Arizona Tribune - Luvu Brands Announces First Quarter Fiscal 2026 Results and Operational Highlights

Financial Highlights

Three Months Ended September 30, 2025:

• Net revenue increased 1% to $5.84 million, compared to $5.76 million in the prior-year period.

• Gross profit rose to $1.66 million, up from $1.52 million, with gross margin improving to 28.4% from 26.3%. The majority of this improvement was driven by a reduction in unit costs from overseas vendors, as the Company successfully renegotiated sourcing contracts and diversified its supplier base to mitigate tariff exposure and secure more favorable pricing.

• Net loss narrowed to $131,000, a 38% improvement from a loss of $210,000 in Q1 FY2025.

• Adjusted EBITDA* was $82,000, compared to a loss of $4,000 in the prior-year period.

Operational Overview

During the first quarter of fiscal 2026, Luvu Brands continued to execute on its strategy of margin improvement and operational discipline. Despite macroeconomic headwinds, the Company achieved modest revenue growth and improved gross margins through tighter cost controls and refined sourcing practices.

Inventory levels increased to $3.81 million, positioning the Company to meet seasonal demand and support new product launches. Cash and cash equivalents rose to $818,000, reflecting positive operating cash flow of $80,000 for the quarter.

Navigating Tariff Uncertainty and Consumer Sentiment

Luvu Brands continues to manage the impact of fluctuating import tariffs and soft consumer demand with proactive sourcing and pricing strategies. The Company has diversified its supplier base to reduce reliance on tariff-sensitive imports and is actively negotiating with vendors to secure more favorable terms. These efforts have helped stabilize input costs and protect margins.

To offset variability in consumer spending, Luvu has sharpened its marketing focus on high-conversion channels and introduced product designs that align with evolving customer preferences. By maintaining lean operations and investing in automation, the Company is better positioned to absorb external shocks and sustain profitability.

CEO Louis Friedman commented, "We're encouraged by the margin expansion and operational progress this quarter. Our team remains focused on driving profitability and shareholder value through disciplined execution and strategic investment. By staying agile in the face of economic uncertainty, we're building resilience and preparing for long-term growth."

Strategic Initiatives

Looking ahead, the Company will prioritize initiatives that expand distribution channels, introduce new product offerings, and improve manufacturing efficiency. These efforts are designed to support long-term growth and strengthen Luvu Brands' competitive position in the lifestyle products market.

Additional Information

Visit www.luvubrands.com for updates on events, press releases, and product launches. For investor inquiries, please contact Christopher Knauf at [email protected].

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

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.

Consolidated Balance Sheets

Consolidated Statement of Cash Flow
(unaudited)

SUPPLEMENTAL FINANCIAL INFORMATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Reconciliation of Net Loss to Adjusted EBITDA income for the three months ended September 30, 2025 and 2024:

SOURCE: Luvu Brands, Inc.

View the original press release on ACCESS Newswire

Th.Gonzalez--AT