Q2 2024 AKA Brands Holding Corp Earnings Call

August 7, 2024

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Unknown Attendee: Greetings and welcome to the A.K.A. Brand's Holding Corp. 2nd Quarter, 2024 Earnings Conference Call.

Operator: Greetings and welcome to the AKA Brands Holding Corp.'s second quarter 2024 earnings conference call. At this time, all participants are in 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 introduce your host, Casey White. Thank you. You may begin. Good afternoon,

Operator: Thanks, and welcome to the AKA Brands Holding Corp.'s second quarter 2024 earnings conference call. At this time, all participants are in 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 introduce your host, Casey White. Thank you. You may begin. Good afternoon,

Unknown Attendee: At this time, our participants are nearly only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operators' assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference may be recorded.

Unknown Attendee: It is not my pleasure to introduce your host, Kasey White.

Unknown Attendee: Thank you. You may begin.

Kasey White: Good afternoon. Thank you for joining A.K.A. Brand's 2nd quarter, fiscal 2024 conference call to discuss the results released this afternoon, which can be found on our website at ir.aka-brand.com.

Casey White: Good afternoon. Thank you for joining AKA Brand's second quarter fiscal 2024 conference call to discuss the results released this afternoon, which can be found on our website at ir.aka-brands.com. With me on the call is Ciaran Long, Interim Chief Executive Officer and Chief Financial Officer. Before we get started, I'd like to remind you of the company's safe harbor. Management may make forward-looking statements, which refer to expectations, projections, and other characterizations of future events, including guidance and underlying assumptions.

Kasey White: With me on the call, Ciaran Long, Interim Chief Executive Officer and 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 refers 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 a 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.

Casey White: Forelooking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed. For a further discussion of risks related to our business, please see our filings with the FEC. Please note that we assume no obligation to update any such forward-looking statements. This call will contain non-GAAP financial measures such as Adjusted EBITDA and Adjusted EBITDA margin. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in the release furnished to the SEC and are available on our website. With that, I'll turn the call over to Ciaran.

Casey White: Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed. For a further discussion of risks related to our business, please see our filings with the FEC. Please note that we assume no obligation to update any such forward-looking statements. This call will contain non-GAAP financial measures such as adjusted EBITDA and adjusted EBITDA margin. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in the release furnished to the SEC and are available on our website. With that, I'll turn the call over to Ciaran.

Kasey White: This call will contain non-gap financial measures, such as adjusted evidot and adjusted evidot march. Reconciliation 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.

Kasey White: With that, I'll turn the call over to Ciaran.

Ciaran Long: Thanks, Casey. Good afternoon, everyone, and thanks for joining us on our second quarter earnings call. Before I review a few key highlights from the quarter, I would like again to take a moment to thank our team for their continued commitment to building on our portfolio of next-generation brands for the next generation of consumers. This was another quarter in which the team's agility and flexibility in executing our strategic priorities while keeping our customers at the center of every decision we make enabled us to deliver strong quarterly top line and operating results that exceeded our expectations.

Ciaran Long: Thanks, Kasey.

Ciaran Long: Good afternoon, everyone, and thanks for joining our second-quarter earnings call. Before I review a few key highlights in the quarter, I would like to again take a moment to thank our team for the continued commitment to building on our portfolio of next-generation brands for the next generation of consumers. This was another quarter in which the team's legitimacy and flexibility in executing our strategic priorities while keeping our customers at the center of every decision we make enabled us to deliver strong quarter top-line and operating results that exceeded our expectations. I continue to be very confident in our team's ability to execute, and in the many profitable future growth opportunities we see for aka Brands to expand our brand portfolio reach and total address with markets.

Ciaran Long: I continue to be very confident in our team's ability to execute and in the many profitable future growth opportunities we see for AKA brands to expand our brand portfolio reach and total addressable market. Before I go through the results in more detail, let me share a few highlights from the second quarter.

Ciaran Long: Before I go through the results in more detail, let me share a few highlights from the second quarter. Net sales for our exceeded the high end of our guidance as we achieved year-over-year growth of more than 9%. Momentum in our U.S. business meaningfully accelerated with year-over-year net sales growth of more than 19%. We delivered a strong growth margin of 57.7% of 80 basis points from the prior year, which combined with marketing expense leverage of 120 basis points, contributed to adjusted EBITDA of 8 million, a year-over-year increase of 44%, exceeding the high end of our guidance.

Ciaran Long: Net sales far exceeded the high end of our guidance as we achieved year-over-year growth of more than 9%. Furthermore, momentum in our U.S. business meaningfully accelerated with year-over-year net sales growth of more than 19%. We delivered a strong gross margin of 57.7%, up 80 basis points from the prior year, which combined with marketing expense leverage of 120 basis points, contributed to adjusted EBITDA of 8 million, a year-over-year increase of 44%, exceeding the high end of our guidance.

Ciaran Long: Net sales far exceeded the high end of our guidance as we achieved year-over-year growth of more than 9%, and momentum in our US business meaningfully accelerated with year-over-year net sales growth of more than 19. We delivered a strong gross margin of 57.7%, 80 basis points from the prior year, which combined with marketing expense leverage of 120 basis points contributed to adjusted EBITDA of $8 million, a year-over-year increase of 44% Despite a late build in the quarter build of inventory as we chased into demand, we generated $3.5 million of operating cash. We registered another strong quarter of active customer growth, up 11.7% on a trading 12-month basis. We ended the quarter with net debt down 13% from the prior year and down 20% in a two-year stack.

Ciaran Long: Despite a late-in-the-quarter build of inventory as we chase into demand, we generated 3.5 million of operating. Cashlow. We registered another strong quarter of active customer growth, up 11.7% on a training 12-month basis. We ended the quarter with net debt down 13% from the prior year, and out 20% in the two-year stack. In addition to planned new Princess Polly's store openings in Scottsdale, Fashion Square, and on Newbury Street in Boston, and in the recent, for additional locations in Irvine and Santa Clara, California, which we expect will bring the Princess Polly physical presence to six locations by year end.

Ciaran Long: Despite a late-quarter build of inventory as we chased into demand, we generated $3.5 million of operating cash. We registered another strong quarter of active customer growth, up 11.7% on a trading 12-month basis. We ended the quarter with net debt down 13% from the prior year and down 20% in the two-year stack.

Ciaran Long: In addition to planned new Princess Polly store openings in Scottsdale Fashion Square and on Newbury Street in Boston, and in the Fashion Valley Mall in San Diego, we signed two new leases for additional locations in Irvine and Santa Clara, California, which we expect will bring the Princess Polly physical presence to six locations by year end, with more expected to come in 2025 and beyond. Petal and Pop's expanded omnichannel presence has exceeded expectations, setting the stage for continued growth and brand expansion. Leveraging the successful experience of Petro & Pub, our streetwear brand Minimal launched a small test on Nordstrom.com.

Ciaran Long: In addition to planned new Princess Polly store openings in Scottsdale Fashion Square and on Newbury Street in Boston, and in the Fashion Valley Mall in San Diego, we signed two new leases for additional locations in Irvine and Santa Clara, California, which we expect will bring the Princess Polly physical presence to six locations by year end, with more expected to come in 2025 and beyond. Petal and Pop's expanded omnichannel presence has exceeded expectations, setting the stage for continued growth and brand expansion, leveraging the successful experience of Petro and Pub or Strootware brand Minimal launched a small test on Nordstrom.com.

Ciaran Long: And what more is expected to come in 2025 and beyond. Catalan Pop's expanded omnichannel presence has exceeded expectations, sending the stage for continued growth and brand expansion. Leveraging the successful experience of Catalan Pop, our streetwear brand Minimal, launch a small test on Nordstrom.com. And lastly, Projecting's U.S. delivered another strong quarter of double-digit net sales growth on top of strong results last year. Turning note to more details on the second quarter, we generated 149 million of net sales, a 10% constant currency increase over last year, far exceeding our expectations. The momentum in the U.S. business accelerated with net sales growing 19.3% of the prior year period, reaching 95 million and accounting for 64% of net sales for the quarter from 54% last year.

Ciaran Long: And lastly, Project Kings U.S. delivered another strong quarter of double-digit net sales growth on top of strong results last year. Turning now to more details on the second quarter, we generated $149 million in net sales, a 10% constant currency increase over last year, far exceeding our expectations. The momentum in the U.S. business accelerated, with net sales growing 19.3% over the prior year period, reaching $95 million, and accounting for 64% of net sales for the quarter, up from 54% last year.

Ciaran Long: And lastly, Project Kings US delivered another strong quarter of double-digit net sales growth on top of strong results last year. Turning now to more details on the second quarter, we generated $149 million in net sales, a 10% constant currency increase over last year, far exceeding our expectations. The momentum in the U.S. business accelerated, with net sales growing 19.3% over the prior year period, reaching $95 million, and accounting for 64% of net sales for the quarter, up from 54% last year.

Ciaran Long: We remained very pleased by the accelerated strength we were seeing in the U.S. region, which remains our fastest growing and most profitable growth region. Our success remains broad-based, with strong product acceptance across our brands, coupled with growing brand awareness and attracting many new customers. Our Australian New Zealand region results sequentially improved, ending period with a net sales year-over-year contraction of only 5%. With a combination of reduced inventories in the region and our shift to a test and repeat merchandising strategy, we expect to experience second half year-over-year growth margin expansion. And as I mentioned, our operating performance well exceeded the high end of our expectations as we registered adjusted EBITDA of 8 million, a year-over-year increase of 44%.

Ciaran Long: We remain very pleased by the accelerated strength we are seeing in the U.S. region, which remains our fastest growing and most profitable growth region. Our success remains broad-based, with strong product acceptance across our brands, coupled with growing brand awareness and attracting many new customers. The Australian and New Zealand region results sequentially improved, ending the period with a net sales year-over-year contraction of only 5%. With a combination of reduced inventories in the region and our shift to a test and repeat merchandising strategy, we expect to experience second-half year-over-year gross margin expansion. And, as I mentioned, our operating performance well exceeded the high end of our expectations as we registered adjusted EBITDA of $8 million, a year-over-year increase of 44%.

Ciaran Long: We remain very pleased by the accelerated strength we are seeing in the U.S. region, which remains our fastest growing and most profitable growth region. Our success remains broad-based, with strong product acceptance across our brands, coupled with growing brand awareness and attracting many new customers. The Australian and New Zealand region results sequentially improved ending period with a net sales year over year contraction of only 5%. With a combination of reduced inventories in the region and our shift to a test-and-repeat merchandising strategy, we expect to experience second-half year-over-year gross margin expansion. And, as I mentioned, our operating performance well exceeded the high end of our expectations as we registered adjusted EBITDA of $8 million, a year-over-year increase of 44%.

Ciaran Long: Looking at our first half performance, our momentum is accelerating and our results are being fueled by the transformation work we started in 2023. We registered first half year-over-year net sales growth of 3.6% with strong fuel-through, resulting in EBITDA growth of 15%. Although there is much work ahead of us, with our strong first half results, I'm even more confident in the opportunity we see in the U.S. to expand our brand portfolio and total address of the market. We are committed towards strategic priorities as we continue to build on our portfolio of next-generation brands for the next generation of consumers.

Ciaran Long: Looking at our first half performance, our momentum is accelerating, and our results are being fueled by the transformational work we started in 2023. We registered first half year-over-year net sales growth of 3.6%, with strong flow-through, resulting in EBITDA growth of 15%. Although there is much work ahead of us, with our strong first-half results, I'm even more confident in the opportunity we see in the U.S. to expand our brand portfolio and completely address the market.

Ciaran Long: Looking at our first half performance, our momentum is accelerating, and our results are being fueled by the transformation work we started in 2023. We registered first half year-over-year net sales growth of 3.6%, with strong flow-through, resulting in EBITDA growth of 15%. Although there is much work ahead of us, with our strong first half results, I'm even more confident in the opportunity we see in the U.S. to expand our brand portfolio and completely address the market.

Ciaran Long: We are committed to our strategic priorities as we continue to build on our portfolio of next-generation brands for the next generation of consumers. Just as in our first quarter call, I would take a moment to reiterate our strategic operating framework for 2024, including our three key strategic priorities. Priority number one is to retain existing and attract new customers.

Ciaran Long: We are committed to our strategic priorities as we continue to build on our portfolio of next-generation brands for the next generation of consumers. Just as on our first quarter call, I would take a moment to reiterate our strategic operating framework for 2024, including our three key strategic priorities.

Ciaran Long: Just as in our first quarter call, I would take a moment to reiterate our strategic operating framework for 2024, including our three key strategic priorities. Priority number one, retaining this being an attract new cost. We added 420,000 new customers, which included the addition of 180,000 new customers during the second quarter, resulting in our active customers for the quarter increasing by nearly 12% over the prior year. We're strongly resonating, enabling a greater level of full price selling, which is fueling expanding those margin results. We're very pleased that the quality and composition of our imagery and marketing efforts are yielding strong return and investment, positioning us well for continued active customer growth across our brand portfolio.

Ciaran Long: Priority number one, retain existing and attract new customers. Over the last 12 months, we added 420,000 new customers, which included the addition of 180,000 new customers during the second quarter, resulting in our active customers for the quarter increasing by nearly 12% over the prior year. As our teams remain disciplined and adhering to our test and repeat merchandising approach and stay close to our customers, our level of product newness has never been higher.

Ciaran Long: Over the last 12 months, we added 420,000 new customers, which included the addition of 180,000 new customers during the second quarter, resulting in our active customers for the quarter increasing by nearly 12% over the prior year. As our teams remain disciplined and adhering to our test and repeat merchandising approach and stay close to our customers, our level of product newness has never been higher. Our assortments are strongly responding, enabling a greater level of full-price selling, which is fueling expanded gross margin results.

Ciaran Long: Our assortments are strongly responding, enabling a greater level of full-price selling, which is fueling expanded gross margin results. We're very pleased with the quality and composition of our inventory, and marketing efforts are yielding strong return on investment, positioning us well for continued active customer growth across our brand portfolio. Priority number two, remain committed to showing up for our customers wherever they choose to shop.

Ciaran Long: We're very pleased with the quality and composition of our inventory, and marketing efforts are yielding strong return on investment, positioning us well for continued active customer growth across our brand portfolio. Priority number two, we remain committed to showing up for our customers wherever they choose to shop.

Ciaran Long: Prior to number two, we're making a commitment to showing up for our customers wherever they choose to shop at us. In addition to enhancing our online channels, we continue to test and expand our online channel strategies, including experiential stores, wholesale, and marketplaces. I will touch on each of our online channels strategies by brand momentarily, but I'm pleased to report that we are seeing success across all channels of distribution and know the clear signals that our brands are meaningfully under-penetrating in the US market. As our awareness increases, we continue to expand our total address for markets.

Ciaran Long: In addition to enhancing our online channels, we continue to test and expand our omni-channel strategies, including experiential stores, wholesale, and marketplace. I will touch on each of our omni-channel strategies by brand momentarily, but I am pleased to report that we are seeing success across all channels of distribution and know the clear signals that our brands are meaningfully underpenetrated in the U.S. market. As our awareness increases, we continue to expand our total addressable market per month. Priority number three, continue to streamline our operations to deliver financial benefits.

Ciaran Long: In addition to enhancing our online channels, we continue to test and expand our omnichannel strategies, including experiential stores, wholesale, and marketplace. I'll touch on each of our omnichannel strategies by brand momentarily, but I'm pleased to report that we are seeing success across all channels of distribution and know the clear signals that our brands are meaningfully underpenetrated in the U.S. market. As our awareness increases, we continue to expand our total address for more. Priority number three, is to continue to streamline our operations to deliver financial benefits.

Ciaran Long: Prior to number three, continue to streamline our operations to deliver financial benefits. The strong second quarter flow through, in which our net sales growth of 9.5% contributed to adjusted EBITDA growth of 44%, as compared to the same period in the prior year, showcases our ability to drive outsize profitability. This is the direct result of the transformational work we started in 2023, as well as the instilled culture to all those looks for ways to improve overall efficiencies, share best practices, and leverage the AKA platform to drive additional improvements in our results.

Ciaran Long: The strong second quarter flow-through, in which our net sales growth of 9.5% contributed to adjusted EBITDA growth of 44%, as compared to the same period in the prior year, showcases our ability to drive outsized profitability. This is a direct result of the transformational work we started in 2023, as well as the ingrained culture to always look for ways to improve overall efficiency, share best practices, and leverage the AKA platform to drive additional improvements in our response.

Ciaran Long: Now let me share some highlights from our brands. Our largest brand, Princess Polly, which focuses on trend-based fashion, targeting Gen Z and millennial women, puts in another strong quarter of growth. Princess Polly's strong second quarter performance was broad-based, with particular strength in dresses. We're also very pleased with the brand's category expansion efforts, including our newest product launches in sleepwear, loungewear, and activewear. And just in time for back to college, Princess Polly is now offering an assortment of everyday essentials, such as flea hoodies, quarters of sweatshirts, shorts, and more. I am also pleased to report that approximately 35% of the brand's new styles were made with lower environmental impact materials, which is up from 30% to year ago.

Ciaran Long: Now, let me share some highlights from our brand. Our largest brand, Princess Polly, which focuses on trend-based fashion targeting Gen Z and millennial women, is experiencing another strong corridor of growth. Princess Polly's strong second quarter performance was broad-based, with particular strength and dress. We're also very pleased with the brand's category expansion efforts, including our newest product launches in sleepwear, loungewear, and activewear. And just in time for back to college, Princess Polly is now offering an assortment of everyday essentials, such as fleece hoodies, quarters of sweatshirts, shorts, and more.

Ciaran Long: Now, let me share some highlights from our brand. Our largest brand, Princess Polly, which focuses on trend-based fashion targeting Gen Z and millennial women, is fostering another strong corridor of growth. Princess Polly's strong second quarter performance was broad-based, with particular strength and dress. We are also very pleased with the brand's category expansion efforts, including our newest product launches in sleepwear, loungewear, and activewear. And just in time for back to college, Princess Polly is now offering an assortment of everyday essentials, such as fleece hoodies, quarters of sweatshirts, shorts, and more.

Ciaran Long: I am also pleased to report that approximately 35% of the brand's new styles were made with lower environmental impact materials, which is up from 30% a year ago. Stay close to our customers, focusing on product innovation, and leveraging our test and repeat model to provide fresh, new, and affordable merchandise daily remain key brand tenets of Princess Polly's DNA, which continues to fuel a high level of product newness and a higher hit rate in winter.

Ciaran Long: Staying close to our customers, focusing on product innovation, and leveraging our Tesla repeat model to bring a fresh, new, and affordable merchandise daily, remain key brand tenants of the Princess Polly's DNA, which continues to fuel a high level of product units and a higher hit rate on winners.

Ciaran Long: Shifting the physical store. We believe stores serve as a powerful customer acquisition tool and provide customers unique and immersive brand experience, creating a halo effect beyond each store, expanding or surrounding digital reach. Princess Polly's first store opening in Century City, LA, back in September 2023 continues to perform strongly. We're excited for the five new Princess Polly store openings expected to occur in the second half of 2024, with two schedules in the third quarter and three in the fourth quarter, all in time for the holiday season. The team remains focused on developing and executing unique in-store immersive brand experiences, engaging influencers, college ambassadors, and customers, all designed to expand Princess Polly's brand awareness and attract new to follow customers to the brand.

Ciaran Long: Shifting to physical stores. We believe stores serve as a powerful customer acquisition tool and provide customers with a unique and immersive brand experience, creating a halo effect beyond each store, expanding or surrounding digitally. Princess Polly's first store opening in Century City, LA back in September 2023 continues to perform strong. We're excited for the five new Princess Polly store openings expected to occur in the second half of 2024, with two scheduled in the third quarter and three in the fourth quarter, all in time for the holiday season.

Ciaran Long: Shifting to physical stores. We believe stores serve as a powerful customer acquisition tool and provide customers with a unique and immersive brand experience, creating a halo effect beyond each store, expanding or surrounding digitally. Princess Polly's first store opening in Century City, LA back in September 2023 continues to perform strong. We're excited for the five new Princess Polly store openings expected to occur in the second half of 2024, with two openings in the third quarter and three in the fourth quarter, all in time for the holiday season.

Ciaran Long: The team remains focused on developing and executing unique in-store, immersive brand experiences, engaging influencers, college ambassadors, and customers, all designed to expand Princess Poly's brand awareness and attract new DeFile customers to the platform. Petal and Buffers are other women's fashion brands focused on elevated trends and event-based fashion for all of the little and big moments in her life, with more than 70% of the customers between the ages of 25 and 34 Penland Park's second quarter performance was outstanding, with particular acceleration and strength across the brand's omni-channel network. Pedal and Pulse is now being offered on Nordstrom.com, Macy's.com, and Target.com.

Ciaran Long: Petlon Pop is our other women's fashion brand focused on elevated trends and event-based fashion for all of the little and big moments in her life, with more than 70% of the customers between the age of 25 and 34. Petlon Pop's second quarter performance was outstanding, with particular acceleration and strength across the brand's omnichannel efforts. Petlon Pop is now being offered on Nordstrom.com, makesys.com, and target.com, and the brand's significant update is new to follow customers in the second quarter, in part fueled by the fact that a high percentage of their omnichannel customers are first-time brand shoppers, which bodes well for continued brand growth.

Ciaran Long: Pendleton Park's second quarter performance was outstanding, with particular acceleration and strength across the brand's omni-channel network. Pedal and Pulse is now being offered on Nordstrom.com, Macy's.com, and Target.com. And the brand saw a significant uptake in new-to-fall customers in the second quarter, in part fueled by the fact that a high percentage of their omni-channel customers are first-time brand shoppers, which bodes well for continued brand growth. We remain very pleased with Petal's launch of the Modern Romance, a Wedding Guest Collection, and the May launch of the Euro Diaries Collection, with many styles selling out in the first few weeks.

Ciaran Long: And the brand saw a significant uptake in new-to-fall customers in the second quarter, in part fueled by the fact that a high percentage of their omni-channel customers are first-time brand shoppers, which bodes well for continued brand growth. We remain very pleased with Petal's launch of the Modern Romance, a Wedding Guest Collection, and the May launch of the Euro Diaries Collection, with many styles selling out in the first few weeks. Although dresses represent the dominant portion of the category mix, the growing appeal of Peppermint Pop as a lifestyle brand sets the stage for expanded product tests in the near future that could further accelerate the brand reach. Whitening, the total address number.

Ciaran Long: We remain very pleased with Petlon's launch of the modern romance, a wedding guest collection, and a male launch of the Euro Diaries collection, with many styles selling out in the first few weeks. Although dresses represent the dominant portion of the category mix, the growing appeal of Petlon Pop as a lifestyle brand sets the stage for expanded product tests in the near future that could further accelerate the brand's reach, widening the total address of the market.

Ciaran Long: Although dresses represent the dominant portion of the category mix, the growing appeal of Peppermint Pop as a lifestyle brand sets the stage for expanded product tests in the near future that could further accelerate the brand's reach, widening the total addressable market.

Ciaran Long: Turning note to our street wear brands. As I mentioned earlier, Codricings US delivered another quarter of strong dovetit next sales growth on top of strong results last year. We remain thrilled with the consistent strong sales performance and forward profitability in the US flagship Las Vegas location, as well as the growth in the online business. Codricings disrupting the street wear market. There is simply nothing like the immersive experience of our Codricings store, and our offerings across channels span a curated assortment from over 100 leading third-party street wear brands, as well as a large and growing portfolio of in-house design brands and exclusive products that embody the relationship between music, sports, arts, and fashion.

Ciaran Long: Turning note, we're a streetwear brand. As I mentioned earlier, Culture Kings US delivered another quarter of strong double-digit net sales growth on top of strong results last year. We remain thrilled with the consistent, strong sales performance and forward profitability in the U.S. flagship Las Vegas location, as well as the growth in the online business. Country Kings is disrupting the server.

Ciaran Long: There is simply nothing like the immersive experience of our Culture King store, and our offerings across-channel span a curated assortment from over 100 leading third-party streetwear brands, as well as a large and growing portfolio of in-house design brands and exclusive products that embody the relationship between music, sports, arts, and fashion. Our first party brands, such as Leuter, American Thrift, and Minimal, continue to be top performers, with first party brands accounting for more than 50% of total Culture Kings US sales.

Ciaran Long: Our first-party brands, such as Lloyd, her American thrift and minimal, continue to be top performance, with first-party brands accounting for more than 50% of total Codricings US sales. On the engagement front, Codricings developed and hosted another phenomenal lineup of events in the second quarter. Ahead of EDC weekend, one of the largest electronic music festivals in the world, CK teamed up with heat DJ Matrota and Insomniac Records for an incredible Lloyd DJ set on the ground floor of the Las Vegas flagship. In the flagship store. For the milestone UFC 300 event, C.K. launch an exclusive capsule collection in collaboration with UFC and also created a one-of-a-kind varsity jacket with celebrity designer Jeff Hamilton.

Ciaran Long: On the engagement front, Culture Kings developed and hosted another phenomenal lineup of events in the second quarter. Ahead of EDC Weekend, one of the largest electronic music festivals in the world, CK teamed up with hit DJ Matroda and Insomniac Records for an incredible live DJ set on the ground floor of the Las Vegas flagships.

Ciaran Long: On the engagement front, Culture Kings developed and hosted another phenomenal line-up of events in the second quarter. Ahead of EDC weekend, one of the largest electronic music festivals in the world, CK teamed up with hit DJ Matroda and Insomniac Records for an incredible live DJ set on the ground floor of the Las Vegas flagships.

Ciaran Long: For the Milestone UFC 300 event, CK launched an exclusive capsule collection in collaboration with the UFC and also created a one-of-a-kind varsity jacket with celebrity designer Jeff Hamilton. Coachikings also teamed up again with Lyrical Lemonade's Summer Smash Festival in Chicago with another limited edition merchandise collaboration. Going deeper on minimal.

Ciaran Long: Minimal's spring collection achieved record-breaking seasonal sales, highlighting Minimal's ability to swiftly identify and deliver on emerging customer demands and bring fresh ideas to market faster than traditional brands. Following its successful Spring and Summer test phase with retailer DTLR, Minimal Effective expands to all of their locations in August, representing a major step for Minimalist Wholesale Strategy. As I mentioned, minimum allowance was on Nordstrom.com in July with limited numbers.

Ciaran Long: Minimal Spring Collection achieved record-breaking seasonal sales, highlighting Minimal's ability to swiftly identify and deliver on emerging customer demands and bring fresh ideas to market faster than traditional brands. Following its successful spring and summer test phase with retailer DTLR, Minimal Effective expands to all of their locations in August, representing a major step for Minimalist Wholesale Strategy. As I mentioned, Minima Lawrence of Nordstrom.com in July, with unlimited numbers.

Ciaran Long: Following seasonal sales, highlighting minimums of ability to swiftly identify and deliver on emerging customer demands and bring fresh ideas to market faster than traditional brands. Following its successful spring and summer test phase with retail or DTLR, minimal effects to expand to all of their locations in August, representing a major step for minimums wholesale strategy. As I mentioned, minimal launch from Northstone.com in July with a limited number of views. Initial selling is strong, and we look forward to potentially expanding the skewer availability over the coming quarters. We remain bullish on our streetwear brand, long-term growth potential in the US as well as locally.

Ciaran Long: Initial selling is strong, and we look forward to potentially expanding the SKU availability over the coming quarter. We remain bullish on our streetwear brand's long-term growth potential in the U.S. as well as locally. Now we'll provide more detail on the P&L before taking your questions. For the second quarter, as I mentioned, net sales increased 9.5% to $149 million and 10.1% on a constant currency basis compared to the same period last year, driven by strength in our U.S., where net sales increased 19.3% compared to the second quarter of last year. We also experienced meaningfully.

Ciaran Long: Initial selling is strong, and we look forward to potentially expanding the SKU availability over the coming quarter. We remain bullish on our streetwear brand's long-term growth potential in the U.S. as well as locally. Now we'll provide more detail on the P&L before taking your questions. For the second quarter, as I mentioned, net sales increased 9.5% to $149 million and 10.1% on a constant currency basis compared to the same period last year. Here to provide strength in our U.S., where net sales increased 19.3% compared to the second quarter of last year. We also experienced meaningfully

Ciaran Long: Now we'll provide more detail on the P&L before taking your questions. For the second quarter, as I mentioned, net sales increased 9.5% to 149 million and 10.1% on the constant currency basis compared to the same period last year, driven by strength in our US business, in which net sales increased 19.3% compared to the second quarter of last year. We also experienced meaningfully sequential improvements as our brands gained momentum in the US. What we saw softer sales in Australia and New Zealand as compared to the second quarter of 2023, ending down 5% for the period. Sales trends generated significant sequential improvement.

Ciaran Long: Quench and Improvements as our brands gain momentum in the U.S. While we saw softer sales in Australia and New Zealand as compared to the second quarter 2023, ending down 5% for the period, sales trends generated significant sequential improvements. Net sales in the rest of the world declined 1.5% as compared to the second quarter of last year.

Ciaran Long: Quantity Improvements as our brands gained momentum in the US. While we saw softer sales in Australia and New Zealand as compared to the second quarter 2023, ending down 5% for the period, sales trends generated significant sequential improvements. Net sales in the rest of the world declined 1.5% as compared to the second quarter of last year.

Ciaran Long: Next sales in the rest of the world declined 1.5% as compared to the second quarter of last year. Total orders for the second quarter of 1.9 million, increasing 16.4% as opposed to the second quarter last year. In the US, we saw order growth of 31% driven by the impact of our US stores and on the channel initiatives, which was offset by lower demand in the Australian New Zealand region, where orders declined 7%. As I mentioned, our training 12 months active customer count rose to 4 million by the end of the second quarter, at 12% increased compared to a year ago.

Ciaran Long: Total orders for the second quarter were $1.9 million, increasing 16.4% as compared to the second quarter last year. In the U.S., we saw order growth of 31 percent, driven by the impact of our U.S. stores and omnichannel initiatives, which was offset by lower demand in the Australian and New Zealand region, where orders declined 7 percent. As I mentioned, our trailing 12-month active customer count rose to 4 million by the end of the second quarter, a 12% increase compared to a year ago.

Ciaran Long: Our second quarter average order value was 78 dollars, down 4.9% compared to the second quarter last year, due to softer sales in Australia and New Zealand, and the actions we've taken to improve our inventory position at Culture Kings in Australia and move them to our test repeat merchandising model. Turning out profitability growth margin expanded 80 basis points in the second quarter to 57.7% compared to 56.9% in the same period last year, driven by lower air freight costs and strong full-price selling. This was likely offset by the channel mix shift to wholesale and planned promotions at Culture Kings Australia.

Ciaran Long: Our second quarter average order value was $78, down 4.9% compared to the second quarter last year due to softer sales in Australia and New Zealand and the actions we've taken to improve our inventory position at Culture Kings in Australia and move them to our Tesla Repeat merchandising market. Turning now to profitability. Gross margin expanded 80 basis points in the second quarter to 57.7% compared to 56.9% in the same period last year, driven by lower air freight costs and strong full price selling.

Ciaran Long: Selling expenses were $41.2 million compared to $35.9 million in the second quarter of 2023; selling expenses were 27.7% of net sales compared to 26.4% a year ago due primarily to the impact of growing marketplace initiatives and additional. Marketing expenses in the corridor were flat year over year. As a percentage of net sales, marketing expenses leveraged 120 basis points to 12.3%, compared to 13.5% in the second quarter of 2023. We experience enhanced marketing efficiencies driven by strong performance at Petal and Pup, Princess Polly, and Culture Kings US, as well as leverage from higher sales at wholesale and in-store.

Ciaran Long: This was slightly offset by the channel mix shift to wholesale and planned promotions at Culture Kings Australia. Selling expenses were $41.2 million compared to $35.9 million in the second quarter of 2022. Selling expenses were 27.7% of net sales compared to 26.4% a year ago, due primarily to the impact from growing marketplace initiatives and additional. Marketing expenses in the quarter were flat year over year.

Ciaran Long: William. Sunny expenses were 41.2 million compared to 35.9 million in the second quarter of 2023. Sunny expenses were 27.7% of net sales compared to 26.4% a year ago, due primarily to the impact from growing marketplace initiatives and additional stores. Marketing expenses in the quarter were flat year over year. As a percentage of net sales, marketing expenses leveraged 120 basis points to 12.3% compared to 13.5% in the second quarter of 2023. We experienced enhanced marketing efficiencies driven by strong performance at Pedal and Pop, Princess Polly, and Colljard King's US, as well as leverage from higher sales at wholesale and in stores.

Ciaran Long: As a percentage of net sales, marketing expenses leveraged 120 basis points to 12.3%, compared to 13.5% in the second quarter of 2023. We experienced enhanced marketing efficiencies driven by strong performance at Petal and Cup, Princess Polly, and Culture Kings US, as well as leverage from higher sales at wholesale and in-store. General and administrative expenses were $25.9 million compared to $24.2 million in the second quarter of 2023. As a percentage of net sales, G&A expenses decreased to 17.4% from 17.8% in the second quarter of last year due to leverage from higher net sales.

Ciaran Long: General and administrative expenses were 25.9 million compared to 24.2 million in the second quarter of 2023. As a percentage of net sales, GNA expenses decreased to 70.4% from 70.8% in the second quarter of last year due to leverage from higher net sales. We delivered a just an EBITDA of 8 million compared to 5.6 million in the same period last year, ahead of expectations. Adjusted EBITDA of Marching for the second quarter of 2024 increased 130 basis points to 5.4% compared to 4.1% in the same period last year.

Ciaran Long: General and administrative expenses were $25.9 million compared to $24.2 million in the second quarter of 2023. As a percentage of net sales, G&A expenses decreased to 17.4 from 17.8% in the second quarter of last year due to leverage from higher net sales.

Ciaran Long: We delivered adjusted EBITDA of $8 million compared to $5.6 million in the same period last year, ahead of expectations. It's just that EBITDA margin for the second quarter of 2024 increased 130 basis points to 5.4% compared to 4.1% in the same period last year.

Ciaran Long: We delivered adjusted EBITDA of $8 million compared to $5.6 million in the same period last year, ahead of expectation. It's just that EBITDA margin for the second quarter of 2024 increased 130 basis points to 5.4% compared to 4.1% in the same period last year.

Ciaran Long: Turning note to the balance sheet. We ended the quarter with 25.5 million in cash and cash equivalent, debt totaling 106.9 million at the end of the quarter compared to 120 million a year ago. On inventory, we ended the quarter with 107 million in inventory, flat with a year ago. During the quarter, we made continued progress reducing our Colljard King's inventory levels, and we are comfortable with our inventory levels as our investments are in our strongest training brands.

Ciaran Long: We ended the quarter with $25.5 million in cash and cash equivalents, debt totaling 106.9 million at the end of the quarter compared to 120 million a year ago. On inventory, we ended the quarter with $107 million in inventory, flat with a year ago. June the quarter, we made continued progress reducing our culture kings inventory levels, and we are comfortable with our inventory levels as our investments are in our strongest trending. A quick update on our stock repurchase program; in the second quarter, we repurchased 11,046 shares for a total cost of approximately $100,000. As of the end of the quarter, we have $1.7 million remaining in our share repurchase authorization. No turning to our Oak Nook for 2024.

Ciaran Long: We ended the quarter with $25.5 million in cash and cash equivalents, debt totaling 106.9 million at the end of the quarter compared to 120 million a year ago. On inventory, we ended the quarter with $107 million in inventory, flat with a year ago. In the quarter, we made continued progress reducing our Culture Kings inventory levels, and we are comfortable with our inventory levels as our investments are in our strongest trending. A quick update on our stock repurchase program; in the second quarter, we repurchased 11,046 shares for a total cost of approximately $100,000. As of the end of the quarter, we have $1.7 million remaining in our share repurchase authorization. No turning to our Oak Nook for 2024.

Ciaran Long: A quick update on our software purchase program. In the second quarter, we were purchased 11,000 and 46 shares for a total cost of approximately 100,000. As of the end of the quarter, we have 1.7 million remaining in our share repurchase authorization.

Ciaran Long: No turning to our outlook for 2024. Given the strength in our first half results, we were adjusting our outlook and our expected deliver between 560 and 565 million in net sales for the full year. For the year, we expect close margin between 56 and 57%, and we anticipate selling expenses to be approximately 27% in net sales and market expenses of approximately 12.5%. We expect GNA expense between 100 million and 110 million for the full year 2024. As a reminder, as we continue to expand into other channels such as wholesale and marketplace, we expect it will in fact affect the composition of our expenses.

Ciaran Long: Given the strength in our first half results, we're adjusting our outlook and now expect to deliver between $560 million and $565 million in net sales for the full year. For the year, we expect gross margin between 56% and 57%, and we anticipate selling expenses to be approximately 27% of net sales and marketing expenses of approximately 12.5%. We expect G&A expenses between $100 million and $110 million for the full year 2024. As a reminder, as we continue to expand into other channels, such as wholesale and marketplace, we expect it will impact the composition of our experience.

Ciaran Long: Given the strength in our first half results, we're adjusting our outlook and now expect to deliver between $560 million and $565 million in net sales for the full year. For the year, we expect gross margin between 56 and 57%, and we anticipate selling expenses to be approximately 27% of net sales and marketing expenses of approximately 12.5%. We expect G&A expenses between $100 million and $110 million for the full year 2024. As a reminder, as we continue to expand into other channels, such as wholesale and marketplace, we expect it will impact the composition of our experience.

Ciaran Long: While the EBITDA contributions are similar to our core business, our wholesale and marketplace initiatives have low gross margin with a corresponding benefit in selling and marketing. We expect to see more of an impact in the back-off of 2024 as these channels grow. For the year, we know expected EBITDAW of between 20 million and 22 million, weighted average, valued share account of 10.6 million, capital expenditure between 12 and 14 million, and an effective tax rate of 10%. For the third quarter, we expect net sales between 141 million and 145 million, and adjusted EBITDAW of between 6 and 7 million.

Ciaran Long: Well, the EBITDA contributions are similar to a core business. However, our wholesale and marketplace initiatives have a lower gross margin with the corresponding benefits in selling and marketing. We expect to see more of an impact in the back half of 2024 as these channels, For the year, we now expect adjusted EBITDA of between $20 million and $22 million, a weighted average diluted share count of $10.6 million, capital expenditures between $12 and $14 million, and an effective tax rate of $10.

Ciaran Long: Well, the EBITDA contributions are similar to a core business. However, our wholesale and marketplace initiatives have lower gross margins with a corresponding benefit in selling and marketing. We expect to see more of an impact in the back half of 2024 as these channels, For the year, we now expect adjusted EBITDA of between $20 million and $22 million, a weighted average diluted share count of $10.6 million, capital expenditures between $12 and $14 million, and an effective tax rate of $10.

Ciaran Long: For the third quarter, we expect net sales between $141 million and $145 million and adjusted EBITDA of between $6 and $7 million. In summary, as you've heard, we delivered a very strong quarter with double-digit constant currency top-line growth with healthy flow-through resulting in EBITDA growth of 44% over the prior year period. The transformational work we started in 2023 combined with our culture of innovation is driving meaningful improvement across the globe. We remain committed to building our portfolio of next-generation brands for the next generation of consumers, while staying relentlessly focused on executing our strategic priorities to enable AKA brands to fuel consistent, long-term, profitable growth, capitalizing on the tremendous opportunity we see to expand our total addressable market. We operate with a mindset of continuous improvement.

Ciaran Long: In summary, as you've heard, we delivered a very strong quarter with double digits, constant currency, top line growth, with healthy flow through resulting in EBITDAW growth of 44% over the prior year period. The transformation of work we started in 2023, combined with our culture of innovation, is driving meaningful improvement across the business. We remain committed to building a portfolio of next-generation brands for the next generation of consumers, while things relentlessly focused on executing our strategic priorities to enable aka brands to fuel consistent, long-term, profitable growth, capitalizing on the tremendous opportunity we see to expand our total address for the market.

Ciaran Long: We remain committed to building our portfolio of next-generation brands for the next generation of consumers while staying relentlessly focused on executing our strategic priorities to enable AKA brands to fuel consistent, long-term, profitable growth, capitalizing on the tremendous opportunity we see to expand our total addressable market. We operate with a mindset of continuous improvement. So while we recognize there is more work ahead of us, we're encouraged and motivated by the momentum in our business, and I'm excited to continue executing our strategies as we head into the back half. Now, I will open up the call to your

Ciaran Long: We operate with a mindset of continuous improvement. So, I recognize there is more work ahead of us where it purged and motivated by the momentum in our business, and I'm excited to continue executing our strategies as we head into the back half of the year.

Ciaran Long: So while we recognize there is more work ahead of us, we're encouraged and motivated by the momentum in our business, and I'm excited to continue executing our strategies as we head into the back half. Now, I will open up the call to your

Ciaran Long: Now, I will open up the call to your questions. Thank you.

Operator: Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the questioning queue. You may press star 2 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 1 at this time.

Operator: Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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 1 at this time.

Unknown Attendee: We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in a question and queue. You may press star 2 if you would like to remove your question from the queue. For participants using speak equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that star 1 at this time. One moment while we pull for the first question. Thank you.

Operator: One moment while we poll for the first question. Thank you. The first question comes from Randy Konik with Jeffreys. Please proceed.

Operator: One moment while we poll for the first question. Thank you. The first question comes from Randy Koenig with Jeffreys. Please proceed.

Randy Kohnick: The first question comes from Randy Kohnick with Jeffries. Please proceed.

Randy Kohnick: Thanks a lot, and good evening. You guys are seeing a lot of success with the multi-channel approach you've been undertaking, whether it's stores, wholesale, and obviously DTC with eCOM. I guess my question is it's kind of think about over the next few years, the next three to five years. How do you think about the optimal channel kind of mix in the business if we were to think through over the next few years? Be super helpful. Thanks. Yeah.

Randy Koenig: Yeah, thanks a lot, and good evening. Ciaran, you guys are seeing a lot of success with the multi-channel approach you've been undertaking, whether it's stores, wholesale, and, obviously, DTC with e-comm. I guess my question is, if you kind of think about over the next few years, let's say the next three to five years, how do you think about the optimal channel kind of mix in the business if we were to think through it over those next few years? It'd be super helpful. Thanks.

Randal Konik: Yeah, thanks a lot, and good evening. Ciaran, you guys are seeing a lot of success with the multi-channel approach you've been undertaking, whether it's stores, wholesale, and, obviously, DTC with e-comm. I guess my question is, if you kind of think about over the next few years, let's say the next three to five years, how do you think about the optimal channel kind of mix in the business if we were to think through it over those next few years? It'd be super helpful. Thanks.

Ciaran Long: Yeah, thanks, Randy. I appreciate the question.

Ciaran Long: Thanks, Randy. I appreciate the question. I think we are seeing just really nice success. I think we're really happy to see the progress and the results from the transformational work we really started, I suppose, over the last couple of years, with overall sales up 9.5% and the U.S. up 19%. As we think about those different channels, I feel we really look to them. If there are opportunities to elevate our brands, and if the economics are at the level we expect them to be, we're happy to lean into those channels. If it's missing one of those two things, we won't use it.

Ciaran Long: Thanks, Randy. Appreciate the question. I think we are seeing just really nice success.

Ciaran Long: You know, I think, yeah, we are seeing really nice success. I think we're really happy to see the progress and the results from the transformational work we really started, I suppose, over the last couple of years, you know, with overall sales up nine and a half and the US up 19%. You know, I think as we think about, you know, those different channels, I feel, you know, we really look at them. If there are opportunities to elevate our brands, and if the economics are at the level we expect them to be, we're happy to lean into those channels. But if it's missing one of those two things, we won't.

Ciaran Long: I think we're really happy to see the progress and the results from the transformation work we really started over the last couple of years. Overall sales of 9.5 and the US of 19%. As we think about those different channels, I feel we really look to them. If there are opportunities to elevate our brands, and if the economics are at the level we expect them to be, we're happy to start. I think we've learned a lot from the tests that we've done over the last 12 or 18 months, I think, and we see just tremendous opportunities across the brands.

Ciaran Long: We've learned a lot from the tests that we've done over the last 12 or 18 months, and with them, we see tremendous opportunities across the brands. I think the Culture King store in Vegas is doing really well. The Poly store is ahead of expectations in sales and profits. Petal and Pop is just a really strong performance as they have leaning into some of these wholesale opportunities, and I think we're going to continue to drive into those.

Ciaran Long: I think, you know, we've learned a lot from the tests that we've done over the last, you know, 12 or 18 months, I think, and, you know, with it, we see, you know, tremendous opportunities across the brands. I think, you know, the Culture King store in Vegas is doing really well. The Poly store is ahead of expectations on sales and profits, you know, and Petal and Pop is just a really strong performance as they have leaned into some of these wholesale opportunities.

Ciaran Long: I think the culture can store in Vegas is doing really well. The polystores ahead of expectations and sales and profits. Petal and Pop is just a really strong performance as they have leaned into some of these wholesale opportunities. I think, look, we're going to continue to drive into those.

Ciaran Long: I think, look, we're going to continue to drive into those. And I think, long term, we certainly feel that we're still going to be predominantly a direct-to-consumer business, but we certainly see opportunities for us to continue with all of the brands kind of expanding into these omni-channel opportunities and just continuing to lean into kind of, you know, really strong, profitable growth across each of the brands.

Ciaran Long: I think long-term we certainly feel that we're still going to be predominantly a direct consumer business, but we certainly see opportunities for us to continue with all of the brands, kind of expanding into these on the channel opportunities and just continuing to lean into really strong, profitable growth across each of the brands.

Ciaran Long: I think long-term, we certainly feel that we're still going to be predominantly a direct-to-consumer business, but we certainly see opportunities for us to continue with all of the brands expanding into these omnichannel opportunities and just continuing to lean into really strong, profitable growth across each of the brands.

Randy Kohnick: Degreuffle, my last question is when we look at the landscape out there in apparel, one thing is that it's starting to become more clear is the fashion-based businesses are almost starting to come back, your business revolve, et cetera, while we're starting to see continued acceleration in these at leisure athletic type businesses. So it looks like there's a real fashion shift happening in a big way. Are you seeing that? Is that partly why that's kind of becoming more of a tailwind to your business in addition to just better product, better execution, et cetera? Just your thoughts on the kind of big fashion environment would be super helpful as well.

Randy Koenig: My last question is, when we look at the landscape out there in apparel, one thing that is starting to kind of become more clear is fashion-based businesses are almost starting to come back, your business, Revolve, etc., while we're starting to see continued deceleration in these leisure, athletic-type businesses. So it looks like there's a real fashion shift happening in a big way. Are you seeing that? Is that partly why it's kind of becoming more of a tailwind to your business in addition to just better products, better execution, etc.? Just your thoughts on the kind of big fashion environment would be super helpful as well.

Randal Konik: My last question is, you know, when we look at the landscape out there in apparel, one thing that is starting to kind of become more clear is fashion-based businesses are almost starting to come back, your business, Revolve, et cetera, while we're starting to see continued deceleration in these leisure, athletic-type businesses. So it looks like there's, you know, a real fashion shift happening in a big way. Are you seeing that?

Randal Konik: Is that partly why that's kind of becoming more of a tailwind to your business in addition to just better products, better execution, et cetera? Just, you know, your thoughts on the kind of big fashion environment would be super helpful as well.

Ciaran Long: Yeah, thanks, Randy. Look, I think we're very fortunate that we have four great brands that people love. I think within that, you know, for each of the brands, pretty much all of the product that they have is proprietary and, you know, and exclusive to us. So I think one of the big advantages that we have is just, you know, our product just being exclusive. I think then just the kind of power of the test and repeat model.

Ciaran Long: Yeah, thanks, Randy.

Ciaran Long: I think we're very fortunate that we four great brands that people love. I think within that, for each of the brands, pretty much all of the product that they have is proprietary and exclusive to us. So I think one of the big advantages that we have is just our product just being exclusive. I think then just the power of the test and repeat model. I think we clearly see it in the business. We clearly see that the brands, and when you're able to stay so close to being on-trained, you can really lean into what you see.

Ciaran Long: I think, you know, we clearly see it in the business. We clearly see the brands. And, you know, when you're able to stay so close to being on trend, you can really lean into what you see is just being, you know, really responding with customers. And you can do that from a merchandise perspective, but it also has huge benefits as you look from a marketing perspective as well.

Ciaran Long: It's just being really resonating with customers, and you can do that from a merchant perspective, but also has huge benefits as you look from a marketing perspective as well. I think look, we see that resonating with our customers, with our active customers, up 12% to year over year, nearly 420,000 customers. I think we've seen broad-based success, really able to have crossed the categories, Randy. Certainly for Princess Polly, Petal and Puff, they are both very strong in dresses, and we certainly saw a lot of success there in Q2, but also really happy with the new category expansion.

Randy Koenig: And I think we see that responding with our customers, with our active customers up, you know, 12% year over year, nearly 420,000 customers. I think we've seen a broad-based kind of success, really, I would say, across the categories, Randy. Certainly for Princess Polly, Petal, and Pup, they are both very strong addresses, and we certainly saw a lot of success there in Q2. But we are also really happy with the new category expansion Princess Polly did in the first quarter and is continuing to do, and to, you know, lounge or sleep or other areas. I think, you know, we feel there are a lot of opportunities. And I think just leveraging on that, you know, test and repeat model, really listening to the customer, is going to continue to pay in advance.

Ciaran Long: I think we've seen a broad-based kind of success, really, I would say, across the categories, Randy. Certainly for Princess Polly, Petal, and Pup, they are both very strong addresses, and we certainly saw a lot of success there in Q2. But also really happy with the new category expansion Princess Polly did in the first quarter and is continuing to do into, you know, loungewear, sleepwear, other areas. I think, you know, we feel there's a lot of opportunities, and I think just leveraging on that, you know, test and repeat model, really listening to the customer is going to continue to pay off.

Randal Konik: Super helpful. Thanks so much.

Ciaran Long: Princess Polly has done in the first quarter and is continuing to do and to lounge where sleep or other areas. I think we feel there's a lot of opportunities, and I think just leveraging on that test and repeat model, really listening to the customer, is going to continue to pay advantages in the future.

Ciaran Long: Super helpful. Thanks so much.

Randy Kohnick: Super helpful. Thanks so much.

Eric Beater: The next question comes from Eric Beater with SEC research. Please proceed.

Eric Beder: The next question comes from Eric Beder with FCC Research. Please proceed. Good afternoon.

Eric Beder: Good afternoon. Congratulations on the upside for the quarter. Thanks, Eric. I want to talk about Culture Kings.

Eric Beater: We knew congratulations on the upside for the quarter.

Ciaran Long: Thanks, Eric. We'll talk about Culture Kings, so we are entering the period now where you're going to be shifting that business over to the test and repeat mode. How should we be thinking about the opportunities for that going forward, and how does that work in respect with the exclusives and the first and third party providers to the brand? Yeah, sure.

Eric Beder: So we are entering the period now where you're going to be shifting that business over to the test and repeat mode. How should we be thinking about the opportunities for that going forward? And how does that work in respect to the exclusives and the first and third party providers to the brand?

Ciaran Long: So we are entering the period now where you're going to be shifting that business over to the test and repeat mode. How should we be thinking about the opportunities for that going forward? And how does that work in respect to the exclusives and the first and third party providers to the brand?

Ciaran Long: Thanks Eric, I think we are really happy with the progress that Country Kings continues to make and, as I talked in my prepared remarks, it continues to be up double digits in the US on top of strong results last year, and we see tremendous opportunity for it. You know, we're making nice progress moving their first party brands to test and repease, and just as a reminder, that about 50% of their revenue comes from those first party brands, and they're really seeing strong responses from customers from Lloyds or Carre, or what they're doing in their t-shirts and printable business is going really strong.

Ciaran Long: Yeah, sure. Thanks, Eric.

Ciaran Long: Thanks, Eric. I think we are really happy with the progress that Culture Kings continues to make, and as I talked in my prepared remarks, it continues to be up to the digits in the US on top of strong results last year. We see tremendous opportunity for us. It is, we're making night progress moving their first party brands to test and repeat, and just as a reminder, that's about 50% of their revenue comes from those first party brands, and really think strong response from customers from lawyers or caray, or what they're doing in their t-shirts and printable business is going really strong.

Ciaran Long: Yeah, I think, look, we're really happy with the progress that Country Kings continues to make. And, as I talked in my prepared remarks, you know, it continues to be up double digits in the US on top of strong results last year. And we see tremendous opportunity for it. You know, we're making nice progress moving their first party brands to test and repurchase. And just as a reminder, that's about 50% of their revenue comes from those first party brands.

Ciaran Long: And really think of the strong response from customers from, you know, Lloyds or Carre or what they're doing in their, you know, t-shirts and printable business. It's going really strong. You know, I think as we think about that heading into the back half of the year, you know, we are focused on, you know, from that change in test and repiece, it's very much focused on margin expansion in the back half. You know, we do know we're up against the strong promotional activity we took last year to right-size Country King inventory.

Ciaran Long: I think as we think about that heading into the back half of the year, we are focused on, from that change on test or repeat, is very much focused on margin expansion in the back half. We do know we're up against strong promotional activity we took last year to write today's culture king's inventory, so that will be somewhat of a headwind, or are expecting to get margin expansion. I think as we see the progress they're making on test and repeat, we see it working. For each week, you're bringing on new products; you're picking the winners and then repeating into them.

Ciaran Long: You know I think as we think about that heading into the back half of the year you know we are focused on you know from that change on test and repease you know is very much focused on margin expansion in the back half you know we do know we're up against strong promotional activity we took last year to right size Country Kings inventory so you know and that will be somewhat of a headwind but are expecting to get margin expansion and I think as we see kind of the progress they're making on test and repease you know it's we see it working you know it is you know for each each week you're bringing on new products you're picking the winners and then repeating into them you know so I think it it takes time to build that cohort of winners right and you know and can take quite a bit of time but it's just a really powerful flywheel when it gets going and we see the benefit it has across our three brands and are certainly kind of going to continue to lean into it and are happy with the progress Country Kings are making.

Ciaran Long: So, you know, and that will be somewhat of a headwind, but they are expecting to get margin expansion. And I think as we see kind of the progress they're making on test and repiece, you know, it's, we see it working, you know, it is, you know, for each week you bring in new products, you pick the winners and then repeat them, you know, so I think it takes time to build that cohort of winners, right?

Ciaran Long: It takes time to build that cohort of winners. It can take quite a bit of time, but it's just a really powerful flow when it gets going, and we see the benefit that has across our three brands and are certainly going to continue to be an inventory and are happy with the progress Culture Kings are making.

Ciaran Long: And, you know, it can take quite a bit of time, but it's just a really powerful flywheel when it gets going. And we see the benefit it has across our three brands and are certainly kind of going to continue to lean into it and are happy with the progress Country Kings are making.

Ciaran Long: Thank you. Great.

Eric Beder: Great. And in terms of Princess Polly, you know, you added new stores to the mix. You know, what should we be like, for people who know the Accenture City stores? What is going to change in these other stores? You know, that was a great test. It did really, and continues to do really well. You know, what's going to be the evolution of the Princess Polly store as we see these new other ones come on?

Eric Beater: And in terms of Princess Olly, and you added the new stores to the mix, what should we be for people who know the Century City stores? What is going to change in these other stores? You know, that was a great test. It really continues to really well.

Ciaran Long: What's going to be the evolution of the Princess Olly store as we see these new water ones come on? Yeah, I think, you know, we're really excited for, you know, to continue to expand Princess Olly's footprint to stores. You know, the LA store has done really well and, you know, is one of the drivers of, and kind of, one of the drivers and also just helps build awareness for Princess Polly, you know, from an online perspective as well. And, you know, it's a key part of the driver of that 19% growth in the US that we saw last quarter.

Ciaran Long: Yeah, I think, you know, we're really excited to continue to expand Princess Folly's footprint of stores. You know, the LA store has done really well, and it's one of the drivers and kind of a driver and also just helps build awareness for Princess Polly, you know, from an online perspective as well. And, you know, a key part of the driver of that 19% growth in the U.S. that we saw last quarter.

Ciaran Long: Yeah, I think, you know, we're really excited to continue to expand Princess Folly's footprint to stores. You know, the LA store has done really well, and it's one of the drivers and kind of a driver and also just helps build awareness for Princess Polly, you know, from an online perspective as well. And, you know, a key part of the driver of that 19% growth in the US that we saw last quarter.

Ciaran Long: You know, I think Polly, that's their first store that they've learned a lot, you know, just from a merchandising perspective, the size of the store, the new stores will be bigger than that LA store. And, you know, certainly change from a visual merchandising perspective. Yeah, expecting to put in more skews and really see how they take that really compelling online experience that they have, you know, leveraging that test and repeat model, not just having newness online each week but also newness in the store each week. They see that customers are coming back each week to see it, to experience it in real life.

Eric Beder: You know, I think Polly's that's their first store and they've learned a lot, you know, just from a merchandising perspective, you know, the size of the store, the new stores will be bigger than that LA store. And, you know, certainly change from a visual merchandising perspective, expecting to put in more SKUs and really see how they take that really compelling online experience that they have, you know, leveraging that test and repeat model, not just having newness online each week but also newness in the store each week.

Ciaran Long: You know, I think Polly, that's their first store that they learned to loss, you know, just from a merchandising perspective. You know, the studies of the store, the new stores will be bigger than that of LA store and, you know, certainly change from a visual merchandising perspective, expecting to put in more skews. And really see, you know, how do they think that really compelling online experience that they have, you know, leveraging that test repeat model, not just having newness online each week, but also newness in the store each week. They see that customers coming back each week to see its experiences in real life.

Eric Beder: They see that customers are coming back each week to see it, to experience it in real life. And so there are some changes. Look, I think it's great that the new plans they have; I think there's just a huge opportunity for Princess Polly to continue executing and continue to build out their store footprint and really just, you know, introduce themselves to more and more new customers and get that halo effect in their online business.

Ciaran Long: And so there are some changes. Look, I think it's great that the new plans they have, I think there's just a huge opportunity for Princess Polly to continue executing and continue to build out their store footprint and really just, you know, introduce themselves to more and more new customers and get that halo in their online business.

Ciaran Long: And so, there are some of the changes.

Ciaran Long: Look, I think it's great that the new plans they have. I think it's just a huge opportunity for Princess Polly to continue executing and continue to build out their store footprint. And really just, you know, introduce themselves to more and more new customers and get that halo in their online business as well.

Eric Beater: Great.

Eric Beder: Great. Good luck in the back now. Thank you. Thanks, Eric.

Eric Beder: Great. Good luck in the back now. Thank you.

Unknown Attendee: Good luck in the back out. Thank you.

Unknown Attendee: Thanks, Eric.

Youssef Squali: The next question comes from Youssef Squali with Truett Securities. Please proceed.

UCF Scully: The next question comes from UCF Scully with two of securities. Please proceed.

Youssef Squali: The next question comes from Youssef Squali with Truett Securities. Please proceed.

Youssef Squali: Thank you, and Ciaran, it's nice to see you guys doing well, so congratulations. A couple of questions, maybe.

UCF Scully: Thank you.

UCF Scully: I'm Karen. It's nice to see you guys do well, so congrats. A couple of questions. Maybe as you look at your performance, it's quarter versus Q1, and certainly throughout most of last year. What would you say were the two or three big analogs of this quarter that drove that in performance, maybe online versus offline, maybe across brands, certainly geos that can be what has been clearly outperformer. And then, as I look at your Q3 guide, it basically implies prematurely slowed down to something like one or two percent of the midpoint versus, again, nine or 10 percent in Q2.

Youssef Squali: As you look at your performance this quarter versus Q1 and certainly throughout most of last year, what would you say were the two or three big unlocks of this quarter that drove that performance, maybe online versus offline, maybe across brands, certainly GEOs back in the US as being clearly the outperformer? And then as I look at your Q3 guide, it basically implies a premature slowdown to something like one or 2% at the midpoint versus again, nine or 10% in Q2. So what happened in Q2 that you don't necessarily see happening in Q3? Thanks Youssef.

Youssef Squali: As you look at your performance this quarter, Q1 and certainly throughout most of last year, what would you say were the two or three big unlocks of this quarter that drove that performance, maybe online versus offline, maybe across brands, certainly geodes? I think the US has been clearly the outperformer. And then as I look at your Q3 guide, it basically implies a premature slowdown to something like one or 2% at the midpoint versus again, nine or 10% in Q2. So what happened in Q2 that you don't necessarily see happening in Q3? Sure. Thanks, Youssef.

Ciaran Long: So what happened in Q2 that don't necessarily see happening in Q3?

Ciaran Long: Sure. Thank you. And yeah, look, I think we're really happy with that Q1 performance and certainly building on the actions we've been taking know over the last number of quarters. And just I think certainly that U.S. growth of 90 percent and extend those and doing that with gross margins of 80 percent and inventory flat, just a great view of I think what this model can do. I think as we think about the drivers, you said I would say direct consumer business was, from a channel perspective, that the largest rival across the brands. And you know, the on the various on me across the different brands coming up after that.

Ciaran Long: Yeah, look, I think we're really happy with that Q1 performance and certainly building on the actions we've been taking over the last number of quarters. And just, I think, that U.S. growth of 19% is a standout, doing that with gross margins up 80% and inventory flat, just a great view of, I think, what this model can do. Yeah, I think as we think about the drivers, Youssef, I would say, from a channel perspective, the largest driver across the brands is direct consumer business.

Ciaran Long: Yeah, look, I think we're really happy with that Q1 performance and certainly building on the actions we've been taking over the last number of quarters. And just, I think certainly that U.S. growth of 19% is a standout, doing that with gross margins up 80% and inventory flat, just a great view of, I think, what this model can do. I think as we think about the drivers, Youssef, I would say direct consumer business was, from a channel perspective, the largest driver across the brands, with the various omnichannel across the different brands coming up after that.

Ciaran Long: And, you know, the various omnichannel across the different brands coming up after that. You know, from a brand perspective, I think, you know, Princess Polly certainly was very, very strong during the Q1 quarter. And we saw tremendous growth at Petal and Pop on the omnichannel initiatives that they really lean into. You know, I think as we think about the back half of the year, really just the change in trend is, you know, we've come out of a period where we've been quite promotional in Australia to move through that Culture Kings inventory.

Ciaran Long: From a brand perspective, I think Princess Polly certainly was very, very strong during the quarter, and we saw tremendous growth at Petal and Pop on the omni-channel initiatives that they really leaned into. You know, I think as we think about the back half of the year, really just the change in trend is, you know, we've come out of a period where we've been quite promotional in Australia to move through that Culture Kings inventory.

Ciaran Long: You know, from a brand perspective, I think, you know, print is probably certainly very, very strong during the quarter. And we felt tremendous growth at Patulin Popp on the channel initiatives that they really need into.

Ciaran Long: You know, I think as we think about the back half of the year, really just that the change in trend is, you know, we've come out of a period where we've been quite promotional in Australia to move through that kosherkin's inventory. I think you see kind of, you know, the comp's somewhat improving there, sequentially anyway in Q2. I think as we think of the back half, we feel like we're kind of predominantly past that and are more focused now on seeing that kind of gross margin expansion and really looking to for that in the back half of the year, certainly continuing to lean into the omnichannel opportunities, but do you know it's more, you know, gross margin focused and that we do have, you know, probably a harder lap in the back half of last year when we were also very, very promotional and particularly in Australia.

Ciaran Long: I think you see kind of, you know, the comps somewhat improving sequentially anyway in Q2. I think as we think of the back half, we feel like we're kind of, we're predominantly past that and are more focused now on seeing that kind of gross margin expansion and really looking for that in the back half of the year. Certainly, continuing to lean into the omni-channel opportunities, but do know it's more, you know, gross margin focused and that we do have, you know, probably a harder lap in the back half of last year when we were also very, very promotional, particularly in Australia.

Ciaran Long: And then on the, on the debt management, can you talk about any upcoming debt maturities and how you're planning on servicing them? Yeah, sure. And, you know, our debt maturers in September, 2026. You know, I think mid-reading last part of this last year when we paid down 50 million of deaths, about 35%.

Youssef Squali: And then on debt management, can you talk about... any upcoming maturities and how you're planning on servicing them? Yeah, sure.

Youssef Squali: And then on debt management.

Ciaran Long: Debt Management, can you talk about... Any upcoming maturity and how you're planning on servicing it? Yeah, sure.

Ciaran Long: Our debt matures in September 2026. I think we made really nice progress last year when we paid down 50 million in debt, about 35%. There was some build in the first half of this year as we leaned into some inventory at the stronger performing brands and saw some build there. We do expect to continue to pay down or pay down more debt in the back half of this year, and certainly we'll continue to do that going forward.

Ciaran Long: And, you know, our debt matures in September 2026. And, you know, I think I made a really nice part of this last year when we paid down 50 million in debt, about 35%. And, you know, there were some bills in the first half of this year, as we, you know, leaning into some inventory at the, you know, the stronger performing brands. It's also been there, and we do expect to pay down and to continue to pay down or pay down more debt in the back half of this year.

Ciaran Long: And, you know, there was some builds in the first half of this year as we, you know, leaned into some inventory at the, you know, the stronger performing brands that's also been there. And we do expect to pay down and to continue to pay down or pay down more debt in the back half of this year. And, certainly, you know, we continue to do that going forward.

Ciaran Long: And certainly, you know, we'll continue to do that going forward. We certainly don't want to be, or look like, a highly leveraged business. And I think, look, with the progress we've made now, with EBITDA going much faster than sales growth of 44% year over year, and we certainly feel that the model is there where we can continue to pay down debt and bring down leverage.

Ciaran Long: We certainly don't want to be, you know, or look to be a highly leveraged business. And, I think look with the progress we've made now, you know, with even going, you know, much faster than sales growth, up 44% year, year over year. And, we certainly feel that the model is there where we can continue to pay down debt and bring down leverage.

Ciaran Long: We certainly don't want to be or look to be a highly leveraged business. And I think with the progress we've made now with EBITDA growing much faster than sales growth, up 44% year over year, we certainly feel that the model is there where we can continue to pay down debt and bring down leverage. Thank you very much.

Unknown Attendee: That's great. Thank you very much.

Youssef Squali: That's great. Thank you very much.

Ashley Owens: The next question comes from Ashley Owens with KeyBank. Please proceed.

Ashley Owens: Hi, good afternoon. So, just first, I want to talk about Australia and some of the choppiness there. Can you just talk about what's embedded in the forecast a bit? And, then based on the pressure, I guess, when are you kind of expecting that geography to return to growth and how's that shifted at all?

Ashley Owens: Hi, good afternoon. So just first, I want to talk about Australia and some of the choppiness there. Can you just talk about what's embedded in the forecast a bit? And then, based on the pressure, I guess, when are you kind of expecting that geography to return to growth? And has that shifted at all? And also just curious in terms of coordinated trends, you know, what you're seeing by region and by category as well.

Ashley Owens: Hi, good afternoon. So just first, I want to talk about Australia and some of the choppiness there. Can you just talk about what's embedded in the forecast a bit? And then, based on the pressure, I guess, when are you kind of expecting that geography to return to growth? And how has that shifted at all? And also just curious in terms of coordinated trends, you know, what you're seeing by region and by category as well.

Ciaran Long: Sure. Thanks, Ashley.

Ciaran Long: And, also, just curious in terms of coordinated trends, you know, what you're seeing by region and by category as well. Sure.

Ciaran Long: Thanks, Ashley. Yeah. Look, I think, you know, certainly making progress in Australia. It was really nice to see the sequential improvement there.

Ashley Owens: Yeah, look, I think, you know, certainly making progress in Australia. It was really nice to see the sequential improvement there. I think, you know, underneath that as well, we kind of see, on just the day-to-day business, the progress Culture Kings are making, moving on to that test and repeat model, and how the newer product that they're bringing in is really resonating with customers, right. And so for us, I think, as we go into the back half of the year, we feel that should drive margin expansion and are certainly going to look to execute against that.

Ashley Owens: Yeah, look, I think, and certainly making progress in Australia, it was really nice to see the sequential improvement there. I think, you know, underneath that, as well, we kind of see on a day to day basis the progress Culture Kings are making moving on to that test and repeat model, and how the newer product that they're bringing in is really resonating with customers, right. And, and so for us, I think, as we go into the back half of the year, we feel that should drive margin expansion and are certainly going to look to execute against that.

Ciaran Long: I think, you know, underneath that as well, we kind of see on just the day-to-day business, the progress, culture things are making moving on to that test or repeat model and how the newer product that they're bringing in is really resonating with customers, right? And so, for us, I think as we go into the back half of the year, we feel that should drive margin expansion and certainly going to look to execute against that. And, you know, I think from a growth perspective overall, we're really happy that the US has no 65% of the business, you know, growing 19% in Q2.

Ashley Owens: And, you know, from a growth perspective, overall, look, we're really happy that the US is now 65% of the business, growing 19%, you know, in Q2, so I think really great progress there, which we will continue to lean into. We do expect, you know, the comps in the back half to get worse from an Australian perspective, but really, just because we're going to be more, we've got a tougher lap and are more focused on margin expansion, and, and, you know, feel good about the guidance and that that is all contemplated in the guidance we've given for the back half.

Ashley Owens: And I think from a growth perspective overall, look, we're really happy that the US is now 65% of the business, growing 19%, you know, in Q2. So I think really great progress there, which we will continue to lean into. We do expect, you know, the comps in the back half to get worse from an Australian perspective, but really, just because we've got a tougher lap and are more focused on margin expansion and feel good about the guidance and that that is all contemplated in the guidance we've given for the back half.

Ciaran Long: So, I think really great progress there, which we continue to lean into.

Ciaran Long: We do expect, you know, the cons in the back half to get worse from an Australian perspective, but really just because we're going to be more, we've got a tougher lap and are more focused on margin expansion and, you know, feel good about the guidance and that that is all contemplated in the guidance we've given for the back half of the year.

Unknown Attendee: Okay, great.

Ciaran Long: Okay, great. And then, I guess, just to hit on the Princess Polly stores again. As we look out to next year, how aggressive do you plan or want to be in your rollout strategy for the brand? I guess just in general, too, you know, how many stores do you think you could see it growing to over time? And then with that, you know, anything on if and when we should be expecting to see some more marketing to support these new stores?

Ciaran Long: Okay, great. And then, I guess, just to hit on the Princess Polly stores again. As we look out to next year, how aggressive do you plan or want to be in your rollout strategy for the brand? I guess just in general, how many stores do you think you could see it growing to over time? And then with that, you know, anything on if and when we should be expecting to see some more marketing to support these new stores?

Ashley Owens: And then I guess just to hit on the Princess Poly Stores again, you know, as we look out to next year, how aggressive do you plan or want to be in your rollout strategy for the brand? I guess just in general too, you know, how many stories do you think you could see growing over time? And then with that, you know, anything if and when we should be expecting to see some more marketing to support these new stores?

Ciaran Long: Sure. Yeah, I think look, we feel that there's just tremendous opportunity for Princess Poly and for all the brands in the U.S. clearly on your paint and boy, you know, us being up 19% in the U.S. and such strong, you know, active customer growth of up to 12%.

Ashley Owens: Sure. Yeah, I think, look, we feel that there's just tremendous opportunity for Princess Polly and for all the brands in the U.S. Clearly underpinned by us being up 19% in the U.S. and such strong, you know, active customer growth of up to 12%. I'm really looking forward to having these five new stores open this year. I think that's somewhat the pacing we would look to going forward. We certainly want to be very selective in the store locations.

Ashley Owens: Sure. Yeah, I think, look, we feel that there's just tremendous opportunity for Princess Polly and for all the brands in the U.S., clearly underpinned by us being up 19% in the U.S. and such strong, you know, active customer growth of up to 12%. I'm really looking forward to having these five new stores open this year. I think that's somewhat the pacing we would look to going forward. We certainly want to be very selective in the store locations.

Ciaran Long: And, you know, really looking forward to having these new five new stores open this year. You know, I think that's somewhat the pacing we would look to going forward, and we certainly want to be very selective in the store locations. You know, we really need to lean into the customer data that we already have. And also talk to our customers just to make sure we're picking, you know, great locations, and that we feel we can be very successful with these stores and for Princess Polly. And, you know, that's, you know, pretty much what I think from a pacing perspective, and certainly I think, you know, huge opportunity, you know, from a direct to consumer perspective, but also just across all I suppose beyond each other opportunities.

Ashley Owens: You know, we really need to lean into the customer data that we already have and also talk to our customers just to make sure we're picking, you know, great locations that we feel we can be very successful with these stores for Princess Polly. You know, pretty much what I think from a pacing perspective. And certainly, I think you know, huge opportunity, from a direct to consumer perspective, but also just across all, I suppose, the omnichannel.

Ashley Owens: You know, we really need to lean into the customer data that we already have and also talk to our customers just to make sure we're picking, you know, great locations that we feel we can be very successful with these stores for Princess Polly. You know, pretty much what I think from a pacing perspective. And certainly, I think there is a huge opportunity from a direct-to-consumer perspective but also just across all, I suppose, the omni-channel.

Unknown Attendee: Okay, great.

Ciaran Long: Okay, great. Thanks so much.

Ashley Owens: Okay, great. Thanks so much.

Unknown Attendee: Thanks so much.

Andrea Butnello: The next question comes from Andrea, but Nello with Robate, please proceed. Hi there, thanks for taking my question.

Andrea Bonello: The next question comes from Andrea Bonello with Robody. Please proceed.

Andrea Bonello: Hi there. Thanks for taking my question. Looking ahead to upcoming elections and potential concerns around tariffs on goods from China, how will you manage rises in tariffs given that the majority of your third-party suppliers and manufacturers are based in China? Will we see this in changes in prices or shifting manufacturing to other countries?

Andrea Butnello: I was wondering, looking ahead to upcoming elections and potential concerns around terrorists on goods from China. How will you manage rises and tariffs, giving that the majority of your third party suppliers and manufacturers are based in China. Will we see this and changes in prices or shifting manufacturing to other countries?

Ciaran Long: Thank you.

Ciaran Long: Yeah, thanks, Andrea. And I think we're very focused on the strategy we have and really leaning into the opportunity we have to grow these brands in the US. And I think we've clear indication of just the opportunity we have across all of these brands and these opportunities.

Ciaran Long: Thanks, Andrea. Look, I think we're very focused on the strategy we have and really leaning into the opportunity we have to grow these brands in the U.S. And I think we have a clear indication of just the opportunity we have across all of these brands and these Omnia opportunities. You know, as it comes to our supply chain, we're certainly very focused on this. We have some actions in test at the moment, looking to diversify our supply chain. And, you know, they're progressing as we go through the quarter. And I think we can, you know, we can share more next quarter on the results of those and any changes we're making toward them.

Ciaran Long: Yeah, thanks, Andrea. And look, I think we're very focused on the strategy we have and really leaning into the opportunity we have to grow these brands in the U.S. And I think we have a clear indication of just the opportunity we have across all of these brands and these Omnia opportunities. You know, as it comes to our supply chain, we're certainly very focused on this, and we have some actions in test at the moment looking to diversify our supply chain.

Andrea Bonello: Thank you. Yes, thanks, Andrea. And look, I think we're very

Andrea Bonello: Thank you. Yeah, thanks, Andrea. And look, I think we're very good friends.

Ciaran Long: You know, as it comes to our supply chain, you know, we're certainly very focused on this. And we have some actions in test at the moment looking to diversify our supply chain. And, you know, they're progressing as we go through the quarter, and I think we can, you know, we can share more next quarter on the results of those and any changes we're making to our supply chain.

Ciaran Long: And, you know, they're progressing as we go through the quarter, and I think we can, you know, we can share more next quarter on the results of those and any changes we're making to our supply chain.

Unknown Attendee: Thank you.

Ciaran Long: Thank you. At this time, I would like to turn the call back over to Mr. Long for closing comments.

Ciaran Long: At this time, I would like to turn a call back over to Mr. Long for closing comments. Yeah, thank you all. We really appreciate your engagements with AK brands. We feel we're making great progress on executing against our strategies. And we're demonstrating the progress and we've made it at each of our brands. And also the enormous opportunities we have to scale these brands in a profitable way.

Ciaran Long: Yeah, thank you all really appreciate your engagement with AKA brands. We feel we're making great progress on executing against our strategies and really demonstrating the progress we've made at each of our brands and also the, you know, enormous opportunity we have to scale these brands in a profitable way.

Ciaran Long: Thank you for your time.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. You may now disconnect.

Unknown Attendee: This concludes today's teleconference. You may disconnect your line at this time. Thank you for your participation. You may now disconnect.

Operator: Thank you for your time. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. You may now disconnect.

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Q2 2024 AKA Brands Holding Corp Earnings Call

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