a.k.a. Brands Holding Corp.

Net sales were $160.1 million in Q2 2026, versus $160.5 million a year ago; constant-currency net sales declined 5.3%. Adjusted EBITDA increased 16% year over year to $8.7 million, and adjusted EBITDA margin improved 80 basis points to 5.5%. Gross margin was 61.1%, up 360 basis points, with about 240 basis points from lower tariffs and 120 basis points from streetwear strength, partially offset by higher air freight costs. By region, U.S. sales rose 2.1% to $110.7 million, Rest of World rose 50.5% to $9.6 million, and Australia/New Zealand declined 13% to $39.8 million. For Q3, management expects net sales of $160 million to $164 million, gross margin of approximately 59%, and adjusted EBITDA of $8 million to $8.5 million. Full-year fiscal 2026 guidance was reiterated at net sales of $625 million to $635 million and adjusted EBITDA of $30 million to $32 million.

Ciaran Long framed the quarter as evidence that the company’s repositioned operating model is working, emphasizing profitability, durability, and channel expansion. He highlighted omnichannel growth across stores, wholesale, and marketplace; stronger inventory discipline; and early AI gains in imagery, marketing efficiency, and inventory. His tone was confident and upbeat, repeatedly pointing to stronger momentum in Q3 and the long-term store opportunity for Princess Polly and Culture Kings.

Kevin Grant said Q2 net sales and adjusted EBITDA were in line with expectations, with adjusted EBITDA up 16% to $8.7 million, the highest quarterly level since Q2 2022. He detailed gross margin of 61.1% and noted the year-over-year improvement came mainly from lower tariffs, plus stronger full-price selling in streetwear, while Q3 gross margin should be about 59% given current tariff rates and elevated air freight. On the balance sheet, he said cash and cash equivalents were $21.1 million, debt fell 8.1% to $99.9 million, inventory was $79.9 million, and the company received substantially all of the $25.8 million of expected IEPA tariff refunds. He also reiterated full-year expectations for stock-based compensation of $6.5 million to $7 million, D&A of $20 million to $21 million, interest and other expense of $16 million to $18 million, an effective tax rate of negative 10%, CapEx of $18 million to $20 million, and weighted average diluted shares of about 11 million.

Analysts pressed on why revenue guidance was unchanged despite strong Q3 trends, and management said the current pace reflects better inventory, more wholesale and marketplace distribution, and more stores, plus a strong recovery in Rest of World and U.S. momentum. Questions also focused on Princess Polly’s 100-store potential and store economics; management said stores are introducing new customers, creating an online halo, and are modeled to pay back in two years or less, with performance currently better than that. On Culture Kings, management said new U.S. stores will be smaller than Las Vegas and will lean on learnings from Vegas and Australia, while also showcasing first-party brands. On capital allocation, Kevin Grant said reducing debt remains a priority, but the company has a track record of funding growth and debt reduction together, citing about $35 million of operating cash over the last 18 months, with roughly $25 million to CapEx and $10 million to debt paydown.