A.K.A Brands - the parent company to Australian fashion brands Culture Kings, Petal & Pup and Princess Polly - has reported an 11.5 per cent fall in revenue across its Australian market for the first six months of 2024.
This is a drop of just over US$10 million (~A$15.3 million), with second quarter sales falling 5 per cent or US$2.3 million.
The fall in Australia defies A.K.A Brands’ US market, which has boomed by more than 19 per cent in the second quarter to US$95.3 million, driven by a double-digit surge in net sales at Culture Kings for the market. The Culture Kings boom was powered by the launch of new licenses and graphics including Pokemon, WWE, NHL and Halo, with more collaborations to come in the latter half of the year.
Overall, A.K.A Brands’ net sales lifted by 9.5 per cent, which was driven by a 16 per cent increase in the number of orders, due to growth in the US. The group added this boost was partially offset by a decline in the average order value compared to the prior quarter, driven by adverse macroeconomic conditions in Australia and New Zealand and actions taken to improve its inventory position at Culture Kings.
“Our second quarter results exceeded our expectations, showcasing the strength of our brands and the power of our business model,” interim CEO and CFO Ciaran Long said. “We delivered net sales growth of over 9 per cent, driven by the momentum in our US region where net sales grew more than 19 per cent year-over-year.
“Importantly, our strong top-line growth translated into adjusted EBITDA of $8 million, an increase of 44 per cent compared to the same quarter last year.
Long also reported that its active customer base increased by nearly 12 per cent on a trailing twelve-month basis.
“Our strong second quarter results are a clear indication that demand for our brands is strong and that we have tremendous growth opportunities ahead of us.”
Alongside the sales boom, fashion label Princess Polly is undergoing a retail rollout across the US with five store openings planned across 2024. This includes three stores that have already been announced, alongside two new leases signed in Irvine and Santa Clara, California, which will bring its overall physical presence to six locations.
“Petal & Pup’s expanded omni-channel presence, now on Nordstrom.com, Target.com and Macys.com, far exceeded our expectations, setting the stage for continued growth and brand expansion,” Long said. “Leveraging Petal & Pup’s omni-channel success, our streetwear brand mnml launched a test on Nordstrom.com, and our Culture Kings US business delivered another quarter of strong double-digit net sales growth on top of strong results last year.
“Executing at a high level while delivering innovative strategies to meet our customers where and when they want to shop our portfolio of brands strengthens my confidence in the many profitable future growth opportunities we see for A.K.A. Brands, particularly the tremendous whitespace we see in the U.S. to expand our brand portfolio reach and total addressable market.”