KOSS Q1 Loss Widens Y/Y Amid U.S. Sales Decline and Cost Pressures

Core Insights - Koss Corporation reported a loss per share of 5 cents for Q1 fiscal 2025, widening from a 3 cents loss in the same quarter last year [1] - Net sales decreased by 5.1% year-over-year to $3.2 million, down from $3.4 million in Q1 fiscal 2024 [1][3] Sales Performance - The decline in sales was primarily attributed to lower demand from U.S. distributors and reduced orders from the Education and Music segments [2][3] - Despite the overall decline, Koss experienced notable growth in European markets and direct-to-consumer (DTC) channels, indicating strategic resilience [2][4] International and DTC Growth - International sales saw a significant increase, particularly from Koss' two largest European distributors, which grew by over 30% [4] - Direct-to-consumer sales, especially on Amazon, achieved record-setting sales days, driven by the successful launch of the Porta Pro Wireless 2.0 [4] Cost and Profitability - The cost of goods sold decreased to $2 million from $2.3 million in the previous year, contributing to an improved gross margin [5] - Gross profit increased to $1.2 million, up from $1.1 million, with gross margin climbing from 31.6% to 36.6% due to a favorable product mix [6] Expenses and Losses - Selling, general and administrative (SG&A) expenses rose by 17.8% to $1.8 million, reflecting increased spending on product launches and DTC enhancements [7] - The net loss for the quarter was $0.4 million, wider than the $0.3 million loss in Q1 fiscal 2024, driven by mixed sales performance and higher SG&A costs [9]