporary supplier delays and out‑of‑stocks that reduced fashion newness, contributing to a ~2% YoY decline in Q3 net sales and a ~3.7% drop in AOV.
• Positive Sentiment: Inventory levels have improved entering the holiday season, with fourth‑quarter net sales to date tracking positive low single digits and management expecting year‑end inventory to be roughly flat YoY.
• Positive Sentiment: Profitability and the balance sheet strengthened: Q3 adjusted EBITDA was $7M (>$17M YTD), gross margin expanded ~100 bps, net leverage fell to 3.8x, and the company refinanced to a 2028 facility ($85M term loan + ~$35M revolver).
• Positive Sentiment: Brand growth and omnichannel expansion remain a focus—Princess Polly is opening new U.S. and Australian stores (12 open, Bondi store upcoming), plans 8–10 more in 2026, and is driving strong social commerce and wholesale traction across its portfolio.

Presentation

[Operator]

Greetings and welcome to the a.k.a. Brands Holding Corporation Third Quarter 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to turn the conference over to your host today, Emily Schwartz, Investor Relations. Thank you. You may begin.

[Emily Schwartz, Head of Investor Relations at a.k.a. Brands Holding Corp]

Good afternoon. Thank you for joining a.k.a. Brands to discuss our third quarter 2025 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, Chief Executive Officer, and Kevin Grant, 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 further discussion of risks related to our business, please see our filings with the SEC. Please note we assume no obligation to update any such forward-looking statements. This call will also contain non-GAAP financial measures such as adjusted EBITDA and adjusted EBITDA margin.

[Emily Schwartz, Head of Investor Relations at a.k.a. Brands Holding Corp]

Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in the release furnished to the SEC and available on our website. With that, I'll turn the call over to Ciaran.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Good afternoon, everyone, and thank you for joining us to discuss our third quarter results. We made meaningful progress on our strategic priorities this quarter. We opened Princess Polly's 11th store at the Westchester Mall, expanded our wholesale partnerships, and successfully refinanced our debt, further strengthening our financial position. Our Australian region continues to grow, and importantly, we continue to advance the optimization of our supply chain. I'm also pleased to report that we delivered $7 million of adjusted EBITDA for the quarter. As I mentioned on our second quarter call in August, we've been swiftly diversifying our supply chain structure to build long-term flexibility and resilience. As we accelerated scaling this transition through the back half of the third quarter, we experienced some transitory and temporary supplier delays that impacted in-stock levels and the overall level of fashion newness, critical components of our operating model.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

These short-term pains were the primary drivers of our softer-than-anticipated sales in the quarter. Since the end of the third quarter, our in-stock levels have gradually improved, which has allowed us to get back to growth, with fourth-quarter growth to date net sales tracking positive low single digits. Importantly, we now feel confident in our inventory levels and our updated supply chain as we head into the holiday season. The transformation of our sourcing ecosystem allows us to maintain the high product quality standards that we and our customers expect, while also working with manufacturing partners across multiple regions that are fully equipped to support and enhance our test and repeat merchandising approach. We're confident that we now have the operations and available capacity with our new and existing suppliers in multiple geographies, allowing us to meet our production needs.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

We remain confident that the swift and comprehensive transformation of our sourcing structure has created a more robust and resilient supply chain, setting the stage for sustained growth ahead. For the third quarter, we delivered net sales of $147 million, representing a 2% decline year over year, but an increase of 4.4% on the two-year stack. As I mentioned, the sourcing transition created some temporary disruptions to our in-stock levels in the U.S., which impacted our ability to meet the strong customer demand we were seeing. Despite the temporary headwinds in the quarter, I'm pleased that we delivered $7 million of adjusted EBITDA. I remain very pleased with our year-to-date performance, reflecting the continued relevance of our brands and the strength of our business model. Year-to-date, net sales are up 5%.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Gross margin has expanded 100 basis points, adjusted EBITDA reached more than $17 million, and we generated $21 million more in cash flow compared to the same nine-month period last year. Looking at the fourth quarter and beyond, we remain committed to building our brands for the long term, delivering high-quality fashion to our customers and balancing both growth and profitability. We remain laser-focused on our strategic growth drivers for the remainder of the year. First, we will attract and retain customers on our direct-to-consumer channels through trend-driven, exclusive merchandising, and distinctive marketing strategies. Secondly, we will expand brand awareness through physical retail growth and select wholesale partnerships. Third, we remain committed to streamlining operations and strengthening our financial foundation to support long-term profitable growth. Turning now to our brand highlights.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Starting with Princess Polly, our largest brand, which represents roughly half of the portfolio, Princess Polly is a leading digital-first fashion brand known for trend-driven, accessible styles and deeply connects with the next generation of consumers. The brand has built a loyal global following online and continues to expand its reach through own stores and select wholesale partnerships. In the third quarter, Princess Polly delivered meaningful progress as the team rapidly advanced the brand's supply chain transformation while continuing to execute on its key merchandising, marketing, and omnichannel initiatives. We continue to see strong demand for Princess Polly in both the U.S. and Australia. Despite the temporary inventory headwinds I discussed, traffic to Princess Polly's sites in the third quarter was up mid-single digits, driven by strong execution during the back-to-school and homecoming season.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Customers responded well to new styles, including casual and elevated basics, with denim delivering double-digit growth in the quarter led by oversized cargoes, barrel fits, and low-rise styles. Princess Polly also continued to strengthen its digital marketing engine with a strong focus on social commerce and TikTok. Through an expanded presence on TikTok Live and TikTok Shop, the brand generated more than 80 million impressions and over 1 million live views during the quarter. Looking ahead, Princess Polly is continuing to innovate on the platform, launching new campaigns with top creators and preparing for a TikTok Shop takeover that will secure premium placement during Thanksgiving. The brand also broadened its college presence through U.S. campus roadshow, sorority shopping events, and an enhanced college ambassador program supported by a new influencer and PR platform designed to deepen engagement with Gen Z consumers.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

In addition to its strength in the direct-to-consumer channel, Princess Polly continues to expand its total addressable market through new stores and wholesale partnerships. The brand opened its 11th store in the third quarter at the Westchester Mall and recently opened its 12th store at Roosevelt Field Mall on Long Island, New York. We're also excited to open Princess Polly's first store in Australia, located in Bondi Beach, later this quarter. The store fleet continues to outperform expectations across revenue, profitability, and new customer acquisition. Looking ahead, we plan to open 8-10 additional Princess Polly stores in 2026. Princess Polly is also growing its wholesale presence at Nordstrom, supported by brand signage and dedicated in-store space, further enhancing brand awareness. In the U.K., Princess Polly's presence on asos.com also continues to perform strongly, setting the stage for the brand's own U.K. expansion in the coming years.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Turning now to Petal & Pup. The brand continues to resonate with customers through its feminine, trend-driven aesthetic and strong digital presence. Its ability to translate emerging fashion trends into accessible, versatile styles is driving consistent engagement and growth across its direct-to-consumer and wholesale channels. Petal & Pup delivered solid performance in its direct-to-consumer channels, supported by continued demand for event and occasion dressing. The launch of its Fort Modern Romance collection exceeded last year's results, reflecting the brand's ability to capitalize on seasonal trends and connect with its customers through fresh styles and storytelling. Petal & Pup's focus on elevated fabrics, trending colors, and fit continues to differentiate the brand and reinforce its position among customers. The brand also continued to strengthen and expand its wholesale and international presence.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

In partnership with Nordstrom, Petal & Pup executed a fall promotion that drove a more than triple-digit % year-over-year increase in demand, supported by strong sell-through of fall styles. Petal & Pup also recently launched on Nykaa Fashion in India, quickly becoming a top-five brand on the platform. The brand also entered retail platform Nuuly, where it will be featured in the upcoming Holiday Editorial Lookbook. In the fourth quarter, Petal & Pup will launch in 10 David Jones stores in Australia and onboard with Armoire rental platform. Turning to our streetwear brands, Culture Kings and Minimal. The continued improvement in the streetwear business reflects the strategic actions taken over the past two years, including strengthening the leadership team, implementing a test and repeat merchandising model, and enhancing operational execution across both regions.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

I'm pleased that the business delivered solid progress in the third quarter with continued improvement in gross margin and profitability. Culture Kings continues to differentiate itself in the streetwear market through its portfolio of leading in-house brands, including Loiter, Minimal, Carré, and Saint Morta, which remain among our top sellers and continue to grow in net sales and gross profit dollars year over year. In addition to the strength of its in-house brands, Culture Kings continues to benefit from its unique position in the broader streetwear market, underpinned by an exclusive product portfolio and exciting collaborations with leading brands. In the fourth quarter, Culture Kings is launching an outerwear-based collection with leading American heritage brand Alpha Industries, and will also launch a co-branded exclusive collection with Von Dutch to be sold only at Culture Kings.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Building on this product strength, Culture Kings continues to lead through its unique ability to fuse fashion, entertainment, and culture. The brand's marketing strategy is anchored in creating hype through immersive events and high-impact collaborations that drive both engagement and conversion. Recent activations, including the Culture Kings and Timberland events and participation at ComplexCon featuring the exclusive Loiter X Yu-Gi-Oh Collaboration, drove strong customer engagement and meaningful sales results, further reinforcing the brand's position as a leader in streetwear culture. Looking ahead, upcoming launches and experiences such as the Formula One Las Vegas Grand Prix collaboration with McLaren and the One Piece '73 Studio Collection will continue to build momentum and generate strong engagement across channels. I'm confident that our streetwear business is still in the early stages of its global expansion, with significant runway ahead.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

In addition to the strategic initiatives at each brand, I'm excited about the innovation and adoption of AI across the platform. Thanks to our portfolio model and flexible asset-led technology stack, we can test and deploy different AI solutions within each brand to identify the tools that deliver the most meaningful impact. For example, Princess Polly will launch an instant checkout on ChatGPT in the coming weeks, one of the first brands to do so in partnership with Shopify. Across the group, we've also recently implemented a number of tools across image editing, product descriptions, marketing campaign enhancements, and customer experience workflows that will drive efficiency, unlock creativity, and enable smarter, faster decision-making throughout the organization. What's most powerful is how we share insights and best practices across brands, allowing us to scale learnings quickly, maximize synergies, and accelerate our progress as a group.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

We're still in the early stages of using AI, but the results are incredibly promising. In summary, I'm really pleased with the team's hard work executing on all strategic fronts, expanding our retail footprint and wholesale partnerships, strengthening our balance sheet through our refinancing, and advancing our sourcing transformation. I am confident we are well-positioned for the road ahead. With that, I'll turn it over to Kevin to dive deeper into the financials.

[Kevin Grant, CFO at a.k.a. Brands Holding Corp]

Thanks, Ciaran. As mentioned, we continue to be pleased with the demand for our brands and the strength of our business model. For the third quarter, net sales declined 1.9% to $147.1 million and 2.7% on a constant currency basis compared to the same period last year. Net sales in our U.S. business declined 3.6% to $97 million due largely to supply chain disruptions that led to out-of-stocks in our best sellers, which Ciaran mentioned earlier.

[Kevin Grant, CFO at a.k.a. Brands Holding Corp]

We were pleased to see the strong sales growth in Australia continue, with sales increasing 5.1% to $46 million. Total orders for the third quarter were 1.9 million, an increase of 2.2% compared to a year ago. Our trailing 12-month active customer count rose to 4.07 million at the end of the third quarter, a 50 basis point increase compared to a year ago. Our third-quarter average order value was $78, 3.7% lower than the third quarter of last year, primarily driven by out-of-stocks and best sellers. Turning to our profitability metrics, gross margin increased 110 basis points to 59.1%, ahead of our expectations compared to 58% in the same period last year. Our stronger-than-expected gross margin was driven by a higher mix of in-store sales, less promotional activity given our constrained inventory position, an improvement in the Culture Kings business, and a benefit from Duty Drawback.

[Kevin Grant, CFO at a.k.a. Brands Holding Corp]

We anticipate gross margin in the range of 56.6%-57% for the fourth quarter, which contemplates the trend in the business that we're seeing today and our improved inventory position. Selling expenses were $43.2 million compared to $41.9 million in the third quarter of 2024. As a percentage of net sales, selling expenses were 29.4% compared to 27.9% a year ago. The year-over-year increase was primarily due to an increase in store selling expenses related to our retail expansion, as well as deleverage on our fixed costs given the sales volume. Marketing expenses were $18.5 million compared to $19.3 million in the third quarter of 2024. As a percentage of net sales, marketing expenses were 12.6% compared to 12.9% in the third quarter of 2024, which was in line with our expectations. General and administrative expenses were $26.7 million compared to $27.8 million in the third quarter of 2024.

[Kevin Grant, CFO at a.k.a. Brands Holding Corp]

As a percentage of net sales, G&A expenses decreased to 18.1% from 18.6% in the third quarter of last year. I'm pleased that despite the transitory headwinds in the quarter, we generated $7 million in adjusted EBITDA. Turning now to the balance sheet, we ended the quarter with $23.4 million in cash and cash equivalents compared to $23.1 million at the end of the third quarter of 2024. Debt at the end of the quarter was $111.3 million compared to $111.9 million a year ago. We continue to make progress, reducing our leverage with our net leverage ratio declining to 3.8 times from 4.8 times in the third quarter of last year. We also continue to strengthen our financial foundation and recently announced that we refinanced our credit facility, extending the maturity by two years.

[Kevin Grant, CFO at a.k.a. Brands Holding Corp]

The new agreement provides for an $85 million term loan and approximately $35 million in revolving credit capacity and extends the maturity of both the term loan and the revolving credit facility to 2028. I'm really proud that we were able to refinance our debt with favorable terms given the macro environment factors at play. As Ciaran noted, we've been swiftly transforming our supply chain to diversify our sourcing structure and build long-term flexibility. As we scaled the transition in the third quarter, we experienced some temporary inventory constraints, including unexpected disruptions to in-stock levels, particularly among new styles and best-selling styles. We ended the quarter with $96.7 million in inventory, down 8.8% compared to a year ago. We have already seen inventory improve as we move through the fourth quarter, and we feel confident in our inventory as we head into the holiday season.

[Kevin Grant, CFO at a.k.a. Brands Holding Corp]

In the third quarter, we repurchased roughly 159,000 shares of Common Stock from a former employee through a one-time transaction that was not included as part of the share repurchase program. As of the end of Q3, we have $1 million remaining in our share repurchase authorization. Moving on to guidance. With the rapid acceleration of our supply chain transition, we experienced disruptions to in-stock levels in the third quarter and early into the fourth quarter. To avoid continued disruption, we increased production coming out of China ahead of the holiday season, all of which is contemplated in our guidance. Taking into account the third quarter and current trends in the business for the full year, we now expect net sales to be between $598 million-$602 million, representing growth in the 4%-5% range. We now expect adjusted EBITDA to be between $23 million-$23.5 million.

[Kevin Grant, CFO at a.k.a. Brands Holding Corp]

For the full year of 2025, we anticipate gross margin to be between 57.6% and 57.7%. For modeling purposes, we anticipate fiscal 2025 stock-based compensation of approximately $8-9 million, depreciation and amortization expense of roughly $19-20 million, interest and other expense of approximately $20-21 million, an effective tax rate of negative 10%. CapEx between $16-18 million, which includes the addition of Princess Polly's new store in Australia, and weighted average diluted share count of approximately 10.8 million. In closing, I want to thank the amazing team we have here at a.k.a. for their unwavering focus on executing our unique model, which is at the heart of what makes our brand successful. We remain pleased with our year-to-date performance with net sales growth of 5%, gross margin expansion of 100 basis points.

[Kevin Grant, CFO at a.k.a. Brands Holding Corp]

We've delivered more than $17 million in adjusted EBITDA, and we've generated $21 million more in cash flow compared to the same nine-month period last year. We are confident that we are building exceptional brands through our multi-channel approach, which positions us well to deliver consistent long-term growth and profitability. With that, we will open the call for questions.

[Operator]

Thank you. At this time, we will conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one to ask a question at this time.

[Operator]

One moment while we pull for our first question. Our first question comes from Ryan Meyers with Lake Street Capital. Please proceed.

[Ryan Meyers, Senior Research Analyst at Lake Street Capital]

Hey, guys. Thanks for taking my questions. First off, for me, I just want to make sure I understand the sort of updated guidance. The, let's call it, $7 million or so that you guys came in below sort of the expectations in the third quarter compared to the revised full-year guidance. It sounds like there was maybe a couple million or so that led into the fourth quarter, but where the business is at right now, that kind of headwind with the inventory that's now gone, that's where there's kind of that Delta there.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. Hey, thanks for the question, Ryan. Yeah. First of all, we're really pleased with.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

That our inventory has gotten back to a good spot here in Q4, and we're seeing those positive comps come back in the quarter. What the guidance is for Q4 is sort of low single digits overall, and that's 10% on a two-year stack. We are feeling really good going into the holiday. As you mentioned, we did get caught up a bit in the beginning of the quarter with our inventory situation, but we're in a much better spot headed into the holiday and to the end of the year.

[Ryan Meyers, Senior Research Analyst at Lake Street Capital]

Okay. Got it. That makes sense. And then just looking at the lower order value, can you just walk us through that and kind of how the inventory shortage ended up impacting that? Was that just you guys were not able to sell through higher-priced, more in-demand inventory? Just kind of any color on that would be helpful.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. Yeah, for sure. I think on the bright side there, we really still saw great demand for our product. We saw strong traffic. We saw growth in active customers. We saw positive growth in orders as well. The AOV decline really for us is related to the out-of-stocks, the lack of newness, and the lack of the product best sellers. As I mentioned, into Q4, we have certainly seen the inventory improve, and we have seen AOVs correct as well. We saw that as temporary and really just related to the inventory position overall.

[Ryan Meyers, Senior Research Analyst at Lake Street Capital]

Okay. Got it. That makes sense. Thanks for taking my questions.

[Operator]

Thank you. The next question comes from Ashley Owens with KeyBanc Capital Markets. Please proceed.

[Ashley Owens, VP and Equity Research Analyst at KeyBanc Capital Markets]

Hi. Great. Thank you. I wanted to start by asking about the store strategy and how it translates to margins.

[Ashley Owens, VP and Equity Research Analyst at KeyBanc Capital Markets]

You're up to 12 now, almost doubling that into next year. How should we be thinking about some of the gross margin gains in the medium term, just given the lower promo activity in person? If you think some of these improvements you've seen are structural in nature as you continue to scale that brick-and-mortar storefront, thanks.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. Look, I think we're certainly really happy with the continued execution on the strategy. That being put our product in front of our customers wherever they are. I think seeing great performance from Princess Polly in stores. Ahead of sales plan, ahead of profitability, really great from a payback period. As kind of we talked about in the script, certainly see a higher gross margin there, which is helping uplift from a Q3 perspective. I think we're going to continue on that strategy of.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Leaning into stores for Princess Polly and Culture Kings next year. I think Petal & Pup will be more focused on continuing expanding its wholesale presence, but certainly see that we've a lot of opportunity across the brands to continue on kind of increasing sales and profitability.

[Ashley Owens, VP and Equity Research Analyst at KeyBanc Capital Markets]

Okay. Great. And then just quickly as well, we'd be curious as to how marketing ROI trended through the quarter. Were you able to maintain efficiency even with limited newness, or did you pull back at all to avoid inefficient spend? As we look forward to you, is this something you expect to ramp again now that inventory levels are more normalized? Thank you.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. I think. As Kevin mentioned, we certainly saw the demand was there during the quarter and the customer was there.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

I think in particular areas where we had better inventory depth, whether that's kind of stores, wholesale, or Australia, really strong sales performance. I think as we saw, or as we got really, I would say, a bit surprised by the out-of-stocks in late August into September, we did pull back on some marketing spend from a dollar perspective. Just, we knew that the efficiency wouldn't be there with the level of out-of-stocks that we had. As we've gone through the October period, gotten back into stock, back to overall positive comps as we talked about, we are starting to ramp our marketing spend again and feel good on our ability with our in-stock levels back to where we want them to be, feel good that we can execute against a strong holiday opportunity.

[Ashley Owens, VP and Equity Research Analyst at KeyBanc Capital Markets]

Okay. Great. That's super helpful. Thanks and good luck.

[Operator]

Thank you. The next question comes from Eric Beder with SCC Research. Please proceed.

[Eric Beder, CEO and Senior Research Analyst at SCC Research]

Good afternoon. Let's talk a little bit about the inventory levels. What should we be thinking as this kind of normalizes into Q4 about how inventory should be moving going forward?

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. Thanks, Eric. Yeah. As we mentioned, inventory finished the quarter, finished Q3 down 9%. And we really saw the inventory levels improve into October and through Q4. We feel really well set up for the holiday, and things are back to where they should be. By the end of the year, we see inventory about flat year over year, and that's relative to sort of mid-single-digit growth, and that's managing it sort of right where we want it, slightly below our sales growth.

[Eric Beder, CEO and Senior Research Analyst at SCC Research]

Okay. And how should we be thinking about the Australian?

[Eric Beder, CEO and Senior Research Analyst at SCC Research]

I guess now it's become an opportunity in that you're opening a Princess Polly store there, margins even before then. I don't know about the margins. The revenue even before then has started to go. This kind of work last year, cleaning up in terms of inventory and getting the margins better there. How should we be thinking about that as a potential upside driver going forward? Thank you.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. Look, it's great to see three quarters in a row of positive comps in Australia. I think, look, we've seen that across all of the brands. I think particularly as we've talked about the last couple of quarters, great progress from the Culture Kings team and the leadership there as they've moved the Culture Kings first-party brands onto a test-and-repeat model and certainly seeing outsized growth from that.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

I think, as you said, really excited to open our first Princess Polly store in Australia in Bondi. I think looking for, I would say, that overall Australian market to continue to be a growth driver. I think in that kind of mid-single digits is where we would expect it to be going forward. Certainly looking forward to the consistency of that and the kind of increased brand awareness and profit that that will generate from us.

[Eric Beder, CEO and Senior Research Analyst at SCC Research]

Okay. Last question for me. Where do you expect, now, when the supply chain is finished in terms of the upgrades and the pieces here, what should be the level of China exposure and how much more diversified will you be than you have been before? Thank you.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. Look.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

I'm really happy with the progress the teams have made over the last 12 months as we've looked to diversify the supply chain. We started this time last year looking for ways that we could diversify out of China. I think the teams have made phenomenal progress. We're now at a place where we have four key historic vendors that we've used for the last number of years have diversified outside of China and are in multiple regions. We've also brought on new partners that are also in multiple regions. I think, look, where we are today, we feel really good that for kind of going forward and certainly from a long-term perspective, we have the ability to move volume across regions as we see different changes in the macro environment or the tariff environment. That all of the groups that we're now working with can meet our, quality, pricing, and delivery timelines that we need. So feel really, really good about the progress we've made over the last 12 months.

[Eric Beder, CEO and Senior Research Analyst at SCC Research]

Okay. Great. Good luck for the holiday season.

[Operator]

Once again, to ask a question, that's star one at this time. Our next question comes from Dana Telsey with Telsey Advisory. Please proceed.

[Emily Schwartz, Head of Investor Relations at a.k.a. Brands Holding Corp]

Dana, your line is live.

[Dana Telsey, CEO and CRO at Telsey Advisory]

Hi. Good afternoon, everyone. As you think about some of the metrics, Ciaran, basically AOV, I think it was down just under 4%. Given what's changing now with the sourcing structure, how do you see some of those metrics evolving, whether it's orders, active customers? What are you seeing, and how do you see it differing by region? Thank you.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. Look, I think it's great to see continued positive growth in active customers. And we've been consistently doing that now for quite a while, continued growth in orders.

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

I think. AOV did come down a little bit in Q3, and we can very much see that that's impacted by just those short-term period that we were out of stocks with all the supply chain changes that we were making. But we also see that it's back to kind of positive growth in AOV now in Q4. I think that's stable. We expect it to be going forward. I think, look, as we sit here, we do see that there's just tremendous opportunity to continue on that strategy. I feel like as we continue to roll out stores and roll out wholesale opportunities, we'll continue to see growth in all the metrics, which I think will just really kind of drive the overall growth of the business. Looking forward to executing on Q4 and 2026.

[Dana Telsey, CEO and CRO at Telsey Advisory]

Got it.

[Dana Telsey, CEO and CRO at Telsey Advisory]

Just when you commented that the fourth quarter-to-date sales, I think you mentioned up low single digits, how does it differ by region?

[Ciaran Long, CEO at a.k.a. Brands Holding Corp]

Yeah. I think as we've gone through that period, we've seen pretty consistent growth in Australia. They are not impacted by any of the changes we've made from the sourcing perspective. The growth there has been really consistent over the last three quarters and into Q4. I would say as we've gotten back into stock, as we went through October in the U.S. region, we did see comps improving. That has come just really from that better in stock. The customer has been there all the time. We've seen the traffic. We've seen the demand. Feeling good now with the inventory levels we have, the quality of the inventory, and looking forward to executing against a really strong holiday.

[Dana Telsey, CEO and CRO at Telsey Advisory]

Thank you.

[Operator]

Thank you.

[Operator]

We have reached the end of the question-and-answer session. At this time, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.

Participants

Executives

• Emily Schwartz, Head of Investor Relations
• Kevin Grant, CFO
• Ciaran Long, CEO

Analysts

• Eric Beder, CEO and Senior Research Analyst at SCC Research
• Ashley Owens, VP and Equity Research Analyst at KeyBanc Capital Markets
• Ryan Meyers, Senior Research Analyst at Lake Street Capital
• Dana Telsey, CEO and CRO at Telsey Advisory