How did PMNT's revenue and expenses shift in Q3 2025?

Perfect Moment (PMNT) experienced a significant shift in its revenue and expenses during Q3 2025, primarily driven by changes in collaboration and retail revenue.

1. **Revenue Shift**:
- **Total Net Revenue**: PMNT's total net revenue decreased by 8% to $11.7 million in Q3 2025 compared to the same year-ago quarter.
- **Collaboration Revenue**: There was a notable decrease in collaboration revenue, which fell by $1.1 million. This decline was due to the conclusion of a two-year collaboration with Hugo Boss that ended in fiscal year 2024.
- **Retail Revenue**: Despite the decline in collaboration revenue, there was an increase in retail net revenue, which partially offset the decrease in collaboration revenue. PMNT attributed this growth to the launch of new products and the expansion of its retail stores.
- **E-commerce and Wholesale Revenue**: E-commerce gross revenue increased by 7% to $5.4 million, with e-commerce net revenue declining slightly by 1%. Wholesale net revenue decreased by 6% to $7.3 million, primarily due to phased deliveries to match customer demand.
2. **Expenses Shift**:
- PMNT's gross margin improved by 273 basis points to 54.8% compared to the same year-ago quarter of 52.1%. This improvement was attributed to the company's successful margin expansion initiatives, including the opening of its first U.S. distribution center in October.
- The company's focus on expanding its product offerings and enhancing its core services likely led to increased expenses in areas such as product development, sourcing, and distribution. However, the improvements in gross margin suggest that these expenses were effectively managed.
3. **Overall Financial Performance**:
- PMNT's strategic initiatives, including the launch of new products, the expansion of its retail and e-commerce presence, and the opening of new distribution centers, are likely to have had a significant impact on its revenue and expenses in Q3 2025. While the company experienced a decline in total net revenue, it also made strides in expanding its retail footprint and improving its gross margin.

In conclusion, PMNT's Q3 2025 financial performance was characterized by a decline in total net revenue due to a decrease in collaboration revenue, but this was partially offset by an increase in retail revenue and improvements in gross margin due to effective cost management and strategic initiatives.