a.k.a. Brands (AKA) - 2023 Q4 - Annual Results

Financial Performance - U.S. net sales grew approximately 12% compared to Q4 2022, marking the second consecutive quarter of growth in the largest market[1] - Full year 2023 net sales decreased 10.7% to $546.3 million, with a net loss of $(98.9) million, or $(9.24) per share[5] - Adjusted EBITDA for Q4 2023 was $1.3 million, or 0.9% of net sales, down from $6.1 million, or 4.1% of net sales in Q4 2022[5] - Net sales for Q4 2023 were $148,912 thousand, a slight decrease of 0.1% from $149,126 thousand in Q4 2022[22] - Gross profit margin decreased to 51% in Q4 2023 from 53% in Q4 2022, with gross profit of $76,456 thousand compared to $78,747 thousand[28] - The company reported a net loss of $13,883 thousand in Q4 2023, an improvement from a net loss of $173,896 thousand in Q4 2022[28] - Adjusted EBITDA for the year ended December 31, 2023, was $13,790, compared to $31,872 for 2022, reflecting a decrease of 56.7%[37] - Adjusted EBITDA margin for the year ended December 31, 2023, was 2.5%, down from 5.2% in 2022, indicating a decline in operational efficiency[37] - Net loss for the year ended December 31, 2023, was $98,886, compared to a net loss of $176,697 in 2022, showing an improvement of 44.1%[39] - Net loss per share, as adjusted, for the year ended December 31, 2023, was $(2.75), compared to $(0.53) for the year ended December 31, 2022[39] - Pro forma net sales for the year ended December 31, 2023, totaled $546,258, a decrease of 2.8% compared to $562,191 in 2022[43] Inventory and Debt Management - The company reduced year-end inventory by 28% compared to the previous year, totaling $91.0 million[3] - Debt was reduced by 35% in fiscal 2023, with a total of $93.4 million at the end of Q4 2023[3] - Total liabilities decreased to $213,103 thousand in 2023 from $262,561 thousand in 2022[24] - Cash and cash equivalents at the end of the period were $21,859 thousand, down from $46,319 thousand in the previous year[26] - Total operating expenses for 2023 were $383,689 thousand, down from $509,286 thousand in 2022[22] Customer Metrics - Active customers decreased by 2.6% to 3.7 million in Q4 2023 from 3.8 million in Q4 2022[29] - Average order value (AOV) declined by 1.3% to $76 in Q4 2023 from $77 in Q4 2022[29] Future Outlook - Princess Polly plans to open three to four new stores in the second half of 2024, including locations in Boston and San Diego[6] - Culture Kings U.S. achieved double-digit net sales growth in 2023, enhancing its market presence[6] - For fiscal 2024, the company expects net sales between $540 million and $555 million and adjusted EBITDA between $16 million and $18 million[11] - Management expects Adjusted EBITDA margin to increase over the long term as the company scales its business and achieves greater leverage in operating expenses[35] Cash Flow and Impairment - Cash flow from operations for 2023 was $33.4 million, compared to cash used in operations of $0.3 million in 2022[11] - The company experienced a significant goodwill impairment of $68,524 thousand in 2023, compared to $173,786 thousand in 2022[26] - Goodwill impairment for the year ended December 31, 2023, was $68,524, compared to $173,786 in 2022, reflecting a significant reduction in impairment charges[39] - The company generated $33,426 thousand in net cash from operating activities in 2023, a turnaround from a cash outflow of $319 thousand in 2022[26]