A.K.A. Brands Q2 2025: Unpacking Contradictions on Supply Chain, Margins, and Inventory Strategy

Supply chain diversification and tariff impact, gross margin impact and expansion, inventory management and stock levels, wholesale expansion and strategy, inventory position and sourcing strategy are the key contradictions discussed in a.k.a. Brands Holding Corp.'s latest 2025Q2 earnings call.



Revenue Growth and Market Performance:
- a.k.a. Brands Corp reported net sales of $160.5 million for Q2 2025, up 9.5% on a constant currency basis compared to the same period last year.
- The growth was particularly driven by strong performance in the U.S., with sales increasing 14%, and improved margin performance in the Australian region.

Strategic Sourcing and Tariff Mitigation:
- The company implemented a 3-pronged approach to mitigate the impact of tariffs, including vendor discounts, supply chain diversification, and strategic price increases.
- The new sourcing structure and price increases are expected to offset the impact of tariffs at current levels, moving into Q4 and beyond.

Brand Expansion and Omnichannel Strategy:
- a.k.a. Brands is expanding its physical retail footprint, with Princess Polly having opened 3 stores in Q2 and plans for 8 to 10 more in 2026.
- The omnichannel strategy is enhancing brand visibility and driving meaningful customer acquisition, with store openings contributing to a 30% increase in new customers.

Operational and Gross Margin Improvements:
- Gross margin declined by 20 basis points to 57.5%, slightly ahead of expectations, primarily due to more full-price selling.
- The company managed to improve inventory levels and reduce them by 13% compared to a year ago, amid healthy inventory levels at streetwear brands and the impact of elevated tariffs.