Arizona Tribune - Luvu Brands Announces Third Quarter Fiscal 2025 Results and Strategic Growth Initiatives

Financial Highlights

Three Months Ended March 31, 2025:

• Net revenue declined 1% to $5.85 million, reflecting softened consumer sentiment.

• Gross profit totaled $1.60 million, down $36,000 year-over-year, with a gross margin of 27% compared to 28% in the prior year.

• Net loss of $88,000 represented a 6% improvement over the previous year's loss.

• Adjusted EBITDA of $116,000 declined by $35,000 compared to the prior year.

Nine Months Ended March 31, 2025:

• Net revenue held steady at $18.79 million versus $18.84 million a year ago.

• Gross profit improved to $5.1 million, with an emphasis on cost efficiencies and sourcing improvements.

• Net loss narrowed to $105,000, a significant 45% reduction compared to a loss of $191,000 last year.

• Adjusted EBITDA increased 6% to $514,000, reflecting continued operational enhancements.

During the third quarter of fiscal 2025, Luvu Brands navigated a dynamic economic landscape marked by fluctuating consumer demand and evolving import tariffs. While these external pressures impacted wholesale sales, the company continues to refine its strategies to enhance operational efficiency and drive long-term growth.

A key component of Luvu Brands' adaptability has been its focus on supply chain optimization and cost management, particularly in response to shifting import tariffs. The company has actively improved its sourcing of raw materials, leveraging relationships with vendors to reduce costs and enhance production margins. However, ongoing tariff fluctuations have created challenges in maintaining predictable pricing and securing cost-effective materials.

To mitigate these effects, Luvu Brands has diversified its supplier base, exploring alternative sourcing strategies both domestically and internationally. By identifying lower cost vendors, the company has been able to reduce reliance on tariff impacted imports. Additionally, tighter control over production expenses has helped offset revenue fluctuations, ensuring that profitability remains a core priority.

Luvu Brands continues to closely monitor trade policies, adjusting procurement strategies as needed to maintain efficiency and stability in its supply chain. By remaining agile and proactive, the company is positioning itself to minimize financial disruptions while sustaining growth in a rapidly evolving economic landscape.

Luvu Brands also made targeted investments in automation and technology to enhance productivity, reduce fulfillment costs, and streamline distribution processes. These investments, along with operational refinements, position the company to navigate shifting market conditions with greater agility.

The company's marketing strategy has also evolved, with a sharper focus on high-ROI channels. By eliminating unprofitable pay-per-click campaigns and shifting resources to platforms with stronger conversion rates, Luvu Brands has improved its marketing efficiency. At the same time, the company continues to innovate its product offerings, introducing fresh designs that align with consumer preferences and strengthen brand appeal.

Additionally, facility and equipment maintenance costs-previously a minor expense-increased in Q3 as the company invested in infrastructure improvements to support future growth. These investments ensure that Luvu Brands can maintain high production standards while expanding its distribution capabilities.

Louis Friedman, CEO of Luvu Brands, expressed confidence in the company's ability to adapt and drive long-term growth. "As market conditions evolve, we are proactively adjusting our pricing strategies while remaining committed to increasing profitability and shareholder value," Friedman stated. "With our diverse marketing channels and strong domestic manufacturing capabilities, Luvu Brands is well-positioned for continued expansion."

Looking forward, the company will prioritize strategic investments aimed at accelerating profitable growth, enhancing distribution networks, and improving operational efficiency. "Our focus remains on pursuing strategic investments, implementing new systems, and integrating advanced automation," Friedman added. "These initiatives are critical to our long-term success and will further strengthen our competitive position in the market."

As Luvu Brands continues to drive innovation, the company remains committed to expanding its reach and delivering sustainable value to shareholders.

Additional Information:

Please see www.luvubrands.com for updated events, press, and new product releases. If you would like to speak with us directly, please email [email protected] with your preferred day and time.

Forward-Looking Statements

Certain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's products in the market; the Company's success in obtaining new customers; the Company's success in product development; the Company's ability to execute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examples of forward-looking statements in this release include statements related to new products, anticipated revenue, and profitability. The Company assumes no obligation to update the cautionary information in this release.

*Use of Non-GAAP Measures - Adjusted EBITDA

Luvu Brands management evaluates and makes operating decisions using various financial metrics. In addition to the Company's GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. While Adjusted EBITDA is not a measure of performance in accordance with GAAP, management believes that this non-GAAP measure provides useful information about the Company's operating results. The table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.

As used herein, Adjusted EBITDA income represents net income (loss) before interest income, interest expense, income taxes, depreciation, amortization, and stock-based compensation expense.

About Luvu Brands

Luvu Brands, Inc. is an Atlanta, Georgia based designer, manufacturer, and marketer of a portfolio of consumer lifestyle brands, including:

The Company's brand sites include www.liberator.com, www.jaxxbeanbags.com, www.avanacomfort.com, plus other global e-commerce sites.

For more information about Luvu Brands, please visit www.luvubrands.com.

Company Contact:

Luvu Brands, Inc.
Christopher Knauf
Chief Financial Officer
770-246-6426
[email protected]

Consolidated Statements of Operations

Consolidated Balance Sheets

Consolidated Statement of Cash Flow

SUPPLEMENTAL FINANCIAL INFORMATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Reconciliation of Net Loss to Adjusted EBITDA income for the three and nine months ended March 31, 2025 and 2024:

SOURCE: Luvu Brands, Inc.

View the original press release on ACCESS Newswire

W.Morales--AT