a.k.a.

Core Viewpoint - The company reported strong financial performance with net sales growth driven primarily by the US market, although challenges remain in certain regions like Australia and New Zealand [2][3]. Positive Points - Net sales exceeded expectations with a year-over-year growth of more than 9%, driven by strong performance in the US market [2]. - The US business saw significant acceleration with net sales growth of over 19%, contributing to 64% of total net sales [2]. - Gross margin improved to 57.7%, up 80 basis points from the previous year, aided by reduced airfreight costs and strong full-price selling [2]. - Adjusted EBITDA increased by 44% year-over-year, reaching $8 million, surpassing the high end of guidance [2]. - Active customer growth was strong, with a 12% increase over the prior year, adding 420,000 new customers in the last 12 months [2]. Negative Points - Sales in the Australia and New Zealand region contracted by 5% year-over-year, indicating challenges in these markets [3]. - Average order value decreased by 4.9% compared to the previous year, partly due to softer sales in Australia and New Zealand [3]. - Selling expenses increased to 27.7% of net sales, up from 26.4% a year ago, due to growing marketplace initiatives and additional stores [3]. - The company anticipates a slowdown in growth for Q3, with projected net sales growth of only 1% to 2% at the midpoint [3]. - The company faces potential risks related to tariffs on goods from China, where the majority of their third-party suppliers are based [3]. Q & A Highlights - The company will remain predominantly direct-to-consumer but sees significant opportunities in omnichannel strategies, leveraging learnings from past tests [4]. - A shift towards fashion-based businesses is noted, with proprietary and exclusive products being a key advantage, particularly in dresses and new categories like loungewear [4]. - Culture Kings is making progress with its first-party brands, which account for 50% of revenue, focusing on margin expansion in the second half of the year [5]. - New stores for Princess Polly will be larger with changes in visual merchandising and more SKUs, aiming to replicate the compelling online experience in-store [5]. - The company is testing actions to diversify its supply chain in response to potential tariff increases on goods from China [5].