AKA's Revenue Declines by 14% in the Latest Quarter
Segments of revenue
AKA's total revenue for the nine months ended September 30, 2023, decreased by 14% compared to the same period in 2022. This decline was primarily driven by a reduction in net sales.
Despite the decrease in revenue, AKA demonstrated operational efficiencies in distribution, fulfillment, and outbound shipping, which contributed to a 16% decrease in selling expenses. The company's management highlighted these efficiencies as a strength in their financial performance. Additionally, AKA was able to offset some of the negative impacts on gross profit through lower inbound air freight costs.
AKA faced challenges in the form of targeted discounting in Culture Kings Australia and a higher return rate, which affected the cost of sales as a percentage of net sales. These challenges would have resulted in a decrease in gross margin if not offset by lower inbound air freight costs.
It is worth noting that AKA's gross margin remained flat for the nine months ended September 30, 2023, compared to the same period in 2022, despite the decrease in net sales. This was due to the company's ability to mitigate the impact of targeted discounting and higher return rates through lower air freight expenses.
AKA's latest quarter performance showed a decline in revenue by 14% compared to the same period last year. However, the company demonstrated strengths in operational efficiencies and cost management, which resulted in a 16% decrease in selling expenses. Challenges were faced in the form of targeted discounting and higher return rates, but these were partially offset by lower inbound air freight costs. Overall, AKA's ability to maintain a flat gross margin despite the decrease in net sales is noteworthy.