10q10k10q10k.net

What changed in A.K.A. BRANDS HOLDING CORP.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of A.K.A. BRANDS HOLDING CORP.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+324 added−318 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-06)

Top changes in A.K.A. BRANDS HOLDING CORP.'s 2025 10-K

324 paragraphs added · 318 removed · 243 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

59 edited+21 added−11 removed39 unchanged
Biggest changeSimilarly, apparel, shoes and accessories sold by us are also subject to import regulations in the United States and other countries concerning the use of wildlife products for commercial and non-commercial trade. We do not estimate any significant capital expenditures for environmental control matters either in the current fiscal year or in the near future.
Biggest changeDepartment of Commerce, and applicable customs and tariff laws in the countries in which we operate or to which we ship products. Our products are also subject to import regulations in the United States and other countries, including those enforced by the U.S. Fish and Wildlife Service, concerning the use of wildlife products for commercial and non-commercial trade.
Our test, repeat & clear merchandising strategy is only possible because the majority of our styles are exclusive styles that cannot be found elsewhere. 5 Table of Contents Customer Led Direct-to-Consumer First Brands who Efficiently Acquire Customers Through Authentic Content Our brands seek to constantly innovate their marketing strategies and reach their customers organically across all channels including social media, paid performance and innovative brand marketing strategies.
Our test, repeat & clear merchandising strategy is possible because the majority of our styles are exclusive styles that cannot be found elsewhere. 5 Table of Contents Customer Led Direct-to-Consumer First Brands who Efficiently Acquire Customers Through Authentic Content Our brands seek to constantly innovate their marketing strategies and reach their customers organically across all channels including social media, paid performance and innovative brand marketing strategies.
We further control the use of our technology and intellectual property through provisions in both our client terms of use on our website and in our vendor terms and conditions. 10 Table of Contents Government Regulation Our business is subject to a number of domestic and foreign laws and regulations that affect companies conducting business on the Internet, many of which are still evolving and could be interpreted in ways that could harm our business.
We further control the use of our technology and intellectual property through provisions in both our client terms of use on our website and in our vendor terms and conditions. 10 Table of Contents Government Regulation Our business is subject to a number of domestic and foreign laws and regulations that affect companies conducting business on the Internet and through retail stores, many of which are still evolving and could be interpreted in ways that could harm our business.
Expand our Omnichannel Reach Through Additional Stores and Wholesale Partnerships Our brands primarily operate direct-to-consumer, and we expect that they will continue to operate in that manner as we continue to grow. Based on the strong success of our omnichannel initiatives in 2024, we plan to accelerate our omnichannel expansion in 2025 to further build brand awareness.
Expand our Omnichannel Reach Through Additional Stores and Wholesale Partnerships Our brands primarily operate direct-to-consumer, and we expect that they will continue to operate in that manner as we continue to grow. Based on the strong success of our omnichannel initiatives in 2025, we plan to accelerate our omnichannel expansion in 2026 to further build brand awareness.
Culture Kings and mnml will also continue testing wholesale and marketplace opportunities in 2025 to expand their reach and attract new customers to the brand. Grow Internationally We intend to leverage the strength of our brands and our ability to connect with customers to expand into new international markets beyond our core U.S. and Australian markets.
Culture Kings and mnml will also continue testing wholesale and marketplace opportunities in 2026 to expand their reach and attract new customers to the brand. Grow Internationally We intend to leverage the strength of our brands and our ability to connect with customers to expand into new international markets beyond our core U.S. and Australian markets.
ITEM 1. BUSINESS Our Vision To be the global leader in fashion for the next generation of consumers through a portfolio of the most innovative brands. Who We Are a.k.a. Brands Holdings Corp. (“a.k.a.”) maintains a portfolio of global fashion brands, Princess Polly, Culture Kings, Petal and Pup and mnml.
ITEM 1. BUSINESS Our Vision To be the global leader in fashion for the next generation of consumers through a portfolio of the most innovative brands. Who We Are a.k.a. Brands Holding Corp. (“a.k.a.”) maintains a portfolio of global fashion brands, Princess Polly, Culture Kings, Petal & Pup and mnml.
As our brands grow and gain scale, we intend to invest in automation and process improvement within our operations to drive lower variable costs and improved profitability. 7 Table of Contents Our Industry We primarily operate in the large and growing global apparel, footwear and accessories industry.
As our brands grow and gain scale, we intend to invest in artificial intelligence, automation and process improvement within our operations to drive lower variable costs and improved profitability. 7 Table of Contents Our Industry We primarily operate in the large and growing global apparel, footwear and accessories industry.
Culture Kings offers its customers a curated assortment of 20 in-house designed brands, such as Loiter, Carre and Saint Morta, and exclusive products from over 100 leading third-party streetwear brands, including Nike, New Era, Mitchell and Ness and more.
Culture Kings offers its customers a curated assortment of in-house designed apparel brands, such as Loiter, Carre and Saint Morta, and exclusive products from over 100 leading third-party streetwear brands, including Nike, New Era, Mitchell and Ness and more.
In addition, in the U.S., content consumption studies found that 86% of Millennials use social media every day, while the use of social media by Gen Z consumers is growing at the fastest rate of any generation, with projected growth of 7.7% in 2024 alone.
In addition, in the U.S., content consumption studies found that 90% of Millennials use social media every day, while the use of social media by Gen Z consumers is growing at the fastest rate of any generation, with projected growth of 7.7% in 2024 alone.
While each of our brands celebrates its own unique culture and brand values, we collectively embrace a next-generation mindset: • We are customer-led—focusing relentlessly on delivering a high-quality customer experience; • We move fast—executing on innovative ideas swiftly; • We are data driven—using data and analytics to make smarter decisions every day; • We are growth minded—testing and learning continuously in and across our brands; • We are diverse—celebrating and expanding the diversity of our customers and teams; and • We act with integrity and practice responsible fashion—when in doubt, we resort to the high standard.
While each of our brands celebrates its own unique culture and brand values, we collectively embrace a next-generation mindset: • We are customer-led—focusing relentlessly on delivering a high-quality customer experience; • We move fast—executing on innovative ideas swiftly; • We are data driven—using data and analytics to make smarter decisions every day; • We are growth minded—testing and learning continuously in and across our brands; • We are diverse—celebrating and expanding the diversity of our customers and teams; and • We act with integrity and practice responsible fashion—when in doubt, we hold ourselves to the highest standard.
The following table presents quarterly net sales as a percentage of total annual net sales: Years Ended December 31, 2024 2023 2022 First quarter 20 % 22 % 24 % Second quarter 26 % 25 % 26 % Third quarter 26 % 26 % 25 % Fourth quarter 28 % 27 % 25 % Total 100 % 100 % 100 % Intellectual Property We primarily protect our intellectual property through the trademark, copyright and trade secret laws of Australia and the United States.
The following table presents quarterly net sales as a percentage of total annual net sales: Years Ended December 31, 2025 2024 2023 First quarter 21 % 20 % 22 % Second quarter 27 % 26 % 25 % Third quarter 25 % 26 % 26 % Fourth quarter 27 % 28 % 27 % Total 100 % 100 % 100 % Intellectual Property We primarily protect our intellectual property through the trademark, copyright and trade secret laws of Australia and the United States.
As of December 31, 2024, we had more than 1,350 full- and part-time employees. The majority of our workforce is located in Australia, with the remaining employees located throughout the United States. On a limited basis, we may use temporary personnel to supplement our workforce as business needs arise. Sustainability and Responsible Fashion a.k.a.
As of December 31, 2025, we had more than 1,650 full- and part-time employees. The majority of our workforce is located in Australia, with the remaining employees located throughout the United States. On a limited basis, we may use temporary personnel to supplement our workforce as business needs arise. Sustainability and Responsible Fashion a.k.a.
Our brands engage with customers by releasing a stream of inspiring digital content at high frequency across multiple platforms where we know our customers are. We believe our content-rich narrative and authentic brand messaging drives organic traffic to our websites, efficiently generating demand, enhancing connectivity with customers and amplifying our brand communities.
Our brands engage with customers by releasing a stream of inspiring digital content at high frequency across over 20 different platforms where we know our customers are. We believe our content-rich narrative and authentic brand messaging drives organic traffic to our websites, efficiently generating demand, enhancing connectivity with customers and amplifying our brand communities.
According to Statista, a platform specialized in market and consumer data, the U.S. online apparel, footwear and accessories market was valued at approximately $145 billion in 2024 and could surpass $219 billion by 2029. Digital-Savvy Millennial and Gen Z Consumers Seeking the Next-Generation Shopping Experience According to data from the U.S.
According to Statista, a platform specialized in market and consumer data, the U.S. online apparel, footwear and accessories market was valued at approximately $159 billion in 2025 and could surpass $219 billion by 2029. Digital-Savvy Millennial and Gen Z Consumers Seeking the Next-Generation Shopping Experience According to data from the U.S.
Though we ship our products globally, we operate primarily in two geographies: the U.S. and Australia. The U.S. has the largest apparel market of any country, which grew to $359 billion in 2024 and is expected to grow at a 2.1% compounded annual growth rate (“CAGR”) from 2024 to 2028.
Though we ship our products globally, we operate primarily in two geographies: the U.S. and Australia. The U.S. has the largest apparel market of any country, which grew to $365.7 billion in 2025 and is expected to grow at a 2.1% compounded annual growth rate (“CAGR”) from 2025 to 2028.
According to Grand View Research, a market research and consulting company, the global online apparel market was valued at approximately $660 billion in 2024, and was expected to grow at an 8.6% CAGR through 2030.
According to Grand View Research, a market research and consulting company, the global online apparel market was valued at approximately $711 billion in 2025, and was expected to grow at an 8.6% CAGR through 2030.
In addition to its powerful direct-to-consumer channels, mnml is a top-seller at Culture Kings, both online and in stores, and began testing marketplace and wholesale initiatives in 2024 to expand brand awareness.
In addition to its powerful direct-to-consumer channels, mnml is a top-seller at Culture Kings, both online and in stores, and continued testing marketplace and wholesale initiatives in 2025 to expand brand awareness.
According to Market Research Future, a global market research company, the Australian apparel market was expected to grow to over $23.0 billion in 2024 and grow at over a 3.0% CAGR through 2032. We believe the key factors driving growth within the global apparel, footwear and accessories industry include favorable demographic trends and desire for constant newness.
According to Market Research Future, a global market research company, the Australian apparel market was expected to grow to over $24.6 billion in 2025 and grow at over a 3.0% CAGR through 2035. We believe the key factors driving growth within the global apparel, footwear and accessories industry include favorable demographic trends and desire for constant newness.
What started as an online brand, Petal & Pup has experienced significant expansion, particularly in the United States, and can now be found in major U.S. retailers including Nordstrom, Target, Macy’s, Victoria’s Secret and Amazon. Culture Kings Founded in Australia in 2008, Culture Kings joined a.k.a. Brands in March 2021.
What started as an online brand, Petal & Pup has experienced significant expansion, particularly in the United States, and can now be found in major U.S. retailers including Nordstrom, Amazon, Stitch Fix and more. Culture Kings Founded in Australia in 2008, Culture Kings joined a.k.a. Brands in March 2021.
Our technology infrastructure integrates seamlessly across our organization, connecting in a way that allows constant iteration and improvement. We leverage highly customizable solutions to provide customers optimal improved experiences, while limiting the costs and time required of custom bespoke solutions.
Our technology infrastructure integrates seamlessly across our organization, connecting in a way that allows constant iteration and improvement. We leverage highly customizable solutions, including AI-assisted capabilities, to deliver improved customer experiences, while limiting the costs and time required of custom bespoke solutions.
As of December 31, 2024, we owned over 500 trademark registrations and nearly 150 Internet domain names.
As of December 31, 2025, we owned over 490 trademark registrations and nearly 150 Internet domain names.
In 2024, net sales to customers outside of the U.S. and Australia/New Zealand was $25.6 million across 183 countries and territories and represented 4% of total sales. We will continue to target markets that demonstrate strong social and digital media usage.
In 2025, net sales to customers outside of the U.S. and Australia/New Zealand was $20.3 million across 180 countries and territories and represented 3% of total sales. We will continue to target markets that demonstrate strong social and digital media usage.
Presently, 35% of Princess Polly’s product range is made from certified lower-impact materials, including organic, recycled or forest-friendly alternatives to conventional materials. Princess Polly is aiming to have 100% of its products made with lower-impact materials by 2030. To make this possible, in 2024, Princess Polly expanded its Lower Impact Hub.
Presently, 40% of Princess Polly’s product range is made from certified lower-impact materials, including organic, recycled or forest-friendly alternatives to conventional materials. Princess Polly is aiming to have 100% of its products made with lower-impact materials by 2030.
We also intend to deepen customer relationships to improve customer retention and increase wallet share. We aim to achieve this by enhancing our user experience, improving engagement, refining our customer segmentation, increasing personalization and testing third party artificial intelligence functions to improve the customer experience.
We aim to achieve this by enhancing our user experience, improving engagement, refining our customer segmentation, increasing personalization and testing third party artificial intelligence functions to improve the customer experience.
Princess Polly is aiming to be carbon neutral by 2030 and is making progress towards its 2030 target for 52% Scope 3 emissions intensity reductions, and, by mid-2024, it has achieved an intensity reduction of 16% on its base year. Competition The online and offline retail markets generally are highly competitive and rapidly evolving.
Princess Polly also achieved a 2025 CDP score of A- and is making progress towards its 2030 target for 52% Scope 3 emissions intensity reductions, and, by mid-2025, it has achieved an intensity reduction of 23% on its base year. Competition The online and offline retail markets generally are highly competitive and rapidly evolving.
As part of our long-term strategy, we have identified several markets in which we believe we can successfully introduce one or more of our brands in the future, such as expanding Princess Polly in Canada, Europe and the U.K. Additionally, we plan to enter into key markets through strategic wholesale and marketplace partnerships.
As part of our long-term strategy, we have identified several markets in which we believe we can successfully introduce one or more of our brands in the future, such as expanding Princess Polly in Canada, Europe and the U.K.
Sourcing We source our products from a network of international suppliers. Our supplier base included 315 suppliers across 31 different countries as of December 31, 2024. We have strong long-term relationships with our manufacturers, but we do not have any long-term commitments requiring us to purchase minimum volumes from any supplier or manufacturer.
Our supplier base included 465 suppliers across 18 different countries as of December 31, 2025. 8 Table of Contents We have strong long-term relationships with our manufacturers, but we do not have any long-term commitments requiring us to purchase minimum volumes from any supplier or manufacturer.
Our customers’ satisfaction with the fit, quality, affordability and exclusivity of our styles is further reflected in our sales return rates across our brands, which was well below industry average in 2024 at approximately 17.7%. Customers are proud to wear and name our brands.
Our customers’ satisfaction with the fit, quality, affordability and exclusivity of our styles is further reflected in our sales return rates across our brands, which was well below industry average in 2025 at approximately 18.3%.
For example, in 2024, Princess Polly maintained valid ethical manufacturing audits for 100% of final stage production, or tier-one production, and made progress towards auditing all production sites with a direct relationship, including packaging, branded hardware and fabric.
For example, in 2025, Princess Polly maintained valid ethical manufacturing audits for 100% of final stage production, or tier-one production, and extended this to also cover 100% of sites with a direct relationship, including packaging, branded hardware and fabric.
As an early mover in the direct-to-consumer streetwear segment, mnml has created powerful brand recognition and is an established destination for modern wardrobe staples, current trends and highly sought-after styles.
Brands in October 2021. mnml is a men’s streetwear brand that designs premier, fashion-forward apparel at accessible prices. As an early mover in the direct-to-consumer streetwear segment, mnml has created powerful brand recognition and is an established destination for modern wardrobe staples, current trends and highly sought-after styles.
Our network of third-party suppliers allows us to be capital efficient and nimble, giving us the ability to move new designs we receive from our suppliers into production and then into inventory in as few as 30 to 45 days for the majority of our inventory, as compared to up to nine months for traditional apparel brands. 8 Table of Contents We strategically establish sourcing relationships to ensure a constant supply of high-quality, low-cost inventory, with a number of our suppliers exclusively manufacturing for our brands.
Our network of third-party suppliers allows us to be capital efficient and nimble, giving us the ability to move new designs we receive from our suppliers into production and then into inventory in as few as 30 to 45 days for the majority of our inventory, as compared to up to nine months for traditional apparel brands.
Brands team has also been improved, extending e-learning to over 80 Princess Polly and Culture Kings team members. Princess Polly is the leader on ethical sourcing in our portfolio and amongst their digitally native brand peers, and we will leverage Princess Polly’s best practices and apply them to the rest of our portfolio.
Princess Polly is the leader on ethical sourcing in our portfolio and amongst their digitally native brand peers, and we will leverage Princess Polly’s best practices and apply them to the rest of our portfolio.
Culture Kings designs and creates fashion apparel styles under approximately 20 owned brands and sells hundreds of styles of third-party brands primarily in headwear and footwear to complete the streetwear outfit.
Culture Kings designs and creates fashion apparel styles under approximately 10 owned brands and sells hundreds of headwear and footwear styles of leading third-party brands, including Nike, New Era, Asics, Adidas and more, to complete the streetwear outfit.
Based on the success of Princess Polly’s and Petal and Pup’s wholesale and marketplace initiatives, Princess Polly and Petal and Pup will launch in all Nordstrom stores across the U.S. in 2025. We will also continue growing our successful marketplace and wholesale initiatives with partners such as Liverpool, Victoria’s Secret and more in 2025 for Petal and Pup.
Additionally, based on the success of Princess Polly’s and Petal & Pup’s wholesale and marketplace initiatives, Princess Polly and Petal & Pup successfully launched in all Nordstrom stores across the U.S. in 2025, and we intend to continue growing our successful marketplace and wholesale initiatives with partners such as Dillard’s, Nuuly, Stitch Fix, Nykaa, Von Maur and more in 2026 for Petal & Pup.
In 2024 as compared to 2023, we: • Increased net sales to $574.7 million from $546.3 million , representing 5% year-over-year growth • Increased U.S. net sales to $368.8 million from $315.5 million , representing 17% year-over-year growth • Expanded gross margin by 200 basis points to 57% from 55% • Reduced our net loss to $26.0 million from $98.9 million • Increased Adjusted EBITDA to $23.3 million from $13.8 million , representing 69% year-over-year growth • Attracted 4.1 million active customers, an increase of 9% from the prior year • Received approximately 7.3 million orders, an increase of 7% from the prior year Our Brands a.k.a.
In 2025 as compared to 2024, we: • Increased net sales to $600.2 million from $574.7 million , representing 4% year-over-year growth • Increased U.S. net sales to $394.3 million from $368.8 million , representing 7% year-over-year growth • Expanded gross margin by 30 basis points • Attracted 4.2 million active customers, an increase of 3% from the prior year • Received approximately 7.8 million orders, an increase of 6% from the prior year Our Brands a.k.a.
The Princess Polly Social Responsibility team, with the support of two on-ground ethical sourcing resources in China, achieved 250 site visits in India, the U.S. and China.
The Princess Polly Social Responsibility team, with the support of two on-ground ethical sourcing resources in China, achieved 360 site visits in India, Vietnam and China. The suite of tools to support factory managers and the global a.k.a.
Through these brands we reach a broad audience of next-generation consumers who seek fashion inspiration on social media and primarily shop online. Our brands are hyper-focused on the customer and serving them newness and a seamless experience throughout the entire shopping journey.
Through these brands we reach a broad audience of next-generation consumers who seek fashion inspiration on social media and primarily shop online. Our brands are customer-centric and trend-forward, with a focus on delivering fashion newness, compelling product assortments and a seamless omnichannel shopping experience.
We also intend to continue to refine our test, repeat & clear merchandising approach and convert all of Culture Kings owned-brands to this approach, which we believe will unlock revenue and gross margin growth. We believe that our brands have a significant opportunity to expand product ranges, increase average order value and broaden customer reach.
We also intend to refine our test, repeat & clear merchandising approach. We believe that our brands have a significant opportunity to expand product ranges, increase average order value and broaden customer reach. We also intend to deepen customer relationships to improve customer retention and increase wallet share.
We actively look for talented people across multiple geographies and promote a “work from anywhere” approach, which allows us to maintain a lean physical footprint and employ offices as team collaboration hubs. We continuously work to improve the team member experience to drive retention and engagement.
Attracting, motivating and retaining passionate talent at all levels is vital to continuing our success. We actively look for talented people across multiple geographies and promote a “work from anywhere” approach, which allows us to maintain a lean physical footprint and employ offices as team collaboration hubs.
For more information about laws and regulations applicable to our business, see “Risk Factors–Risks Relating to Laws and Regulation.” 11 Table of Contents
For more information about laws and regulations applicable to our business, see “Risk Factors–Risks Relating to Laws and Regulation.” Corporate Information We maintain a website located at aka-brands.com .
While our women’s brands have fully adapted the test, repeat & clear model, beginning in 2024 we began transforming the Culture Kings owned brands merchandising approach to adapt the model as well.
While our women’s brands have fully adopted the test, repeat & clear model, beginning in 2024 we began transforming the Culture Kings owned brands merchandising approach to adopt the model as well. With significant progress in 2025, this led to double digit net sales and gross profit dollar growth in Culture Kings owned brands such as Loiter.
None of our employees are represented by a labor union or covered by a collective bargaining agreement.
We continuously work to improve the team member experience to drive retention and engagement. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
According to UniformMarket, the operator of industry trade journals and news websites, the global apparel market grew to $1.8 trillion in 2024 and the global footwear market was expected to reach a value of almost $500 billion in 2024. The global apparel market is expected to grow to $2.0 trillion by 2028.
According to UniformMarket, the operator of industry trade journals and news websites, the global apparel market grew to $1.84 trillion in 2025. Total consumer spending in the apparel industry amounts to $2.4 trillion globally. Total consumer spending in the global apparel market is expected to grow to $2.88 trillion by 2029.
In 2023, Princess Polly approved near- and long-term science-based emissions reduction targets with the Science Based Targets initiative (SBTi), in line with a 1.5 degree temperature rise.
This high-velocity, low-waste strategy allows us to avoid unnecessary production. In 2023, Princess Polly approved near- and long-term science-based emissions reduction targets with the Science Based Targets initiative (SBTi), in line with a 1.5 degree temperature rise. Princess Polly met its 2025 SBTi renewable energy target, and will continue to source 100% renewable energy annually.
Although we have our own design team, a number of suppliers have the capability to produce concepts and designs with no obligation for our brands to purchase. With less seasonal demand for our products, we offer our manufacturing partners predictable and consistent growth in inventory purchases throughout the year.
We strategically establish sourcing relationships to ensure a constant supply of high-quality, low-cost inventory, with a number of our suppliers exclusively manufacturing for our brands. Although we have our own design team, a number of suppliers have the capability to produce concepts and designs with no obligation for our brands to purchase.
Our cloud-based, SaaS native strategy allows us to adopt innovative, dynamic technology and capabilities with limited upfront investment and nimbly adopt market-leading technologies as they are introduced. We consider this to be a key differentiating factor compared to traditional retail proprietary technology stacks and for which switching to a more agile cloud-based SaaS solution could be too costly and risky.
We continuously evaluate these technologies to ensure responsible use, protection of customer and company data, and alignment with our business objectives and values. We consider this to be a key differentiating factor compared to traditional retail proprietary technology stacks and for which switching to a more agile cloud-based SaaS solution could be too costly and risky.
Our culture is fast-paced, promotes accountability, empowers team members to drive the business forward daily, stresses a bias toward action and embraces the individuality of each team member. Attracting, motivating and retaining passionate talent at all levels is vital to continuing our success.
We seek out and hire team members who bring specialized, functional expertise while able to collaborate effectively across brands, functions and geographies. Our culture is fast-paced, promotes accountability, empowers team members to drive the business forward daily, stresses a bias toward action and embraces the individuality of each team member.
This approach allows us to easily test new capabilities on a limited and low-cost basis, analyze and learn from the results, and then roll out more broadly if successful. We are leveraging our technology infrastructure to accelerate our scale and growth and drive efficiencies in areas spanning marketing, merchandising, customer experience, supply chain, operations and administration.
This approach allows us to easily test new capabilities and AI use cases on a limited and low-cost basis, analyze and learn from the results, and then scale successful initiatives more broadly.
In connection with Princess Polly’s expansion in the U.S., in September of 2023, Princess Polly opened its first brick and mortar store in Century City, Los Angeles.
In connection with its U.S. expansion, Princess Polly opened its first brick-and-mortar store in September 2023 at Century City in Los Angeles. Following positive customer response, Princess Polly expanded its physical retail footprint by opening five stores across the United States in 2024 and seven additional stores in the United States and one store in Australia in 2025.
Our business model limits the planetary burden of overproduction. Our real-time, demand-driven and automated ordering system allows production to track demand as accurately as possible. This high-velocity, low-waste strategy allows us to avoid unnecessary production.
Environment We are committed to protecting the planet by addressing climate change, promoting circularity and improving the environmental impact of our packaging, business operations and factories. Our business model limits the planetary burden of overproduction. Our real-time, demand-driven and automated ordering system allows production to track demand as accurately as possible.
In addition to social media marketing, we also leverage our stores and off-site locations to host both influencer marketing events as well as marketing activations to expand brand awareness. For example, in 2024 Culture Kings held unique and exciting activations and collaborations with WWE, ComplexCon, UFC, Formula1, Summer Smash and more.
In 2025, our brands accelerated their TikTok growth strategies, including launching on TikTok Shop and leveraging TikTok Live for content creation. In addition to social media marketing, we also leverage our stores and off-site locations to host both influencer marketing events as well as marketing activations to expand brand awareness.
Brands promotes sustainable, responsible and inclusive fashion and does so by focusing on four key areas: ethical sourcing, sustainability, environment and equality & community. Ethical Sourcing We aim to promote a safe and respectful environment for workers who make our products and protect their human rights.
This certification reflects the commitment to creating lasting positive change in the fashion industry while continuing to make on-trend fashion accessible and sustainable. Ethical Sourcing We aim to promote a safe and respectful environment for workers who make our products and protect their human rights.
Culture Kings also operates nine experiential and immersive concept stores in major cities in Australia and New Zealand, and opened its first U.S. store in Las Vegas in November 2022. We believe our next-generation stores serve as a powerful customer acquisition tool, and provide customers a unique and immersive brand experience.
As of December 31, 2025, Princess Polly operated fourteen stores globally and expects to open approximately 8 to 10 additional stores in 2026. Culture Kings also operates nine experiential and immersive concept stores in major cities in Australia and New Zealand, and opened its first U.S. store in Las Vegas in November 2022.
The brand plans to open more locations across the U.S. in 2025, including an 8,000 square foot store in the SoHo neighborhood of New York City. 4 Table of Contents Petal & Pup Petal & Pup, founded in Australia in 2014 and expanded into the U.S. via its acquisition by a.k.a.
In addition, during 2025, Princess Polly launched in all Nordstrom department store locations, further expanding its physical presence and customer reach through a strategic wholesale partnership. 4 Table of Contents Petal & Pup Petal & Pup, founded in Australia in 2014 and expanded into the U.S. via its acquisition by a.k.a.
At the end of 2024, across our brands, we had partnerships in place with leading retailers such as: Nordstrom, Victoria’s Secret, Liverpool, Macys.com and Target.com.
In 2025, Petal & Pup and Princess Polly successfully launched in all Nordstrom stores across the U.S., further expanding the brands’ footprint and customer touchpoints. At the end of 2025, across our brands, we had partnerships in place with leading retailers such as: Nordstrom, Amazon, Liverpool, Nuuly, Stitch Fix and more.
Princess Polly opened its first store in Los Angeles, California, in September 2023 and based on the success of the initial store, the brand opened five more stores across the U.S. in 2024.
Princess Polly opened its first store in Los Angeles, California, in September 2023 and, following positive customer response, expanded its physical retail footprint by opening five stores across the United States in 2024 and seven additional stores in the United States and one store in Australia in 2025.
We are also subject to laws and regulations governing the accessibility of our websites, including under the Americans with Disabilities Act.
We are also subject to federal and state consumer protection laws and regulations, including those enforced by the Federal Trade Commission ("FTC"), addressing unfair and deceptive trade practices, advertising and marketing practices, electronic communications, endorsement and disclosure requirements applicable to our influencer and social media marketing practices, and laws governing the accessibility of our websites and mobile applications, including the Americans with Disabilities Act ("ADA").
These laws and regulations principally relate to the materials, proper labeling, advertising, marketing, manufacture, licensing requirements, flammability testing, safety, shipment and disposal of our products. We are also subject to laws, rules and regulations relating to the operations of our stores and warehouses. We are also subject to environmental laws, rules and regulations.
Our products are subject to regulation by governmental agencies in the United States, Australia, New Zealand, and other jurisdictions, including the Consumer Product Safety Commission ("CPSC"), relating to materials, labeling, advertising, marketing, manufacture, licensing, flammability testing, safety, shipment, and disposal.
People & Culture We promote a holistic approach to building our team and have created a culture that is inclusive, diverse and high performing. We seek out and hire team members who bring specialized, functional expertise while able to collaborate effectively across brands, functions and geographies.
With less seasonal demand for our products, we offer our manufacturing partners predictable and consistent growth in inventory purchases throughout the year. People & Culture We promote a holistic approach to building our team and have created a culture that is inclusive, diverse and high performing.
Removed
Based on the customer feedback and success of the first store, Princess Polly opened five more stores across the U.S. in 2024 in San Diego, CA; Scottsdale, AZ; Irvine, CA; Santa Clara, CA; and Boston, MA.
Added
As of December 31, 2025, Princess Polly operated fourteen stores globally and expects to open approximately 8 to 10 additional stores in 2026. A full list of Princess Polly store locations can be found here: https://us.princesspolly.com/pages/store-locator.
Removed
The in-store experience generates excitement and anticipation on social media, driving demand and traffic online and offline and creating customer affiliation with the Culture Kings brands, not just the products sold. mnml Founded in Los Angeles in 2016, mnml joined a.k.a. Brands in October 2021. mnml is a men’s streetwear brand that designs premier, fashion-forward apparel at accessible prices.
Added
In 2025, Culture Kings deepened its event-driven activation strategy with high-profile partnerships including a WWE collection launch during WrestleMania Weekend, a co-hosted Timberland performance during ComplexCon, and a Loiter x Yu-Gi-Oh capsule collection to drive brand awareness and customer engagement. mnml Founded in Los Angeles in 2016, mnml joined a.k.a.
Removed
Loiter, one of Culture Kings owned brands is the furthest along in this transition and delivered tripled digit revenue growth and gross margin dollar growth in 2024, a further testament to the strength of the test, repeat & clear model.
Added
For example, in 2025 Culture Kings held unique and exciting activations and collaborations with WWE, ComplexCon, UFC, McLaren Racing, Summer Smash, TikTok Shop, Timberland and more. Meet Our Customers Anywhere Nimble by design, our brands meet our customers with a great experience whether online or in person.
Removed
We intend to continuously test new marketing channels and may add new brands to our portfolio to stay top-of-mind, re-inventing as necessary to not age our with our customers. Meet Our Customers Anywhere Nimble by design, our brands meet our customers with a great experience whether online or in person.
Added
We believe our next-generation stores serve as a powerful customer acquisition tool, and provide customers a unique and immersive brand experience. We also continue testing wholesale and marketplace initiatives across our brands to build brand awareness and increase brand touchpoints for our customers.
Removed
In 2023, we also began piloting wholesale and marketplace initiatives across our brands to build brand awareness and increase brand touchpoints for our customers. In 2024, Petal & Pup and Princess Polly successfully launched in 42 and 20 Nordstrom stores, respectively, and on Nordstrom.com with plans to expand to all stores in 2025.
Added
In 2026, we anticipate that Princess Polly will open 8-10 stores across the U.S. and Australia.
Removed
In 2025, we anticipate that Princess Polly will open seven stores in the U.S., including the 8,000 square foot store in the SoHo neighborhood of New York City in March 2025. We also signed leases and intend to open stores in: Miami, Florida; Glendale, California; Columbus, Ohio; White Plains, New York; Garden City, New York; and King of Prussia, Pennsylvania.
Added
In 2026, we plan to open distribution for Princess Polly in the U.K. to better meet the demand and lead times for our U.K. and European customers. Additionally, we plan to enter into key markets through strategic wholesale and marketplace partnerships.
Removed
The team also hosted the inaugural Princess Polly Partner Conference for 90 partners in Guangzhou, China, which included a focus on Princess Polly’s Preferred Factory Program, a custom ethical sourcing and environment accelerator which launched in April 2024. The suite of tools to support factory managers and the global a.k.a.
Added
Our cloud-based, SaaS native strategy allows us to adopt innovative, dynamic technologies, including emerging artificial intelligence (“AI”) and machine learning capabilities with limited upfront investment. We selectively integrate AI-enabled tools to enhance decision-making, automation, personalization, and operational efficiency, while maintaining appropriate governance, security controls, and human oversight.
Removed
This fabric market makes the ‘Core 40’ lower-impact materials available to all Princess Polly suppliers, overcoming lead time and order quantity barriers while maintaining high product quality. Environment We are committed to protecting the planet by addressing climate change, promoting circularity and improving the environmental impact of our packaging, business operations and factories.
Added
We are leveraging our technology infrastructure, including AI-enabled tools, to accelerate our scale and growth and drive efficiencies in areas spanning marketing, merchandising, customer experience, supply chain, operations and administration, while ensuring that critical decisions remain subject to appropriate human review and oversight.
Removed
These laws and regulations include federal and state consumer protection laws and regulations (including the General Data Protection Regulation in the European Union), which address, among other things, the processing of payments, privacy, data protection, information security, sending of commercial email and other laws regarding unfair and deceptive trade practices.
Added
We have established an AI Governance Policy and framework that includes periodic risk assessments, defined approval processes for new AI implementations, and ongoing monitoring of AI system outputs for accuracy and potential bias. Sourcing We source our products from a network of international suppliers.
Removed
Our business is also subject to additional laws and regulations, including restrictions on imports from, exports to, and services provided to persons located in certain countries and territories, as well as foreign laws and regulations addressing topics such as advertising and marketing practices, customs duties and taxes and consumer rights, any of which might apply by virtue of our operations in foreign countries and territories or our contacts with consumers in such foreign countries and territories.
Added
Brands promotes sustainable, responsible and inclusive fashion and does so by focusing on four key areas: ethical sourcing, sustainability, environment and equality & community. Princess Polly was recognized as a business that meets high standards of social and environmental impact by achieving a B Corp certification in 2025.
Removed
In addition, apparel, shoes and accessories sold by us are also subject to regulation by governmental agencies in Australia, New Zealand and the United States, as well as various other federal, state, local and foreign regulatory authorities.

… 11 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

113 edited+40 added−35 removed394 unchanged
Biggest changeOur evaluation was based on the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control — Integrated Framework (2013). 42 Table of Contents The material weaknesses identified by management related to the following: • We had not sufficiently designed, implemented and documented internal controls at the entity level (an effective risk assessment process and control environment, specifically, a sufficient complement of personnel commensurate with our financial reporting requirements) and across key business and financial processes to allow us to achieve complete, accurate and timely financial reporting, including controls over journal entries. • We had not designed and implemented controls to maintain appropriate segregation of duties in our manual and IT-dependent business processes, including journal entries, and with respect to certain information technology general controls for information systems relevant to the preparation of our financial statements, specifically, (i) program change management controls to ensure that program and data changes are identified, tested, authorized and implemented appropriately; (ii) user access controls to adequately restrict user and privileged access to appropriate personnel; (iii) computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored; and (iv) program development controls to ensure that new software development is tested, authorized and implemented appropriately.
Biggest changeThese material weaknesses contributed to the following additional material weakness: • We did not design and maintain effective controls with respect to certain information technology general controls (“ITGCs”) for information systems relevant to the preparation of our financial statements, specifically, (i) program change management controls to ensure that program and data changes are identified, tested, authorized and implemented appropriately; (ii) user access controls to adequately restrict user and privileged access to appropriate personnel; (iii) computer operations controls to ensure that processing and transfer of data, and data backups and recovery are monitored; and (iv) program development controls to ensure that new software development is tested, authorized and implemented appropriately.
This summary should be read together with the more detailed description of each risk factor below. • Economic downturns and market conditions could materially adversely affect our business, operating results, financial condition and growth prospects; • Changes in the political and economic policies of the Chinese government or in relations between China and the United States may materially and adversely affect our business, financial condition, results of operations and the market price of our common stock; • Rapidly-changing consumer preferences in the apparel, footwear and accessories industries expose us to the risk of lost sales, harmed customer relationships and diminished brand loyalty if we are unable to anticipate such changes; • Our future revenues and operating results will be harmed if we fail to acquire new customers, retain existing customers, and maintain average order value levels; • We face risks related to our growth strategy if we are unsuccessful in identifying brands to acquire, integrate and manage on our platform; • Our business and the success of our products could be harmed if we are unable to maintain our corporate integrity or the images and reputations of our brands; • Our use of third-party suppliers and manufacturers that are primarily based in China exposes us to risks inherent in doing business there; • Changes to U.S., Australian or international trade policy, tariff or import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations. • We face risks to our operating results if we fail to manage our inventory effectively; • Increases in labor costs, including wages, and fluctuations in the price, availability and quality of raw materials and finished goods could adversely affect our business, financial condition and results of operations; • Changes in laws or regulations relating to data privacy and security that are applied adversely to us may have a material adverse effect on our reputation, results of operations, financial condition and cash flows; • Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition; and • We face risks related to our debt covenants if we fail to generate sufficient cash flow to service our debt which could arise from changes in our results of operations or general economic conditions. • If we fail to maintain compliance with the New York Stock Exchange’s (“NYSE”) continued listing standards, the NYSE may delist our common stock. 12 Table of Contents Risks Relating to Our Business and Strategy Economic downturns and market conditions beyond our control, including periods of inflation, could materially adversely affect our business, operating results, financial condition and prospects.
This summary should be read together with the more detailed description of each risk factor below. • Economic downturns and market conditions could materially adversely affect our business, operating results, financial condition and growth prospects; • Changes in the political and economic policies of the Chinese government or in relations between China and the United States may materially and adversely affect our business, financial condition, results of operations and the market price of our common stock; • Rapidly-changing consumer preferences in the apparel, footwear and accessories industries expose us to the risk of lost sales, harmed customer relationships and diminished brand loyalty if we are unable to anticipate such changes; • Our future revenues and operating results will be harmed if we fail to acquire new customers, retain existing customers, and maintain average order value levels; • We face risks related to our growth strategy if we are unsuccessful in identifying brands to acquire, integrate and manage on our platform; • Our business and the success of our products could be harmed if we are unable to maintain our corporate integrity or the images and reputations of our brands; • Our use of third-party suppliers and manufacturers that are primarily based in China exposes us to risks inherent in doing business there; • Changes to U.S., Australian or international trade policy, tariff or import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations. • We face risks to our operating results if we fail to manage our inventory effectively; • Increases in labor costs, including wages, and fluctuations in the price, availability and quality of raw materials and finished goods could adversely affect our business, financial condition and results of operations; • Changes in laws or regulations relating to data privacy and security that are applied adversely to us may have a material adverse effect on our reputation, results of operations, financial condition and cash flows; • Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition; • We face risks related to our debt covenants if we fail to generate sufficient cash flow to service our debt which could arise from changes in our results of operations or general economic conditions; and • If we fail to maintain compliance with the New York Stock Exchange’s (“NYSE”) continued listing standards, the NYSE may delist our common stock. 12 Table of Contents Risks Relating to Our Business and Strategy Economic downturns and market conditions beyond our control, including periods of inflation, could materially adversely affect our business, operating results, financial condition and prospects.
Pursuant to our certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine; provided that for the avoidance of doubt, the forum selection provision that identifies the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation, including any “derivative action”, will not apply to suits to enforce a duty or liability created by Securities Act, the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
Pursuant to our certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine; provided that for the avoidance of doubt, the forum selection provision that identifies the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation, including any “derivative action”, will not apply to suits to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
This sourcing concentration increases our dependence of these suppliers and exposes us to the risks of doing business in China, which means that our business, results of operations, financial condition and prospects may be influenced to a significant degree by economic, political, legal and social conditions in China or changes in government relations between China and the United States or other governments, including Australia.
This sourcing concentration increases our dependence on these suppliers and exposes us to the risks of doing business in China, which means that our business, results of operations, financial condition and prospects may be influenced to a significant degree by economic, political, legal and social conditions in China or changes in government relations between China and the United States or other governments, including Australia.
For example: • we may have difficulty growing our brands as demand falls in a challenging macroeconomic environment; • we may have difficulty completing acquisitions to expand our platform, and we may not be able to successfully integrate a newly acquired business or achieve the expected growth, cost savings or synergies from such integration, or it may disrupt our current business; 17 Table of Contents • we may not be able to continue to evolve to meet our customers’ changing needs and expectations, and our existing customers may reduce their purchases of our products; • we may not successfully expand our market share by winning new customers; • our brands may not be widely accepted in new countries or regions; • we may have difficulty recruiting, developing or retaining qualified employees; • we may not be able to manage our growth effectively, adapt our business model or develop relationships with customers or successfully operate our Culture Kings and Princess Polly brick-and-mortar stores, which exposes us to premises liability, such as slip and falls, and may subject us to greater potential labor union activity; • we may not be successful in opening new brick-and-mortar stores, including the additional planned Princess Polly locations in the U.S.; • we may not be successful in securing wholesale partnerships or securing favorable terms; • we may not successfully identify the correct markets in which to open retail stores for our brands; • we may not be able to scale the abilities of our supply chain operations to meet increased consumer demand, and we may not be able to offset rising materials, procurement and shipping costs with pricing actions or efficiency improvements; • any new brands we acquire might cannibalize our existing brands and cause a decrease in sales of our existing brands; and • we may not be able to complete dispositions of nonstrategic assets in the future.
For example: • we may have difficulty growing our brands as demand falls in a challenging macroeconomic environment; • we may have difficulty completing acquisitions to expand our platform, and we may not be able to successfully integrate a newly acquired business or achieve the expected growth, cost savings or synergies from such integration, or it may disrupt our current business; • we may not be able to continue to evolve to meet our customers’ changing needs and expectations, and our existing customers may reduce their purchases of our products; • we may not successfully expand our market share by winning new customers; • our brands may not be widely accepted in new countries or regions; • we may have difficulty recruiting, developing or retaining qualified employees; • we may not be able to manage our growth effectively, adapt our business model or develop relationships with customers or successfully operate our Culture Kings and Princess Polly brick-and-mortar stores, which exposes us to premises liability, such as slip and falls, and may subject us to greater potential labor union activity; • we may not be successful in opening new brick-and-mortar stores, including the additional planned Princess Polly locations in the U.S.; • we may not be successful in securing wholesale partnerships or securing favorable terms; • we may not successfully identify the correct markets in which to open retail stores for our brands; • we may not be able to scale the abilities of our supply chain operations to meet increased consumer demand, and we may not be able to offset rising materials, procurement and shipping costs with pricing actions or efficiency improvements; • any new brands we acquire might cannibalize our existing brands and cause a decrease in sales of our existing brands; and • we may not be able to complete dispositions of nonstrategic assets in the future.
There are numerous risks associated with our acquisition strategy, including: • our inability to identify appropriate candidates for acquisition; • competition for acquisition targets driving up purchase prices; • disruption of our ongoing business, including loss of management focus on existing businesses; • problems retaining key personnel; 16 Table of Contents • unanticipated operating losses and expenses of the businesses we acquire or in which we invest; • risks of losing a target company’s customer and other relationships; • the difficulty of completing acquisitions or investments and achieving anticipated benefits within expected timeframes, or at all; • the difficulty of integrating acquired brands on our platform, and unanticipated expenses related to their integration; • the difficulty of integrating another company’s accounting, financial reporting, management, information and data security, human resource and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not successfully implemented; • losses we may incur as a result of declines in the value of an acquisition or an investment or as a result of incorporating its financial performance into our financial results, and our dependence on its accounting, financial reporting, systems, controls and processes; • the risks associated with businesses we acquire or invest in, which may differ from or be more significant than the risks our existing businesses face; • potential unknown, unidentified or undisclosed liabilities or risks associated with a company we acquire or in which we invest; and • for foreign transactions, additional risks related to the integration of operations across different cultures and languages, and the economic, political and regulatory risks associated with specific countries.
There are numerous risks associated with our acquisition strategy, including: • our inability to identify appropriate candidates for acquisition; • competition for acquisition targets driving up purchase prices; • disruption of our ongoing business, including loss of management focus on existing businesses; • problems retaining key personnel; • unanticipated operating losses and expenses of the businesses we acquire or in which we invest; • risks of losing a target company’s customer and other relationships; • the difficulty of completing acquisitions or investments and achieving anticipated benefits within expected timeframes, or at all; • the difficulty of integrating acquired brands on our platform, and unanticipated expenses related to their integration; • the difficulty of integrating another company’s accounting, financial reporting, management, information and data security, human resource and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not successfully implemented; • losses we may incur as a result of declines in the value of an acquisition or an investment or as a result of incorporating its financial performance into our financial results, and our dependence on its accounting, financial reporting, systems, controls and processes; • the risks associated with businesses we acquire or invest in, which may differ from or be more significant than the risks our existing businesses face; • potential unknown, unidentified or undisclosed liabilities or risks associated with a company we acquire or in which we invest; and • for foreign transactions, additional risks related to the integration of operations across different cultures and languages, and the economic, political and regulatory risks associated with specific countries.
It is possible that we could have another impairment charge for goodwill or intangible assets in future periods if (i) overall economic conditions in fiscal 2025 or future years vary from our current assumptions (including changes in discount rates), (ii) business conditions or our strategies for a specific business unit change from our current assumptions, (iii) investors require higher rates of return on equity investments in the marketplace, or (iv) enterprise values of comparable publicly traded companies, or of actual sales transactions of comparable companies, were to decline, resulting in lower comparable multiples of revenues and earnings before interest, taxes, depreciation and amortization and, accordingly, lower implied values of goodwill and intangible assets.
It is possible that we could have another impairment charge for goodwill or intangible assets in future periods if (i) overall economic conditions in fiscal year 2026 or future years vary from our current assumptions (including changes in discount rates), (ii) business conditions or our strategies for a specific business unit change from our current assumptions, (iii) investors require higher rates of return on equity investments in the marketplace, or (iv) enterprise values of comparable publicly traded companies, or of actual sales transactions of comparable companies, were to decline, resulting in lower comparable multiples of revenues and earnings before interest, taxes, depreciation and amortization and, accordingly, lower implied values of goodwill and intangible assets.
We were in compliance with all debt covenants as of December 31, 2024, and expect to be in compliance beyond 12 months, although our ability to meet those financial ratios and tests can be affected by the interpretation of certain provisions in the financing documents, macro-economic conditions and the seasonality of our business, which is more concentrated in the third and fourth fiscal quarters.
We were in compliance with all debt covenants as of December 31, 2025, and expect to be in compliance beyond 12 months, although our ability to meet those financial ratios and tests can be affected by the interpretation of certain provisions in the financing documents, macro-economic conditions and the seasonality of our business, which is more concentrated in the third and fourth fiscal quarters.
Our distribution capacity is also dependent on the timely performance of services by third parties, including the shipping of our products to and from our California distribution facilities.
Our distribution capacity is also dependent on the timely performance of services by third parties, including the shipping of our products to and from our distribution facilities.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder and our certificate of incorporation also provides that, unless we consent in writing to the selection of an alternative forum and to the fullest extent permitted by law, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Our certificate of incorporation also provides that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. 46 Table of Contents Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder and our certificate of incorporation also provides that, unless we consent in writing to the selection of an alternative forum and to the fullest extent permitted by law, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
As previously disclosed, we have unremediated material weaknesses in the design and operation of our internal control over financial reporting in connection with the preparation of our financial statements, as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, that had not been remediated as of December 31, 2024.
As previously disclosed, we have unremediated material weaknesses in the design and operation of our internal control over financial reporting in connection with the preparation of our financial statements, as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021, that had not been remediated as of December 31, 2025.
See “—Risks Relating to Laws and Regulation—Changes in laws or regulations relating to data privacy and security, or any actual or perceived failure by us to comply with such laws and regulations, or contractual or other obligations relating to data privacy and security, could lead to government enforcement actions (which could include civil or criminal penalties), private litigation or adverse publicity and could have a material adverse effect on our reputation, results of operations, financial condition and cash flows.” 15 Table of Contents Merchandise returns could materially harm our business.
See “—Risks Relating to Laws and Regulation—Changes in laws or regulations relating to data privacy and security, or any actual or perceived failure by us to comply with such laws and regulations, or contractual or other obligations relating to data privacy and security, could lead to government enforcement actions (which could include civil or criminal penalties), private litigation or adverse publicity and could have a material adverse effect on our reputation, results of operations, financial condition and cash flows.” Merchandise returns could materially harm our business.
Our credit facility, or any future credit facility or other indebtedness we may enter into, may have important consequences, including: • limiting funds otherwise available for financing our capital expenditures by requiring us to dedicate a portion of our cash flows from operations to the repayment of debt and the interest on this debt; • limiting our ability to incur additional indebtedness; • limiting our ability to capitalize on significant business opportunities; • making us more vulnerable to rising interest rates; and 37 Table of Contents • making us more vulnerable in the event of a downturn in our business.
Our credit facility, or any future credit facility or other indebtedness we may enter into, may have important consequences, including: • limiting funds otherwise available for financing our capital expenditures by requiring us to dedicate a portion of our cash flows from operations to the repayment of debt and the interest on this debt; • limiting our ability to incur additional indebtedness; • limiting our ability to capitalize on significant business opportunities; • making us more vulnerable to rising interest rates; and • making us more vulnerable in the event of a downturn in our business.
There is significant uncertainty about the future relationship between the United States and China with respect to taxation, trade policies, treaties, government regulations, import and export tariffs, custom duties, environmental regulations, intellectual property and other matters.
There is significant uncertainty about the future relationship between the United States and China with respect to taxation, trade policies, treaties, government regulations, import and export tariffs, customs duties, environmental regulations, intellectual property and other matters.
Refer to Note 2, “Significant Accounting Policies,” in the notes to our consolidated financial statements included in this Annual Report on Form 10-K for a description of recent accounting pronouncements. Our business is subject to federal, state, local and international laws and regulations regarding consumer protection, promotions, safety and other matters.
Refer to Note 2, “Significant Accounting Policies,” in the notes to our consolidated financial statements included in this Annual Report on Form 10-K for a description of recent accounting pronouncements. 28 Table of Contents Our business is subject to federal, state, local and international laws and regulations regarding consumer protection, promotions, safety and other matters.
We may have to develop alternative systems to determine our consumers’ behavior, customize their online experience or efficiently market to them if consumers block cookies or regulations introduce additional barriers to collecting cookie data. Third parties may claim that we are infringing, misappropriating or otherwise violating their intellectual property rights or those of others.
We may have to develop alternative systems to determine our consumers’ behavior, customize their online experience or efficiently market to them if consumers block cookies or regulations introduce additional barriers to collecting cookie data. 33 Table of Contents Third parties may claim that we are infringing, misappropriating or otherwise violating their intellectual property rights or those of others.
The back-up facilities may not process effectively during time of higher traffic to our sites, may process transactions more slowly and may not support all of our sites’ functionality. 36 Table of Contents We rely on our partners who use complex custom-built proprietary software in our technology infrastructure, which they seek to continually update and improve.
The back-up facilities may not process effectively during time of higher traffic to our sites, may process transactions more slowly and may not support all of our sites’ functionality. We rely on our partners who use complex custom-built proprietary software in our technology infrastructure, which they seek to continually update and improve.
In addition, any intellectual property lawsuits in which we are involved could cost a significant amount of time and money and distract management’s attention from operating our business, which may negatively impact our business and results of operations. The success of our brands has also made us the target of counterfeiting and product imitation strategies.
In addition, any intellectual property lawsuits in which we are involved could cost a significant amount of time and money and distract management’s attention from operating our business, which may negatively impact our business and results of operations. 35 Table of Contents The success of our brands has also made us the target of counterfeiting and product imitation strategies.
Any loss or interruption to our systems or the services provided by third parties would adversely affect our business, financial condition and results of operations. 32 Table of Contents Customer growth and activity on mobile devices depends upon effective use of mobile operating systems, networks and standards that we do not control.
Any loss or interruption to our systems or the services provided by third parties would adversely affect our business, financial condition and results of operations. Customer growth and activity on mobile devices depends upon effective use of mobile operating systems, networks and standards that we do not control.
Any challenges that we encounter as we expand internationally may divert financial, operational and managerial resources from our existing operations, which could adversely impact our financial condition and results of operations. Shipping is a critical part of our business and any interruptions in, or increased costs of, shipping could materially adversely affect our operating results.
Any challenges that we encounter as we expand internationally may divert financial, operational and managerial resources from our existing operations, which could adversely impact our financial condition and results of operations. 19 Table of Contents Shipping is a critical part of our business and any interruptions in, or increased costs of, shipping could materially adversely affect our operating results.
Any court decision or settlement that prevents trademark protection of our brands, that allows a third-party to continue to sell products similar to our products, or that allows a manufacturer or distributor to continue to sell counterfeit versions of our products, could lead to intensified competition and a material reduction in our sales. 35 Table of Contents We are subject to payments-related risks.
Any court decision or settlement that prevents trademark protection of our brands, that allows a third-party to continue to sell products similar to our products, or that allows a manufacturer or distributor to continue to sell counterfeit versions of our products, could lead to intensified competition and a material reduction in our sales. We are subject to payments-related risks.
In addition, if we are unable to meet the requirements of Section 404 of SOX, we may not be able to remain listed on the NYSE. 43 Table of Contents The requirements of being a public company with common stock listed on the NYSE will continue to increase certain of our costs and require significant management focus.
In addition, if we are unable to meet the requirements of Section 404 of SOX, we may not be able to remain listed on the NYSE. The requirements of being a public company with common stock listed on the NYSE will continue to increase certain of our costs and require significant management focus.
Our ability to conduct business internationally may be adversely impacted by geopolitical (such as the Russian invasion of Ukraine, relations between China and Taiwan, trade wars, or relations between the U.S. and Mexico), economic, and public health events, the manner in which governments respond to such events, as well as the global economy.
Our ability to conduct business internationally may be adversely impacted by geopolitical (such as the Russian invasion of Ukraine, relations between China and Taiwan, or trade wars), economic, and public health events, the manner in which governments respond to such events, as well as the global economy.
Our failure to successfully respond to these risks might materially adversely affect our sales, as well as damage our reputation and brands. 19 Table of Contents Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties. We use third-party social media platforms as, among other things, marketing tools.
Our failure to successfully respond to these risks might materially adversely affect our sales, as well as damage our reputation and brands. Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties. We use third-party social media platforms as, among other things, marketing tools.
If we fail to generate repeat purchases or maintain high levels of customer engagement and average order value, our growth prospects, operating results and financial condition could be materially adversely affected. Our business depends on effective marketing and high customer traffic.
If we fail to generate repeat purchases or maintain high levels of customer engagement and average order value, our growth prospects, operating results and financial condition could be materially adversely affected. 15 Table of Contents Our business depends on effective marketing and high customer traffic.
Our business could be significantly harmed if we are not able to establish, maintain, protect and enforce our intellectual property rights. We believe our competitive position is largely attributable to the value of our trademarks, trade dress, trade names, trade secrets, copyrights and other intellectual property rights.
Our intellectual property is an essential asset of our business. Our business could be significantly harmed if we are not able to establish, maintain, protect and enforce our intellectual property rights. We believe our competitive position is largely attributable to the value of our trademarks, trade dress, trade names, trade secrets, copyrights and other intellectual property rights.
In addition, we may face difficulties in recovering any losses from our provider and any losses we recover may be lower than we initially expect. We are also reliant on the security practices of our third-party service providers, which may be outside of our direct control.
In addition, we may face difficulties in recovering any losses from our provider and any losses we recover may be lower than we initially expect. 32 Table of Contents We are also reliant on the security practices of our third-party service providers, which may be outside of our direct control.
These restrictions, along with restrictions that may be contained in agreements evidencing or governing other future indebtedness, may affect our ability to grow in accordance with our growth strategy. We may be unable to refinance our indebtedness. We may need to refinance all or a portion of our indebtedness before maturity.
These restrictions, along with restrictions that may be contained in agreements evidencing or governing other future indebtedness, may affect our ability to grow in accordance with our growth strategy. 39 Table of Contents We may be unable to refinance our indebtedness. We may need to refinance all or a portion of our indebtedness before maturity.
Our reputation could also be adversely affected by negative consumer perception of our sourcing concentration in particular countries. 21 Table of Contents Negative perceptions of our product quality, product design, product components or materials or customer service could harm our brand loyalty and the value of our business.
Our reputation could also be adversely affected by negative consumer perception of our sourcing concentration in particular countries. Negative perceptions of our product quality, product design, product components or materials or customer service could harm our brand loyalty and the value of our business.
The ability of our subsidiaries to pay dividends or make other payments or distributions to us will depend on their respective operating results and may be restricted by, among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the payment of dividends and other distributions to us), the terms of existing and future indebtedness and other agreements of our subsidiaries and the covenants of any future outstanding indebtedness we or our subsidiaries incur.
The ability of our subsidiaries to pay dividends or make other payments or distributions to us will depend on their respective operating results and may be restricted by, among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the payment of dividends and other distributions to us), the terms of existing and future indebtedness and other agreements of our subsidiaries and the covenants of any future outstanding indebtedness we or our subsidiaries incur. 47 Table of Contents ITEM 1B.
Our business is exposed to the risks of foreign currency exchange rate fluctuations. Our international businesses operate in functional currencies other than the U.S. dollar. A significant percentage of our total revenues (approximately 36% and 42% in 2024 and 2023, respectively) is derived from markets outside the U.S.
Our business is exposed to the risks of foreign currency exchange rate fluctuations. Our international businesses operate in functional currencies other than the U.S. dollar. A significant percentage of our total revenues (approximately 34% and 36% in 2025 and 2024, respectively) is derived from markets outside the U.S.
Further, we may be unable to successfully resolve these type of conflicts to our satisfaction and may be required to enter into costly license agreements, if available, pay significant royalty, settlements costs or damages or rebrand our products or be prevented from selling some of our products.
Further, we may be unable to successfully resolve these types of conflicts to our satisfaction and may be required to enter into costly license agreements, if available, pay significant royalty, settlement costs or damages or rebrand our products or be prevented from selling some of our products.
Third-party merchandise may not continue to be available in sufficient quantities to meet our customers’ demand or at all or priced appropriately for us to continue to resell, including as a result of third-party brands increasingly limiting wholesale distribution and shifting to selling directly to consumers.
Our profitability relies in part upon sales of third-party merchandise. Third-party merchandise may not continue to be available in sufficient quantities to meet our customers’ demand or at all or priced appropriately for us to continue to resell, including as a result of third-party brands increasingly limiting wholesale distribution and shifting to selling directly to consumers.
As of March 4, 2025, Summit Partners LP (“Summit”) beneficially owned approximately 56.6% of our common stock which means that, based on its percentage voting power, Summit controls the vote of all matters submitted to a vote of our Board or stockholders, which enables it to control the election of the members of the Board and all other corporate decisions.
As of March 3, 2026, Summit Partners LP (“Summit”) beneficially owned approximately 56.0% of our common stock which means that, based on its percentage voting power, Summit controls the vote of all matters submitted to a vote of our Board or stockholders, which enables it to control the election of the members of the Board and all other corporate decisions.
Among other factors, (1) a failure to sufficiently innovate or maintain effective marketing strategies and (2) U.S. and foreign laws and regulations that make it more difficult or costly to digitally market, such as the European Union General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act of 2018 (“CCPA”), may adversely impact our ability to maintain brand relevance and drive increased sales.
Among other factors, (1) a failure to sufficiently innovate or maintain effective marketing strategies and (2) U.S. and foreign laws and regulations that make it more difficult or costly to digitally market, such as the GDPR and the California Consumer Privacy Act of 2018 (“CCPA”), may adversely impact our ability to maintain brand relevance and drive increased sales.
In addition to Summit’s beneficial ownership of 56.6% of our common stock as of March 4, 2025, our certificate of incorporation and bylaws contain provisions that may make the acquisition of the Company more difficult without the approval of our board of directors.
In addition to Summit’s beneficial ownership of 56.0% of our common stock as of March 3, 2026, our certificate of incorporation and bylaws contain provisions that may make the acquisition of the Company more difficult without the approval of our board of directors.
Our success depends on our ability to acquire customers in a cost-effective manner. In order to expand our customer base, we must appeal to and acquire customers who have historically used other means of commerce in shopping for apparel and may prefer alternatives to our offerings, such as traditional brick-and-mortar retailers or the websites of our competitors.
In order to expand our customer base, we must appeal to and acquire customers who have historically used other means of commerce in shopping for apparel and may prefer alternatives to our offerings, such as traditional brick-and-mortar retailers or the websites of our competitors.
While we now collect, remit and report sales tax in all states that impose a sales tax, it is still possible that one or more jurisdictions may assert that we have liability for previous periods for which we did not collect sales, use or other similar taxes, and if such an assertion or assertions were successful it could result in substantial tax liabilities, including for past sales taxes and penalties and interest, which could materially adversely affect our business, financial condition and operating results.
It is possible that one or more jurisdictions may assert that we have liability for previous periods for which we did not collect sales, use or other similar taxes, and if such an assertion or assertions were successful it could result in tax liabilities, including for past sales taxes and penalties and interest, which could adversely affect our business, financial condition and operating results.
Risks Relating to Laws and Regulation Changes in laws or regulations relating to data privacy and security, or any actual or perceived failure by us to comply with such laws and regulations, or contractual or other obligations relating to data privacy and security, could lead to government enfo rcement actions (which could include civil or criminal penalties), private litigation or adverse publicity and could have a material adverse effect on our reputation, results of operations, financial condition and cash flows.
Any future impairment charge for goodwill or intangible assets could have a material effect on our consolidated financial position or results of operations. 26 Table of Contents Risks Relating to Laws and Regulation Changes in laws or regulations relating to data privacy and security, or any actual or perceived failure by us to comply with such laws and regulations, or contractual or other obligations relating to data privacy and security, could lead to government enfo rcement actions (which could include civil or criminal penalties), private litigation or adverse publicity and could have a material adverse effect on our reputation, results of operations, financial condition and cash flows.
These provisions: • authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting and special approval, dividend or other rights or preferences superior to the rights of the holders of common stock; • prohibit stockholder action by written consent at any time when Summit controls, in the aggregate, less than 35% in voting power of our outstanding common stock; • provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; • establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; provided, however, at any time when Summit controls, in the aggregate, at least 10% in voting power of our outstanding common stock entitled to vote generally in the election of directors, such advance notice procedure will not apply to Summit; • establish a classified board of directors, as a result of which our board of directors will be divided into three classes, with each class serving for staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual meeting; • provide that, at any time when Summit controls, in the aggregate, less than 40% in voting power of our stock entitled to vote generally in the election of directors, directors may only be removed for cause, and only by the affirmative vote of holders of at least 66 2⁄3% in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class; • prohibit stockholders from calling special meetings of stockholders; provided, however, at any time when Summit controls, in the aggregate, at least 35% in voting power of our outstanding common stock, special meetings of our stockholders shall also be called by our Board or the Chairman of our Board at the written request of Summit; and • require the approval of holders of at least 66 2/3% of the outstanding shares of our voting common stock to amend certain provisions of our certificate of incorporation and for stockholders to amend our bylaws. 45 Table of Contents Our certificate of incorporation also contains a provision that provides us with protections similar to Section 203 of the Delaware General Corporation Law (the “DGCL”), and prevents us from engaging in a business combination with a person (excluding Summit and its transferees) who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common stock, unless board or stockholder approval is obtained prior to the acquisition.
These provisions: • authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting and special approval, dividend or other rights or preferences superior to the rights of the holders of common stock; 45 Table of Contents • prohibit stockholder action by written consent at any time when Summit controls, in the aggregate, less than 35% in voting power of our outstanding common stock; • provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; • establish advance notice requirements for nominations for elections to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; provided, however, at any time when Summit controls, in the aggregate, at least 10% in voting power of our outstanding common stock entitled to vote generally in the election of directors, such advance notice procedure will not apply to Summit; • establish a classified board of directors, as a result of which our board of directors will be divided into three classes, with each class serving for staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual meeting; • provide that, at any time when Summit controls, in the aggregate, less than 40% in voting power of our stock entitled to vote generally in the election of directors, directors may only be removed for cause, and only by the affirmative vote of holders of at least 66 2⁄3% in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class; • prohibit stockholders from calling special meetings of stockholders; provided, however, at any time when Summit controls, in the aggregate, at least 35% in voting power of our outstanding common stock, special meetings of our stockholders shall also be called by our Board or the Chairman of our Board at the written request of Summit; and • require the approval of holders of at least 66 2/3% of the outstanding shares of our voting common stock to amend certain provisions of our certificate of incorporation and for stockholders to amend our bylaws.
Further, on February 1, 2025, President Trump announced a new 10% ad valorem duty on goods imported from China and on February 27, 2025, President Trump announced his plan to impose an additional incremental 10% tariff on goods imported from China.
Further, on February 1, 2025, President Trump announced a 10% ad valorem duty on goods imported from China and on February 27, 2025, President Trump announced his plan to impose an additional incremental 10% tariff on goods imported from China. Subsequently, on February 20, 2026, the U.S.
We believe there are many factors that may affect the demand for our products, including: • seasonality, including the impact of anticipated and unanticipated weather conditions; • consumer acceptance of our existing products and acceptance of our new products, including our ability to develop new products that are private label or exclusive; • consumer demand for products of our competitors; • consumer perceptions of and preferences for our products and brands, including as a result of evolving ethical or social standards; • the extent to which consumers view certain of our products as substitutes for other products we manufacture; • publicity, including social media, related to us, our products, our brands, our marketing campaigns and our influencer endorsers; • the life cycle of our products and consumer replenishment behavior; • evolving fashion and lifestyle trends, and the extent to which our products reflect these trends; • brand loyalty; and • changes in consumer confidence and buying patterns, and other factors that impact discretionary income and spending.
We believe there are many factors that may affect the demand for our products, including: • seasonality, including the impact of anticipated and unanticipated weather conditions; • consumer acceptance of our existing products and acceptance of our new products, including our ability to develop new products that are private label or exclusive; • consumer demand for products of our competitors; • consumer perceptions of and preferences for our products and brands, including as a result of evolving ethical or social standards; • the extent to which consumers view certain of our products as substitutes for other products we manufacture; • publicity, including social media, related to us, our products, our brands, our marketing campaigns and our influencer endorsers; • the life cycle of our products and consumer replenishment behavior; • evolving fashion and lifestyle trends, and the extent to which our products reflect these trends; • brand loyalty; and • changes in consumer confidence and buying patterns, and other factors that impact discretionary income and spending. 14 Table of Contents Consumer demand for our products depends in part on brand loyalty and the continued strength of our brands, which in turn depend on our ability to anticipate, understand and promptly respond to the rapidly changing preferences and fashion tastes for apparel, footwear and accessories, as well as consumer spending patterns.
If we encounter problems with our distribution and warehouse management systems, or if we are unable to secure new facilities for the expansion of our fulfillment operations, recruit qualified personnel to support any such facilities or effectively control expansion-related expenses, our ability to meet customer expectations, manage inventory and fulfillment capacity, complete sales transactions, fulfill orders in a timely manner and achieve objectives for operating efficiencies could be adversely affected, which could also harm our reputation and our relationship with our customers.
If we encounter problems with our distribution and warehouse management systems, or if we are unable to secure new facilities for the expansion of our fulfillment operations, recruit qualified personnel to support any such facilities or effectively control expansion-related expenses, our ability to meet customer expectations, manage inventory and fulfillment capacity, complete sales transactions, fulfill orders in a timely manner and achieve objectives for operating efficiencies could be adversely affected, which could also harm our reputation and our relationship with our customers. 25 Table of Contents Our brand depends in part on our ability to promote responsible fashion from an ethically- and sustainably-sourced supply chain.
In order to fund future acquisitions or investments, we expect to issue additional equity securities, spend our cash or incur debt, which may only be available on unfavorable terms, if at all. Any such financing to fund future acquisitions or investments may change our leverage profile, potentially significantly.
In order to fund future acquisitions or investments, we expect to issue additional equity securities, spend our cash or incur debt, which may only be available on unfavorable terms, if at all.
If we are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be adversely affected. If we fail to continue to develop and grow our business, our financial condition and results of operations may be materially adversely affected.
If we are unable to manage the growth of our organization effectively, our business, financial condition and operating results may be adversely affected.
In addition, because most of our U.S. and Mexico fulfilled products are distributed from two primary fulfillment centers, our operations could also be interrupted by labor difficulties or changes in the U.S. or Mexican political landscape, or by floods, fires or other natural disasters near our fulfillment centers.
In addition, because our U.S. fulfilled products are distributed from one primary fulfillment center, our operations could also be interrupted by labor difficulties or changes in the U.S. political landscape, or by floods, fires or other natural disasters near our fulfillment center.
A perception that introducing a high volume of styles and manufacturing and selling of fast fashion at scale results in lower quality or increased textile waste, or that we are not honoring our commitment to responsible fashion, could harm our reputation.
A perception that introducing a high volume of styles and manufacturing and selling of fast fashion at scale results in lower quality or increased textile waste, or that we are not honoring our commitment to responsible fashion, could harm our reputation. Further, we have in the past, and may in the future, change suppliers for our products.
If we raise additional debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions.
If we raise additional equity financing, you may experience significant dilution of your ownership interests. If we raise additional debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions.
We could remain an “emerging growth company” until 2026 or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenue exceeds $1.07 billion, (b) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (c) the date on which we have issued more than $1 billion in non-convertible debt securities during the preceding three- year period. 44 Table of Contents We are a “controlled company” within the meaning of the rules of the NYSE and, as a result, we qualify for, and intend to rely on, exemptions from certain corporate governance requirements.
We could remain an “emerging growth company” until the fiscal year ended December 31, 2026 or until the earliest of (a) the last day of the first fiscal year in which our annual gross revenue exceeds $1.07 billion, (b) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (c) the date on which we have issued more than $1 billion in non-convertible debt securities during the preceding three-year period.
Any indebtedness we may incur under our credit facility, or any other indebtedness we may incur in the future, could require us to divert funds identified for other purposes for debt service and impair our liquidity position.
We entered into a credit facility in September 2021, which we amended and restated in 2025. Any indebtedness we may incur under our credit facility, or any other indebtedness we may incur in the future, could require us to divert funds identified for other purposes for debt service and impair our liquidity position.
Our customers and employees are increasingly focused on environmental, social and governance or “sustainability” practices. We will depend significantly on building and maintaining our brand and reputation for promoting responsible fashion from an ethically- and sustainably-sourced supply chain to attract customers and employees and grow our business.
We will depend significantly on building and maintaining our brand and reputation for promoting responsible fashion from an ethically- and sustainably-sourced supply chain to attract customers and employees and grow our business.
Changes to U.S., Australian or international trade policy, tariff or import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations.
If any such climate changes were to occur, they could have an adverse effect on our financial condition and results of operations. 29 Table of Contents Changes to U.S., Australian or international trade policy, tariff or import/export regulations or our failure to comply with such regulations may have a material adverse effect on our reputation, business, financial condition and results of operations.
It may be time-consuming and expensive for us to alter our business operations in order to adapt to or comply with any such changes.
It may be time-consuming and expensive for us to alter our business operations in order to adapt to or comply with any such changes, and retaliatory actions by affected countries could further impact our business.
If we cannot meet our debt service obligations, the holders of our indebtedness may accelerate such indebtedness and, to the extent such indebtedness is secured, foreclose on our assets.
If we cannot meet our debt service obligations, the holders of our indebtedness may accelerate such indebtedness and, to the extent such indebtedness is secured, foreclose on our assets. In such an event, we may not have sufficient assets to repay all of our indebtedness.
This could have a material adverse effect on our results of operations, liquidity and financial condition. 24 Table of Contents If we experience problems with our distribution and warehouse management systems, or if we do not successfully optimize, operate and manage the expansion of the capacity of our fulfillment centers, our ability to meet customer expectations, manage inventory, complete sales transactions and achieve objectives for operating efficiencies could be adversely affected.
If we experience problems with our distribution and warehouse management systems, or if we do not successfully optimize, operate and manage the expansion of the capacity of our fulfillment centers, our ability to meet customer expectations, manage inventory, complete sales transactions and achieve objectives for operating efficiencies could be adversely affected.
Any measures we do take to prevent security breaches, whether caused by employees or third parties, have the potential to limit our ability to complete sales or ship products to our customers, harm relationships with our suppliers or restrict our ability to meet our customers’ expectations with respect to their online or retail shopping experience. 31 Table of Contents A cyber-attack or other data security incident could result in the significant and protracted disruption of our business such that: • critical business systems become inoperable or require a significant amount of time or cost to restore; • key personnel are unable to perform their duties, communicate with employees, customers or third- party partners; • it results in the loss, theft, misuse, unauthorized disclosure, or unauthorized access of customer, supplier or company information; • we are prevented from accessing information necessary to conduct our business; • we are required to make unanticipated investments in equipment, technology or security measures; • customers cannot access our eCommerce websites, and customer orders may not be received or fulfilled; • we become subject to return fraud schemes, reselling schemes and imposter sites schemes; or • we become subject to other unanticipated liabilities, costs or claims.
A cyber-attack or other data security incident could result in the significant and protracted disruption of our business such that: • critical business systems become inoperable or require a significant amount of time or cost to restore; • key personnel are unable to perform their duties, communicate with employees, customers or third- party partners; • it results in the loss, theft, misuse, unauthorized disclosure, or unauthorized access of customer, supplier or company information; • we are prevented from accessing information necessary to conduct our business; • we are required to make unanticipated investments in equipment, technology or security measures; • customers cannot access our eCommerce websites, and customer orders may not be received or fulfilled; • we become subject to return fraud schemes, reselling schemes and imposter sites schemes; or • we become subject to other unanticipated liabilities, costs or claims.
We rely heavily on information technology to enable, track and facilitate sales and inventory and manage our supply chain. We are also dependent on information technology, including the internet, for our direct-to-consumer sales, including our eCommerce operations and retail business credit card transaction authorization.
We are also dependent on information technology, including the internet, for our direct-to-consumer sales, including our eCommerce operations and retail business credit card transaction authorization.
In addition, any shares of our common stock or other equity-linked securities that we issue in connection with an acquisition or investment could constitute a material portion of our then-outstanding shares of common stock, which could adversely affect the price of our common stock and result in significant dilution to your ownership interest.
Any such financing to fund future acquisitions or investments may change our leverage profile, potentially significantly. 17 Table of Contents In addition, any shares of our common stock or other equity-linked securities that we issue in connection with an acquisition or investment could constitute a material portion of our then-outstanding shares of common stock, which could adversely affect the price of our common stock and result in significant dilution to your ownership interest.
Furthermore, an adverse outcome of a dispute may result in an injunction requiring us to cease the commercialization of our products and could require us to pay substantial monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s intellectual property rights. 33 Table of Contents Our liability insurance may not cover potential claims of this type adequately or at all.
Furthermore, an adverse outcome of a dispute may result in an injunction requiring us to cease the commercialization of our products and could require us to pay substantial monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s intellectual property rights.
We depend upon third-party suppliers and manufacturers, making us vulnerable to supply disruptions and price fluctuations. We rely on a number of third-party suppliers and manufacturers to provide our products, including one supplier that represents approximately 8% of our purchase orders.
We depend upon third-party suppliers and manufacturers, making us vulnerable to supply disruptions and price fluctuations. We rely on a number of third-party suppliers and manufacturers to provide our products.
In general, we have not historically collected state or local sales, use or other similar taxes in any jurisdictions in which we do not have a tax nexus, in reliance on court decisions or applicable exemptions that restrict or preclude the imposition of obligations to collect such taxes with respect to online sales of our products.
Wayfair, Inc. on June 21, 2018, we did not historically collect state or local sales, use or other similar taxes in jurisdictions in which we did not have a tax nexus, in reliance on court decisions or applicable exemptions that restricted or precluded the imposition of obligations to collect such taxes with respect to online sales of our products.
Any failure or perceived failure by us to comply with any applicable federal, state or foreign laws and regulations relating to data privacy and security, or even the perception that the privacy of personal information is not satisfactorily protected, could result in damage to our reputation and our relationship with our customers, as well as proceedings or litigation by governmental agencies or customers, including class action privacy litigation in certain jurisdictions, which could subject us to significant fines, sanctions, awards, penalties or judgments, any of which could result in costly investigations and litigation, civil or criminal penalties, operational changes and negative publicity that could adversely affect our reputation, as well as our results of operations and financial condition.
Such restrictions may require us to modify our data processing practices and policies, distract management or divert resources from other initiatives and projects, all of which could have a material adverse effect on our results of operations, financial condition and cash flows. 27 Table of Contents Any failure or perceived failure by us to comply with any applicable federal, state or foreign laws and regulations relating to data privacy and security, or even the perception that the privacy of personal information is not satisfactorily protected, could result in damage to our reputation and our relationship with our customers, as well as proceedings or litigation by governmental agencies or customers, including class action privacy litigation in certain jurisdictions, which could subject us to significant fines, sanctions, awards, penalties or judgments, any of which could result in costly investigations and litigation, civil or criminal penalties, operational changes and negative publicity that could adversely affect our reputation, as well as our results of operations and financial condition.
Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court.
Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.
We cannot be certain that our brand management structure will be adequate to support our operations as they expand. In order to maintain the identity of each of our brands, we utilize a decentralized brand structure which places significant control and decision-making powers in the hands of the management of each of our brands.
In order to maintain the identity of each of our brands, we utilize a decentralized brand structure which places significant control and decision-making powers in the hands of the management of each of our brands.
If we are not successful in managing our inventory or fail to execute on our strategy, we may be forced to rely on markdowns or promotional sales to dispose of the excess inventory or we may not be able to sell the inventory at all, which could have a material adverse effect on our business, financial condition and results of operations.
If we are not successful in managing our inventory or fail to execute on our strategy, we may be forced to rely on markdowns or promotional sales to dispose of the excess inventory or we may not be able to sell the inventory at all, which could have a material adverse effect on our business, financial condition and results of operations. 21 Table of Contents Certain of our key operating metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
As a result, exchange rate changes between foreign currencies and the U.S. dollar affect the amounts we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results.
As a result, exchange rate changes between foreign currencies and the U.S. dollar affect the amounts we record for our foreign assets, liabilities, revenues and expenses, and could have a negative effect on our financial results. We expect that our exposure to foreign currency exchange rate fluctuations will grow as the relative contribution of our non-U.S. operations increases.
Our suppliers may encounter problems for a variety of reasons, including adverse macroeconomic conditions, unanticipated demand from larger customers, equipment malfunction, environmental factors and public health emergencies, any of which could delay or impede their ability to meet our demand. 27 Table of Contents Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including: • interruption of supply resulting from modifications to, or discontinuation of, a supplier’s operations; • delays in product shipments resulting from errors in manufacturing, defects or reliability issues from suppliers; • inability to obtain adequate supplies in a timely manner or on commercially reasonable terms; • difficulty locating and qualifying alternative suppliers, especially with respect to our 8% supplier; • the failure of our suppliers to comply with regulatory requirements, which could result in disruption of supply or increased expenses; and • inability of suppliers to fulfill orders and meet requirements due to financial hardships.
Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including: • interruption of supply resulting from modifications to, or discontinuation of, a supplier’s operations; • delays in product shipments resulting from errors in manufacturing, defects or reliability issues from suppliers; • inability to obtain adequate supplies in a timely manner or on commercially reasonable terms; • difficulty locating and qualifying alternative suppliers; • the failure of our suppliers to comply with regulatory requirements, which could result in disruption of supply or increased expenses; and • inability of suppliers to fulfill orders and meet requirements due to financial hardships.
If we fail to predict or react appropriately to changes in consumer preferences and fashion trends or fail to adapt to shifting spending patterns or demand, consumers may consider our brands and products to be outdated or unattainable or associate our brands and products with styles that are no longer popular, which may adversely affect our overall financial performance. 14 Table of Contents If we fail to acquire new customers, or fail to do so in a cost-effective manner, we may not be able to increase net sales or maintain profitability.
If we fail to predict or react appropriately to changes in consumer preferences and fashion trends or fail to adapt to shifting spending patterns or demand, consumers may consider our brands and products to be outdated or unattainable or associate our brands and products with styles that are no longer popular, which may adversely affect our overall financial performance.
Furthermore, the third parties we rely on in China may disclose our confidential information or intellectual property to competitors or third parties, which could result in the illegal distribution and sale of counterfeit versions of our products. If any of these events occur, our business, financial condition and results of operations could be materially and adversely affected.
Furthermore, the third parties we rely on in China may disclose our confidential information or intellectual property to competitors or third parties, which could result in the illegal distribution and sale of counterfeit versions of our products.
Risks Relating to Our Intellectual Property Rights and Our Technology We rely significantly on information technology. Any inadequacy, interruption, integration failure or security failure of this technology could harm our ability to effectively operate our business. Our ability to effectively manage and operate our business depends significantly on information technology systems.
Any inadequacy, interruption, integration failure or security failure of this technology could harm our ability to effectively operate our business. Our ability to effectively manage and operate our business depends significantly on information technology systems. We rely heavily on information technology to enable, track and facilitate sales and inventory and manage our supply chain.
If we fail to effectively manage our hiring needs or successfully integrate new hires, our efficiency, ability to meet forecasts, and employee morale, productivity and retention could suffer, which may have an adverse effect on our business, financial condition and operating results. 23 Table of Contents Our decentralized brand management structure could negatively impact our business.
In addition, we may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs or successfully integrate new hires, our efficiency, ability to meet forecasts, and employee morale, productivity and retention could suffer, which may have an adverse effect on our business, financial condition and operating results.
Also, China’s Xinjiang Uyghur Autonomous Region (the “XUAR”) is the source of large amounts of textiles for the global apparel supply chain. The United States Treasury Department placed sanctions on China’s Xinjiang Production and Construction Corporation (“XPCC”) for serious human rights abuses against ethnic minorities in XUAR. Additionally, the U.S.’s Uyghur Forced Labor Prevention Act (“UFLPA”), empowers the U.S.
The United States Treasury Department placed sanctions on China’s Xinjiang Production and Construction Corporation (“XPCC”) for serious human rights abuses against ethnic minorities in XUAR. Additionally, the U.S.’s Uyghur Forced Labor Prevention Act (“UFLPA”), empowers the U.S. Customs and Border Protection Agency (the “U.S.
Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder. 46 Table of Contents Our certificate of incorporation further provides that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our certificate of incorporation described above.
Our certificate of incorporation further provides that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our certificate of incorporation described above.
In addition, we rely on data received from third parties, including third-party platforms, to track certain performance indicators.
We track certain key operating metrics using internal data analytics tools, which have certain limitations. In addition, we rely on data received from third parties, including third-party platforms, to track certain performance indicators.
If we are unable to evolve with our customers’ and employees’ expectations and standards, our brand, reputation and customer and employee retention may be negatively impacted. 25 Table of Contents Conversely, in recent years “anti-ESG” sentiment has gained momentum across the U.S., with several states and Congress having proposed or enacted “anti-ESG” policies, legislation, or initiatives or issued related legal opinions, and the Trump Administration having recently issued an executive order opposing diversity equity and inclusion (“DEI”) initiatives in the private sector.
Conversely, in recent years “anti-ESG” sentiment has gained momentum across the U.S., with several states and Congress having proposed or enacted “anti-ESG” policies, legislation, or initiatives or issued related legal opinions, and the Trump Administration having recently issued an executive order opposing diversity equity and inclusion (“DEI”) initiatives in the private sector.
We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms, or at all.
We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms, or at all. There can be no assurance that we will be able to obtain sufficient funds to enable us to repay or refinance our debt obligations on commercially reasonable terms, or at all.
China’s economy differs from the economies of developed countries in many respects, including with respect to the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources.
China’s economy differs from the economies of developed countries in many respects, including with respect to the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Further, in 2025, President Trump announced a 10% ad valorem duty on goods imported from China and incremental tariff rates on goods imported from China.
In addition, prior acquisitions, such as the Culture Kings acquisition, and future acquisitions may present challenges in implementing appropriate and effective internal controls. Any future material weaknesses in internal control over financial reporting could result in material misstatements in our financial statements.
In addition, prior acquisitions, such as the Culture Kings acquisition, and future acquisitions may present challenges in implementing appropriate and effective internal controls.
In the future, we may not be able to offset cost increases with other cost reductions or efficiencies or to pass higher costs on to our customers.
In the future, we may not be able to offset cost increases with other cost reductions or efficiencies or to pass higher costs on to our customers. This could have a material adverse effect on our results of operations, liquidity and financial condition.
Increased frequency of extreme weather could cause increased incidence of disruption to the production and distribution of our products and an adverse impact on consumer demand and spending. If any such climate changes were to occur, they could have an adverse effect on our financial condition and results of operations.
Increased frequency of extreme weather could cause increased incidence of disruption to the production and distribution of our products and an adverse impact on consumer demand and spending.

… 108 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed13 unchanged
Biggest changeFor the reporting period, no material cybersecurity incidents were identified that required disclosure. • Governance: The Board’s oversight of cybersecurity risk management is supported by the Audit Committee, which regularly interacts with the company’s ERM function and the Company’s Chief Information Security Officer. 48 Table of Contents • Artificial Intelligence (“AI”): The Company has established an AI Governance Policy and framework, overseen by the Company’s Chief Information Architect, to ensure that all AI systems utilized or developed follow our data privacy standards, safeguard sensitive information and minimize potential vulnerabilities.
Biggest changeFor the reporting period, no material cybersecurity incidents were identified that required disclosure. 48 Table of Contents • Governance: The Board’s oversight of cybersecurity risk management is supported by the Audit Committee, which regularly interacts with the company’s ERM function and the Company’s Chief Information Security Officer. • Artificial Intelligence (“AI”): The Company has established an AI Governance Policy and framework, overseen by the Company’s Chief Information Architect, to ensure that all AI systems utilized or developed follow our data privacy standards, safeguard sensitive information and minimize potential vulnerabilities.
The Company generally approaches cybersecurity threats through a cross-functional, multilayered approach, with specific the goals of: (i) identifying, preventing and mitigating cybersecurity threats to the Company; (ii) preserving the confidentiality, security and availability of the information that we collect and store to use in our business; (iii) protecting the Company’s intellectual property; (iv) maintaining the confidence of our customers, clients and business partners; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required.
The Company generally approaches cybersecurity threats through a cross-functional, multilayered approach, with the specific goals of: (i) identifying, preventing and mitigating cybersecurity threats to the Company; (ii) preserving the confidentiality, security and availability of the information that we collect and store to use in our business; (iii) protecting the Company’s intellectual property; (iv) maintaining the confidence of our customers, clients and business partners; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required.
The Company’s Chief Information Security Officer has served in various roles in information technology and information security for 26 years, including several Fortune 500 companies as a consultant specializing in risk management and security architecture, VP of Engineering for a payment solutions provider and security principal for an international telecommunications company in the Fortune 100, and has held many of the information security industry’s most advanced certifications including ISC2’s CISM (Chief Information Security Manager) and CISSP (Chief Information Security Professional), as well as an early adopter of the Cloud Security Alliance’s CCSK (Certificate of Cloud Security Knowledge).
The Company’s Chief Information Security Officer has served in various roles in information technology and information security for 27 years, including several Fortune 500 companies as a consultant specializing in risk management and security architecture, VP of Engineering for a payment solutions provider and security principal for an international telecommunications company in the Fortune 100, and has held many of the information security industry’s most advanced certifications including ISC2’s CISM (Chief Information Security Manager) and CISSP (Chief Information Security Professional), as well as an early adopter of the Cloud Security Alliance’s CCSK (Certificate of Cloud Security Knowledge).
The Company’s Chief Information Officer has served in various roles in information technology for 22 years. The Company’s Chief Information Security Officer, in coordination with Company management, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents.
The Company’s Chief Information Officer has served in various roles in information technology for 23 years. The Company’s Chief Information Security Officer, in coordination with Company management, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents.
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are reasonably likely to affect the Company, including its business strategy, results of operations, or financial condition.
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are reasonably likely to affect the Company, including its business strategy, results of operations, or financial condition. 49 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changePrincess Polly leases and operates six physical retail stores in the United States, with lease terms expiring from August 2028 to January 2035. 49 Table of Contents
Biggest changePrincess Polly leases and operates thirteen physical retail stores in the United States and one in Australia, with lease terms expiring from January 2023 to January 2038.
Culture Kings leases and operates eight physical retail stores in Australia, one in New Zealand and one in the United States. The ten retail stores have lease terms expiring from June 2025 to January 2033.
Culture Kings leases and operates eight physical retail stores in Australia, one in New Zealand and one in the United States. The ten retail stores have lease terms expiring from January 2026 to December 2035.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+1 added−0 removed3 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS In April 2024, we received a cease and desist letter alleging copyright infringement and related claims. This matter has not proceeded to litigation as of the date hereof, and we have accrued $2.0 million to general and administrative expenses for current estimated losses in connection with these claims.
Biggest changeITEM 3. LEGAL PROCEEDINGS In April 2024, we received a cease and desist letter alleging copyright infringement and related claims.
The accrual for estimated losses is based on currently available information and may change as new information becomes available or circumstances change. In addition, we are subject to legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties.
As part of the final settlement agreement, the Company paid $1.1 million and subsequently released the remaining $0.9 million previously accrued for this matter. In addition, we are subject to legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties.
Added
On July 23, 2025, we entered into a final settlement agreement for this matter, wherein we agreed to pay, or have our insurers pay to the claimant on our behalf, a total of $16.5 million to the claimant in settlement costs.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 50 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 51 Item 6. [Reserved] 52 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 70 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 50 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 51 Item 6. [Reserved] 52 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 69 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+1 added−0 removed11 unchanged
Biggest changeAll repurchased shares under the Share Repurchase Program will be retired. 51 Table of Contents The following table sets forth our share repurchase activity, on a settlement date basis, for the three months ended December 31, 2024: Period Total Number of Shares Purchased 1 Average Price Paid per Share Total number of shares purchased as part of a publicly announced plan or program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (millions) 2 October 1, 2024 - October 31, 2024 9,401 $ 23.04 4,578 $ 1.5 November 1, 2024 - November 30, 2024 9,239 22.88 2,485 1.4 December 1, 2024 - December 31, 2024 5,789 20.67 3,976 1.3 Total 24,429 11,039 1 13,390 of these shares represent shares of common stock surrendered by certain of our employees to satisfy their statutory minimum U.S. federal and state tax obligations associated with the vesting of restricted shares of common stock issued under the 2021 Omnibus Incentive Plan.
Biggest changeThis was a one-time transaction authorized by the board of directors that was not conducted pursuant to the Company’s Share Repurchase Program. 51 Table of Contents The following table sets forth our share repurchase activity, on a settlement date basis, for the three months ended December 31, 2025: Period Total Number of Shares Purchased 1 Average Price Paid per Share Total number of shares purchased as part of a publicly announced plan or program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (millions) 2 October 1, 2025 - October 31, 2025 10,023 $ 10.07 — $ 1.0 November 1, 2025 - November 30, 2025 5,805 12.59 — 1.0 December 1, 2025 - December 31, 2025 238 11.07 — 1.0 Total 16,066 — 1 16,066 of these shares represent shares of common stock surrendered by certain of our employees to satisfy their statutory minimum U.S. federal and state tax obligations associated with the vesting of restricted shares of common stock issued under the 2021 Omnibus Incentive Plan.
Stockholders of Record American Stock Transfer & Trust Company, LLC is the transfer agent and registrar for our common stock. As of March 4, 2025, there were 12 stockholders of record of our common stock.
Stockholders of Record American Stock Transfer & Trust Company, LLC is the transfer agent and registrar for our common stock. As of March 3, 2026, there were 11 stockholders of record of our common stock.
Added
All repurchased shares under the Share Repurchase Program will be retired. In July 2025 the Company repurchased 159,201 shares of its common stock from a former employee for cash and other consideration totaling $1.6 million, at an average price of $10.10 per share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

59 edited+18 added−29 removed67 unchanged
Biggest changeAdjusted EBITDA has other limitations as an analytical tool when compared to the use of net income (loss), which is the most directly comparable GAAP financial measure, including that Adjusted EBITDA does not reflect: • the interest or other expense we incur; • the provision for or benefit from income tax; • any attribution of costs to our operations related to our investments and capital expenditures through depreciation and amortization charges; • any transaction or debt extinguishment costs; • any costs to establish or relocate distribution centers; • any costs related to severance from headcount reductions; • any impairment of goodwill or intangible assets; • any costs related to sales tax penalties; • any insured losses, net of recoveries; • any non-routine legal matters; • any amortization expense associated with fair value adjustments from purchase price accounting, including intangibles or inventory step-up; and • the cost of compensation we provide to our employees in the form of equity awards. 55 Table of Contents The following table reflects a reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA margin to net loss margin, the most directly comparable financial measures prepared in accordance with GAAP: Year Ended December 31, (dollars in thousands) 2024 2023 2022 Net loss $ (25,990) $ (98,886) $ (176,697) Add (deduct): Total other expense, net 11,340 13,556 8,575 Provision for (benefit from) income tax 4,329 1,921 (3,917) Depreciation and amortization expense 17,597 19,141 20,348 Equity-based compensation expense 7,980 7,640 6,730 Inventory step-up amortization expense — — 707 Distribution center relocation costs 2,101 — 1,302 Transaction costs — — 140 Goodwill impairment — 68,524 173,786 Non-routine legal matters 1 4,498 396 — Non-routine items 2 1,454 1,498 898 Adjusted EBITDA $ 23,309 $ 13,790 $ 31,872 Net loss margin (5 %) (18 %) (29 %) Adjusted EBITDA margin 4 % 3 % 5 % 1 Non-routine legal matters include a $2.0 million accrual in 2024 in connection with the legal matter described in Part I, Item 3, “Legal Proceedings” of this Annual Report on Form 10-K. 2 Non-routine items include severance from headcount reductions; sales tax penalties; and insured losses, net of recoveries.
Biggest changeAdjusted EBITDA has other limitations as an analytical tool when compared to the use of net income (loss), which is the most directly comparable GAAP financial measure, including that Adjusted EBITDA does not reflect: • the interest or other expense we incur; • the provision for or benefit from income tax; • any attribution of costs to our operations related to our investments and capital expenditures through depreciation and amortization charges; • any transaction or debt extinguishment costs; • any costs to establish or relocate distribution centers; • any costs related to severance from headcount reductions; • any impairment of goodwill or intangible assets; • any costs related to sales tax penalties; • any insured losses, net of recoveries; • any non-routine legal matters; • any amortization expense associated with fair value adjustments from purchase price accounting, including intangibles or inventory step-up; and • the cost of compensation we provide to our employees in the form of equity awards. 55 Table of Contents The following table reflects a reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA margin to net loss margin, the most directly comparable financial measures prepared in accordance with GAAP: Year Ended December 31, (dollars in thousands) 2025 2024 2023 Net loss $ (31,434) $ (25,990) $ (98,886) Add (deduct): Total other expense, net 11,266 11,340 13,556 Provision for income tax 2,119 4,329 1,921 Depreciation and amortization expense 17,758 17,597 19,141 Equity-based compensation expense 7,049 7,980 7,640 Distribution center relocation costs 4,632 2,101 — Goodwill impairment — — 68,524 Non-routine legal matters 6,647 4,498 396 Non-routine items 1 1,684 1,454 1,498 Adjusted EBITDA $ 19,721 $ 23,309 $ 13,790 Net loss margin (5) % (5) % (18) % Adjusted EBITDA margin 3 % 4 % 3 % 1 Non-routine items include severance from headcount reductions; one time supply chain sourcing costs and sales tax penalties.
See “Non-GAAP Financial Measures” below for information regarding our use of Adjusted EBITDA, Adjusted EBITDA margin and Free Cash Flow and their reconciliation to net income (loss), net income (loss) margin and net cash provided by (used in) operating activities, respectively. 54 Table of Contents Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we monitor the following supplemental non-GAAP financial measures to evaluate our operating performance, identify trends, formulate financial projections and make strategic decisions on a consolidated basis.
See “Non-GAAP Financial Measures” below for information regarding our use of Adjusted EBITDA, Adjusted EBITDA margin and Free Cash Flow and their reconciliation to net income (loss), net income (loss) margin and net cash provided by operating activities, respectively. 54 Table of Contents Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we monitor the following supplemental non-GAAP financial measures to evaluate our operating performance, identify trends, formulate financial projections and make strategic decisions on a consolidated basis.
In order to provide a framework for assessing the performance of our underlying business, excluding the effects of foreign currency rate fluctuations, we compare the percent change in the results from one period to another period in this Annual Report on Form 10-K using a constant currency methodology wherein current and comparative prior period results for our operations reporting in currencies other than U.S. dollars are converted into U.S. dollars at constant exchange rates (i.e., the rates in effect on December 31, 2023 , which was the last day of our prior fiscal year) rather than the actual exchange rates in effect during the respective periods.
In order to provide a framework for assessing the performance of our underlying business, excluding the effects of foreign currency rate fluctuations, we compare the percent change in the results from one period to another period in this Annual Report on Form 10-K using a constant currency methodology wherein current and comparative prior period results for our operations reporting in currencies other than U.S. dollars are converted into U.S. dollars at constant exchange rates (i.e., the rates in effect on December 31, 2024 , which was the last day of our prior fiscal year) rather than the actual exchange rates in effect during the respective periods.
Gross Profit Years Ended December 31, 2024 2023 Gross profit $ 327,505 $ 300,280 Gross margin 57 % 55 % Gross profit increased by $27.2 million, or 9%, in 2024 compared to 2023. This increase was primarily driven by the 5% increase in net sales in 2024, as compared to 2023, and an increase in gross margin.
Gross Profit Years Ended December 31, 2024 2023 Gross profit $ 327,505 $ 300,280 Gross margin 57.0 % 55.0 % Gross profit increased by $27.2 million, or 9%, in 2024 compared to 2023. This increase was primarily driven by the 5% increase in net sales in 2024, as compared to 2023, and an increase in gross margin.
This was primarily attributable to the combined $50.7 million in principal payments, net of borrowings, on our senior secured credit facility in 2023 and the $17.9 million in borrowings, net of repayments, under our senior secured credit facility in 2024.
This increase was primarily attributable to the combined $50.7 million in principal payments, net of borrowings, on our senior secured credit facility in 2023 and the $17.9 million in borrowings, net of repayments, under our senior secured credit facility in 2024 .
Macroeconomic factors that could cause significant negative impacts on our results of operations include, but are not limited to: inflationary pressures on consumers globally and on our supply chain; elevated interest rates; employment rates; business conditions; changes in the housing market; changes in stock markets; adverse developments affecting the financial services industry; the availability of credit, both for us and for our customers; foreign currency exchange rates; fuel, energy and raw materials costs; supply chain challenges; wars and geopolitical tensions; and the effects of tariffs.
Macroeconomic factors that could cause significant negative impacts on our results of operations include, but are not limited to: inflationary pressures on consumers globally and on our supply chain; elevated interest rates; employment rates; business conditions; changes in the housing market; changes in stock markets; adverse developments affecting the financial services industry; the availability of credit, both for us and for our customers; foreign currency exchange rates; fuel, energy and raw materials costs; supply chain challenges; wars and geopolitical tensions; and the effects of tariffs and other trade policies.
Our estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. 68 Table of Contents In August 2023, due to elevated interest rates and unfavorable demand in Australia, we reduced our forecasts and expectations for the Culture Kings and Petal & Pup reporting units.
Our estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. In August 2023, due to elevated interest rates and unfavorable demand in Australia, we reduced our forecasts and expectations for the Culture Kings and Petal & Pup reporting units.
As of December 31, 2024, most of our cash was held for working capital purposes. We have historically financed our operations and capital expenditures primarily through cash flows generated by operations, the incurrence of debt and through the issuance of equity.
As of December 31, 2025, most of our cash was held for working capital purposes. We have historically financed our operations and capital expenditures primarily through cash flows generated by operations, the incurrence of debt and through the issuance of equity.
Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We have not made any material changes to our assumptions and estimates related to our income tax positions during the year ended December 31, 2024. 69 Table of Contents
Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We have not made any material changes to our assumptions and estimates related to our income tax positions during the year ended December 31, 2025. 68 Table of Contents
The following table sets forth our key operating metrics for each period presented: Year Ended December 31, (in millions, other than dollar figures) 2024 2023 2022 Active customers 4.07 3.72 3.78 Average order value $ 79 $ 80 $ 82 Number of orders 7.32 6.85 7.42 53 Table of Contents Active Customers We view the number of active customers as a key indicator of our growth, our value proposition, consumer awareness of our brand, and our customer’s desire to purchase our products.
The following table sets forth our key operating metrics for each period presented: Year Ended December 31, (in millions, other than dollar figures) 2025 2024 2023 Active customers 4.18 4.07 3.72 Average order value $ 77 $ 79 $ 80 Number of orders 7.77 7.32 6.85 53 Table of Contents Active Customers We view the number of active customers as a key indicator of our growth, our value proposition, consumer awareness of our brand, and our customer’s desire to purchase our products.
We have not made any material changes to our assumptions included in the calculations of the lower of cost or net realizable value reserves during the year ended December 31, 2024. 67 Table of Contents Goodwill and Impairment of Intangible Assets Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets.
We have not made any material changes to our assumptions included in the calculations of the lower of cost or net realizable value reserves during the year ended December 31, 2025. Goodwill and Impairment of Intangible Assets Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets.
We have lease arrangements for certain equipment and facilities, primarily office locations, warehouse facilities and retail stores. Most of our property, equipment and software have been purchased with cash. As of December 31, 2024, our future minimum payments under non-cancelable operating leases totaled $92.9 million, with $13.2 million payable within the next 12 months.
We have lease arrangements for certain equipment and facilities, primarily office locations, warehouse facilities and retail stores. Most of our property, equipment and software have been purchased with cash. As of December 31, 2025, our future minimum payments under non-cancelable operating leases totaled $129.9 million, with $18.2 million payable within the next 12 months.
Refer to Note 7, “Debt,” in the notes to our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding our senior secured credit facility. Material Cash Requirements Our material cash requirements include operating lease obligations and inventory purchase commitments.
Refer to Note 7, “Debt,” in the notes to our consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding the Amended and Restated Credit Agreement. Material Cash Requirements Our material cash requirements include operating lease obligations and inventory purchase commitments.
While we routinely contract for the purchase of inventory from vendors, we have no material purchase obligations outstanding with any vendors or third parties. 65 Table of Contents Additionally, we plan to incur capital expenditures of approximately $12.0 to $14.0 million in 2025. This reflects the planned opening of 6-8 new stores, as well as investments in infrastructure and technology.
While we routinely contract for the purchase of inventory from vendors, we have no material purchase obligations outstanding with any vendors or third parties. Additionally, we plan to incur capital expenditures of approximately $14.0 to $16.0 million in 2026. This reflects the planned opening of 8-10 new stores, as well as investments in infrastructure and technology.
The following table presents a reconciliation of Free Cash Flow to net cash provided by (used in) operating activities, the most directly comparable financial measure prepared in accordance with GAAP: Year Ended December 31, (dollars in thousands) 2024 2023 2022 Net cash provided by (used in) operating activities $ 669 $ 33,426 $ (319) Less: purchases of property and equipment (11,592) (5,970) (19,746) Free Cash Flow $ (10,923) $ 27,456 $ (20,065) Our Free Cash Flow has fluctuated over time primarily as a result of timing of inventory purchases, purchases of property and equipment and fluctuations in earnings.
The following table presents a reconciliation of Free Cash Flow to net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP: Year Ended December 31, (dollars in thousands) 2025 2024 2023 Net cash provided by operating activities $ 16,436 $ 669 $ 33,426 Less: purchases of property and equipment (17,069) (11,592) (5,970) Free Cash Flow $ (633) $ (10,923) $ 27,456 Our Free Cash Flow has fluctuated over time primarily as a result of timing of inventory purchases, purchases of property and equipment and fluctuations in earnings.
This increase was driven by the 5% increase in net sales, as well as the opening of additional stores and the impact from growing marketplace initiatives in 2024 compared to 2023.
This increase was driven by the 5% increase in net sales, as well as the opening of additional stores and the impact from growing marketplace initiatives in 2024 compared to 2023. The increase in selling expenses as a percentage of net sales was primarily due to the opening of additional stores and the impact from growing marketplace initiatives.
Historical Cash Flows Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 669 $ 33,426 $ (319) Net cash used in investing activities (11,594) (6,031) (25,314) Net cash provided by (used in) financing activities 15,506 (52,829) 33,260 Net Cash Provided by (Used in) Operating Activities Cash provided by (used in) operating activities consists primarily of net income (loss) adjusted for certain non-cash items, including depreciation, amortization, equity-based compensation, the effect of changes in working capital and other activities.
Historical Cash Flows Year Ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 16,436 $ 669 $ 33,426 Net cash used in investing activities (17,069) (11,594) (6,031) Net cash (used in) provided by financing activities (4,433) 15,506 (52,829) Net Cash Provided by Operating Activities Cash provided by operating activities consists primarily of net income (loss) adjusted for certain non-cash items, including depreciation, amortization, equity-based compensation, the effect of changes in working capital and other activities.
Marketing expenses as a percentage of net sales for 2024 was flat compared to 2023. General and Administrative Expenses Years Ended December 31, 2024 2023 General and administrative $ 101,264 $ 96,951 Percent of net sales 18 % 18 % General and administrative expenses increased by $4.3 million, or 4%, in 2024 compared to 2023.
General and Administrative Expenses Years Ended December 31, 2024 2023 General and administrative $ 101,264 $ 96,951 Percent of net sales 18 % 18 % General and administrative expenses increased by $4.3 million, or 4%, in 2024 compared to 2023.
We were in compliance with all debt covenants as of December 31, 2024, and expect to be in compliance beyond the next 12 months, although our ability to meet these financial ratios and tests can be affected by the interpretation of certain provisions in our Credit Agreement, macro economic factors and the seasonality of our business, which is more concentrated in the third and fourth fiscal quarters .
We were in compliance with all debt covenants as of December 31, 2025 , and expect to be in compliance beyond the next 12 months, although our ability to meet these financial ratios and tests can be affected by the interpretation of certain provisions in our Amended and Restated Credit Agreement, macro-economic factors and the seasonality of our business.
This was attributable primarily to more cash used to purchase inventory in 2024 and additional capital expenditures related to new stores, as compared to 2023, to support growth in the U.S., partially offset by the timing of payments. 56 Table of Contents Factors Affecting Our Performance Macroeconomic Environment The macroeconomic environment in which we operate impacts consumer behavior and may have a significant impact on our business.
This was attributable primarily to more sell through of inventory in 2025, as compared to 2024, as well as an increase in lease incentive payments received, partially offset by additional capital expenditures related to new stores, to support growth in the U.S. and Australia. 56 Table of Contents Factors Affecting Our Performance Macroeconomic Environment The macroeconomic environment in which we operate impacts consumer behavior and may have a significant impact on our business.
All repurchased shares under the Share Repurchase Program will be retired. During the year ended December 31, 2024, we repurchased 131,618 shares of our common stock under the Share Repurchase Program for $1.5 million, at an average price of $11.53 per share. Critical Accounting Estimates We believe that the following accounting estimates involve a high degree of judgment and complexity.
All repurchased shares under the Share Repurchase Program will be retired. During the year ended December 31, 2025, we repurchased 28,005 shares of our common stock under the Share Repurchase Program for $0.4 million, at an average price of $13.14 per share. Critical Accounting Estimates We believe that the following accounting estimates involve a high degree of judgment and complexity.
For the year ended December 31, 2024 , net cash provided by operating activities decreased by $32.8 million compared to net cash provided by operating activities for the year ended December 31, 2023 .
For the year ended December 31, 2025 , net cash provided by operating activities increased by $15.8 million compared to net cash provided by operating activities for the year ended December 31, 2024 .
Subsequently, in 2023, our board of directors approved an additional repurchase capacity under the Share Repurchase Program of $3.0 million of shares of our common stock.
Share Repurchase Program On May 25, 2023, our board of directors approved the Share Repurchase Program, authorizing us to repurchase up to $2.0 million of shares of our common stock. Subsequently, in 2023, our board of directors approved an additional repurchase capacity under the Share Repurchase Program of $3.0 million of shares of our common stock.
Key Financial Metrics The following table sets forth our key financial metrics prepared in accordance with GAAP and certain non-GAAP financial metrics for each period presented: Year Ended December 31, (dollars in thousands) 2024 2023 2022 Gross margin 57 % 55 % 55% Net loss $ (25,990) $ (98,886) $ (176,697) Net loss margin (5 %) (18 %) (29%) Adjusted EBITDA $ 23,309 $ 13,790 $ 31,872 Adjusted EBITDA margin 4 % 3 % 5 % Net cash provided by (used in) operating activities $ 669 $ 33,426 $ (319) Free Cash Flow $ (10,923) $ 27,456 $ (20,065) Adjusted EBITDA, Adjusted EBITDA margin and Free Cash Flow are non-GAAP measures.
Key Financial Metrics The following table sets forth our key financial metrics prepared in accordance with GAAP and certain non-GAAP financial metrics for each period presented: Year Ended December 31, (dollars in thousands) 2025 2024 2023 Gross margin 57 % 57 % 55% Net loss $ (31,434) $ (25,990) $ (98,886) Net loss margin (5 %) (5 %) (18%) Adjusted EBITDA $ 19,721 $ 23,309 $ 13,790 Adjusted EBITDA margin 3 % 4 % 3 % Net cash provided by operating activities $ 16,436 $ 669 $ 33,426 Free Cash Flow $ (633) $ (10,923) $ 27,456 Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), Adjusted EBITDA margin and Free Cash Flow are non-GAAP measures.
Other Expense, net Years Ended December 31, 2024 2023 Other expense, net: Interest expense $ (10,296) $ (11,165) Other expense (1,044) (2,391) Total other expense, net $ (11,340) $ (13,556) Percent of net sales (2 %) (2 %) Other expense, net decreased by $2.2 million, or 16%, in 2024 compared to 2023, primarily due to lower interest expense from a reduction in our long-term balance, the impact of changes in foreign currency exchange rates and the loss recognized on the sale of the Rebdolls reporting unit in 2023. 61 Table of Contents Provision for Income Tax Years Ended December 31, 2024 2023 Provision for income tax $ (4,329) $ (1,921) Percent of net sales (1 %) — % Effective tax rate (20 %) (2 %) Provision for income tax increased by $2.4 million, or 125%, in 2024 compared to 2023.
Goodwill impairment in 2023 was recognized on the goodwill recorded from the acquisitions of the Culture Kings and Petal & Pup reporting units. 62 Table of Contents Other Expense, net Years Ended December 31, 2024 2023 Other expense, net Interest expense $ (10,296) $ (11,165) Other expense (1,044) (2,391) Total other expense, net $ (11,340) $ (13,556) Percent of net sales (2 %) (2 %) Other expense, net decreased by $2.2 million, or 16%, in 2024 compared to 2023, primarily due to lower interest expense from a reduction in our long-term balance, the impact of changes in foreign currency exchange rates and the loss recognized on the sale of the Rebdolls reporting unit in 2023.
In 2024 as compared to 2023, we: • Increased net sales to $574.7 million from $546.3 million , representing 5% year-over-year growth • Increased U.S. net sales to $368.8 million from $315.5 million , representing 17% year-over-year growth • Expanded gross margin by 200 basis points to 57% from 55% • Reduced our net loss to $26.0 million from $98.9 million • Increased Adjusted EBITDA to $23.3 million from $13.8 million , representing 69% year-over-year growth • Attracted 4.1 million active customers, an increase of 9% from the prior year • Received approximately 7.3 million orders, an increase of 7% from the prior year Key Operating and Financial Metrics Operating Metrics We use the following metrics to assess the progress of our business, make decisions on where to allocate capital, time and technology investments and assess the near-term and longer-term performance of our business.
In 2025 as compared to 2024, we: • Increased net sales to $600.2 million from $574.7 million , representing 4% year-over-year growth • Increased U.S. net sales to $394.3 million from $368.8 million , representing 7% year-over-year growth • Expanded gross margin by 30 basis points • Attracted 4.2 million active customers, an increase of 3% from the prior year • Received approximately 7.8 million orders, an increase of 6% from the prior year Key Operating and Financial Metrics Operating Metrics We use the following metrics to assess the progress of our business, make decisions on where to allocate capital, time and technology investments and assess the near-term and longer-term performance of our business.
While positive conditions in the economy generally promote customer spending on our sites and in our stores, any economic weakness can result in a reduction of customer spending and have a significant negative impact on our results of operations.
While positive conditions in the economy generally promote customer spending on our sites and in our stores, any economic weakness can result in a reduction of customer spending and have a significant negative impact on our results of operations. Specifically, many of our products may be viewed as discretionary items rather than necessities.
Year Ended December 31, (in thousands) 2024 2023 2022 Net sales $ 574,697 $ 546,258 $ 611,738 Cost of sales 247,192 245,978 274,491 Gross profit 327,505 300,280 337,247 Operating expenses: Selling 161,852 149,307 166,070 Marketing 74,710 68,907 66,730 General and administrative 101,264 96,951 102,700 Goodwill impairment — 68,524 173,786 Total operating expenses 337,826 383,689 509,286 Loss from operations (10,321) (83,409) (172,039) Other expense, net: Interest expense (10,296) (11,165) (7,043) Other expense (1,044) (2,391) (1,532) Total other expense, net (11,340) (13,556) (8,575) Loss before income taxes (21,661) (96,965) (180,614) (Provision for) benefit from income tax (4,329) (1,921) 3,917 Net loss $ (25,990) $ (98,886) $ (176,697) Year Ended December 31, 2024 2023 2022 Net sales 100 % 100 % 100 % Cost of sales 43 % 45 % 45 % Gross profit 57 % 55 % 55 % Operating expenses: Selling 28 % 27 % 27 % Marketing 13 % 13 % 11 % General and administrative 18 % 18 % 17 % Goodwill impairment — % 13 % 28 % Total operating expenses 59 % 70 % 83 % Loss from operations (2 %) (15 %) (28 %) Other expense, net: Interest expense (2 %) (2%) (1%) Other expense — % —% —% Total other expense, net (2 %) (2%) (1%) Loss before income taxes (4 %) (18 %) (30 %) (Provision for) benefit from income tax (1 %) —% 1% Net loss (5 %) (18 %) (29 %) 59 Table of Contents Comparison of the Years Ended December 31, 2024 and 2023 Net Sales Years Ended December 31, 2024 2023 Net sales $ 574,697 $ 546,258 Net sales increased by $28.4 million, or 5%, in 2024 compared to 2023.
Year Ended December 31, (in thousands) 2025 2024 2023 Net sales $ 600,208 $ 574,697 $ 546,258 Cost of sales 256,149 247,192 245,978 Gross profit 344,059 327,505 300,280 Operating expenses: Selling 177,822 161,852 149,307 Marketing 74,125 74,710 68,907 General and administrative 110,161 101,264 96,951 Goodwill impairment — — 68,524 Total operating expenses 362,108 337,826 383,689 Loss from operations (18,049) (10,321) (83,409) Other expense, net: Interest expense (9,975) (10,296) (11,165) Other expense (1,291) (1,044) (2,391) Total other expense, net (11,266) (11,340) (13,556) Loss before income taxes (29,315) (21,661) (96,965) Provision for income tax (2,119) (4,329) (1,921) Net loss $ (31,434) $ (25,990) $ (98,886) Year Ended December 31, 2025 2024 2023 Net sales 100 % 100 % 100 % Cost of sales 43 % 43 % 45 % Gross profit 57 % 57 % 55 % Operating expenses: Selling 30 % 28 % 27 % Marketing 12 % 13 % 13 % General and administrative 18 % 18 % 18 % Goodwill impairment — % — % 13 % Total operating expenses 60 % 59 % 70 % Loss from operations (3 %) (2 %) (15 %) Other expense, net: Interest expense (2 %) (2%) (2%) Other expense — % —% —% Total other expense, net (2 %) (2%) (2%) Loss before income taxes (5 %) (4 %) (18 %) Provision for income tax — % (1%) —% Net loss (5 %) (5 %) (18 %) 59 Table of Contents Comparison of the Years Ended December 31, 2025 and 2024 Net Sales Years Ended December 31, 2025 2024 Net sales $ 600,208 $ 574,697 Net sales increased by $25.5 million, or 4%, in 2025 compared to 2024.
The terminal growth rate is selected based on consideration of growth rates used in the forecast period, historical performance of the reporting unit and economic conditions. • A discount rate that reflects the risks inherent in realizing the forecasted cash flows. Under the market-based fair value methodology, judgment is required in evaluating market multiples and recent transactions.
The terminal growth rate is selected based on consideration of growth rates used in the forecast period, historical performance of the reporting unit and economic conditions. 67 Table of Contents • A discount rate that reflects the risks inherent in realizing the forecasted cash flows.
This was attributable primarily to more cash used to purchase inventory in 2024, as compared to 2023, to support growth in the U.S., partially offset by the timing of payments. For the year ended December 31, 2024 , Free Cash Flow decreased by $38.4 million compared to Free Cash Flow for the year ended December 31, 2023 .
This decrease was attributable primarily to more cash used to purchase inventory in 2024, as compared to 2023, to support growth in the U.S., partially offset by the timing of payments.
Net Cash Provided by (Used in) Financing Activities Our financing activities have historically consisted of cash proceeds from borrowings, cash used to pay down borrowings, cash received from the sale of our common stock in the IPO and cash used to repurchase shares of our common stock.
This increase was attributable to additional capital expenditures related to new stores . 65 Table of Contents Net Cash (Used in) Provided by Financing Activities Our financing activities have historically consisted of cash proceeds from borrowings, cash used to pay down borrowings, cash received from the sale of our common stock in the IPO and cash used to repurchase shares of our common stock.
(Provision for) Benefit from Income Tax Years Ended December 31, 2023 2022 (Provision for) benefit from income tax $ (1,921) $ 3,917 Percent of net sales — % 1 % Effective tax rate 2 % (2 %) Provision for income tax increased by $5.8 million, or 149%, in 2023 compared to 2022.
Provision for Income Tax Years Ended December 31, 2024 2023 Provision for income tax $ (4,329) $ (1,921) Percent of net sales (1 %) — % Effective tax rate (20 %) (2 %) Provision for income tax increased by $2.4 million, or 125%, in 2024 compared to 2023.
In 2023, net cash used in financing activities increased $86.1 million as compared to net cash provided by financing activities in 2022.
In 2025, net cash used in financing activities increased by $19.9 million as compared to net cash provided by financing activities in 2024.
The increase in selling expenses as a percentage of net sales was primarily due to the opening of additional stores and the impact from growing marketplace initiatives. 60 Table of Contents Marketing Expenses Years Ended December 31, 2024 2023 Marketing $ 74,710 $ 68,907 Percent of net sales 13 % 13 % Marketing expenses increased by $5.8 million, or 8%, in 2024 compared to 2023.
Marketing Expenses Years Ended December 31, 2024 2023 Marketing $ 74,710 $ 68,907 Percent of net sales 13 % 13 % Marketing expenses increased by $5.8 million, or 8%, in 2024 compared to 2023. Marketing expenses as a percentage of net sales for 2024 was flat compared to 2023.
We estimate our liability for product returns based on historical return trends and an evaluation of current economic and market conditions, all of which have a degree of uncertainty. We record the expected customer refund liability as a reduction to revenue, and the expected inventory right of recovery as a reduction of cost of goods sold.
Our revenue is reported net of sales returns and discounts. We estimate our liability for product returns based on historical return trends and an evaluation of current economic and market conditions, all of which have a degree of uncertainty.
Goodwill Impairment Years Ended December 31, 2024 2023 Goodwill impairment $ — $ 68,524 Percent of net sales — % 13 % There was no goodwill impairment in 2024. Goodwill impairment in 2023 was recognized on the goodwill recorded from the acquisitions of the Culture Kings and Petal & Pup reporting units.
Goodwill Impairment Years Ended December 31, 2024 2023 Goodwill impairment $ — $ 68,524 Percent of net sales 0 % 13 % There was no goodwill impairment in 2024.
We determine revenue recognition through the following steps in accordance with the Financial Accounting Standards Board’s Revenue from Contracts with Customers (Topic 606) : • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, we satisfy a performance obligation.
We determine revenue recognition through the following steps in accordance with the Financial Accounting Standards Board’s Revenue from Contracts with Customers (Topic 606) : • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, we satisfy a performance obligation. 66 Table of Contents Revenue is recognized upon shipment when control of the promised goods or services is transferred to our customers, or at point of sale for purchases in our stores, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
We write down inventory where it appears that the carrying cost of the inventory may not be recovered through subsequent sale of the inventory.
Cost of inventory includes import duties and other taxes and transport and handling costs to deliver the inventory to our distribution centers or stores. We write down inventory where it appears that the carrying cost of the inventory may not be recovered through subsequent sale of the inventory.
Gross margin increased primarily due to the impact from more full price selling and improved inventory position, partially offset by the effect of growing wholesale initiatives, which have lower gross margins.
Gross margin increased primarily due to the impact from more full price selling and improved inventory position, partially offset by the effect of growing wholesale initiatives, which have lower gross margins. 61 Table of Contents Selling Expenses Years Ended December 31, 2024 2023 Selling $ 161,852 $ 149,307 Percent of net sales 28 % 27 % Selling expenses increased by $12.5 million, or 8%, in 2024 compared to 2023.
The overall decrease in net sales was primarily driven by an 8% decrease in the number of orders we processed in 2023 compared to 2022, which drove a decrease in net sales of $49.7 million, and a decrease in our average order value of 2%, from $82 in 2022 to $80 in 2023, which drove a decrease in net sales of $15.8 million.
The overall increase in net sales was primarily driven by an 6% increase in the number of orders we processed in 2025 compared to 2024, partially offset by a decrease in our average order value of 3%, from $79 in 2024 to $77 in 2025.
Selling Expenses Years Ended December 31, 2024 2023 Selling $ 161,852 $ 149,307 Percent of net sales 28 % 27 % Selling expenses increased by $12.5 million, or 8%, in 2024 compared to 2023.
General and Administrative Expenses Years Ended December 31, 2025 2024 General and administrative $ 110,161 $ 101,264 Percent of net sales 18 % 18 % General and administrative expenses increased by $8.9 million, or 9%, in 2025 compared to 2024.
Management believes that the assumptions used for its impairment tests are representative of those that would be used by market participants performing similar valuations of our reporting units. The carrying value of definite-lived intangible assets is reviewed whenever events or changes in circumstances indicate the carrying amount of the assets might not be recoverable.
Under the market-based fair value methodology, judgment is required in evaluating market multiples and recent transactions. Management believes that the assumptions used for its impairment tests are representative of those that would be used by market participants performing similar valuations of our reporting units.
If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur. We have not made any material changes to our assumptions included in our calculations of expected customer refund activity during the year ended December 31, 2024.
We record the expected customer refund liability as a reduction to revenue, and the expected inventory right of recovery as a reduction of cost of goods sold. If actual return costs differ from previous estimates, the amount of the liability and corresponding revenue are adjusted in the period in which such costs occur.
The highest interest rates under the Credit Agreement for both the term loan and the revolving line of credit occur at a net leverage ratio of greater than 2.75x, yielding an interest rate of a benchmark rate plus 3.25%.
Borrowings under the Amended and Restated Credit Agreement accrue interest at Term SOFR plus an applicable margin dependent upon the Company’s net leverage ratio, as defined in the Amended and Restated Credit Agreement. The highest rate under the agreement occurs at a net leverage ratio of greater than 2.75x, yielding an interest rate of Term SOFR plus 3.75%.
In 2024, net cash used in investing activities increased $5.6 million. This was attributable to additional capital expenditures related to new stores. In 2023, net cash used in investing activities decreased $19.3 million. This was attributable to a reduction in purchases of property and equipment and the cash paid from holdbacks in the prior period related to the mnml acquisition.
In 2025, net cash used in investing activities increased by $5.5 million. This increase was attributable to additional capital expenditures related to new stores. In 2024, net cash used in investing activities increased by $5.6 million.
In 2024, net cash provided by operating activities decreased $32.8 million. This was attributable primarily to more cash used to purchase inventory in 2024, as compared to 2023, to support growth in the U.S., partially offset by the timing of payments. In 2023, net cash provided by operating activities increased $33.7 million.
In 2025, net cash provided by operating activities increased by $15.8 million. This increase was attributable primarily to more sell through of inventory in 2025, as compared to 2024, as net sales grew by 4%, as well as an increase in lease incentive payments received. In 2024, net cash provided by operating activities decreased by $32.8 million.
Additionally, as of December 31, 2024, the estimated fair value of the mnml reporting unit exceeded the carrying value by 11.2%, and the carrying value of the related goodwill was $30.0 million. No impairment was identified as part of the annual goodwill impairment test conducted in 2024. Income Taxes Income taxes are accounted for under the asset and liability method.
Holding all other assumptions used in the fair value measurement of the mnml reporting unit constant, a 60 basis points increase in the selected discount rate would result in impairment. No impairment was identified as part of the annual goodwill impairment test conducted in 2025. Income Taxes Income taxes are accounted for under the asset and liability method.
This increase was primarily due to limitations in interest expense deduction in Australia and the additional valuation allowance on the net deferred tax assets in the U.S.
This increase was primarily due to limitations in interest expense deduction in Australia and the additional valuation allowance on the net deferred tax assets in the U.S. 63 Table of Contents Liquidity and Capital Resources As of December 31, 2025, our principal sources of liquidity were cash and cash equivalents totaling $20.3 million, our revolving line of credit and our term loan accordion provision.
This reduction was identified as a triggering event and a subsequent quantitative test concluded that the carrying value of the Culture Kings and Petal & Pup reporting units exceeded their fair values as of August 31, 2023.
These revisions and a continued decrease in our stock price were identified as triggering events and a subsequent quantitative test concluded that the fair value of each of our reporting units exceeded their carrying values as of June 30, 2025.
The decrease was primarily driven by a $2.7 million decrease in intangible amortization, a $2.1 million decrease in wages and benefits and a $1.5 million decrease in insurance costs. A $1.2 million increase in professional fees partially offset these decreases.
The increase was primarily driven by a $5.3 million increase in wages and incentive compensation expense, a $2.1 million increase in professional services, a $2.1 million increase in other non-routine legal matters and a $1.0 million increase in travel expenses. Partially offsetting these increases was a $1.2 million decrease in insurance expense and a $0.4 million decrease in nonrecurring penalties.
Comparison of the Years Ended December 31, 2023 and 2022 Net Sales Years Ended December 31, 2023 2022 Net sales $ 546,258 $ 611,738 Net sales decreased by $65.5 million, or 11%, in 2023 compared to 2022.
This decrease was primarily due to establishment of a valuation allowance against certain deferred tax assets in the U.S. in 2024. Comparison of the Years Ended December 31, 2024 and 2023 Net Sales Years Ended December 31, 2024 2023 Net sales $ 574,697 $ 546,258 Net sales increased by $28.4 million, or 5%, in 2024 compared to 2023.
The increase in general and administrative expenses as a percentage of net sales resulted primarily from lower net sales in 2023 compared to 2022. Goodwill Impairment Years Ended December 31, 2023 2022 Goodwill impairment $ 68,524 $ 173,786 Percent of net sales 13 % 28 % Goodwill impairment decreased by $105.3 million, or 61%, in 2023 compared to 2022.
The increase in selling expenses as a percentage of net sales was primarily due to the opening of additional stores. Marketing Expenses Years Ended December 31, 2025 2024 Marketing $ 74,125 $ 74,710 Percent of net sales 12 % 13 % Marketing expenses decreased by $0.6 million, or 1%, in 2025 compared to 2024.
The decrease in cost of sales as a percentage of net sales was primarily due to the impact from more full price selling and improved inventory position, partially offset by the effect of growing wholesale initiatives, which have lower gross margins.
This increase was primarily driven by the 4% increase in net sales in 2025, as compared to 2024. Gross margin was flat compared to 2024 with improvements from a higher mix of retail stores, an improved inventory position, more full price selling and targeted price increases, offset by the impact of tariffs and duties net of duty drawback.
The inability to raise capital if needed would adversely affect our ability to achieve our business objectives.
The inability to raise capital if needed would adversely affect our ability to achieve our business objectives. Amended and Restated Syndicated Facility On October 14, 2025, we entered into an Amended and Restated Syndicated Facility Agreement (the “Amended and Restated Credit Agreement”), which amends and restates in its entirety the previous credit agreement.
Inventory Inventories are stated at the lower of cost and net realizable value. Cost is determined using an average cost method. Cost of inventory includes import duties and other taxes and transport and handling costs to deliver the inventory to our distribution centers or stores.
We have not made any material changes to our assumptions included in our calculations of expected customer refund activity during the year ended December 31, 2025. Inventory Inventories are stated at the lower of cost and net realizable value. Cost is determined using an average cost method.
Marketing Expenses Years Ended December 31, 2023 2022 Marketing $ 68,907 $ 66,730 Percent of net sales 13 % 11 % Marketing expenses increased by $2.2 million, or 3%, in 2023 compared to 2022. The increase in marketing expenses was driven by additional marketing spend due to reduced marketing effectiveness, particularly in Australia.
Selling Expenses Years Ended December 31, 2025 2024 Selling $ 177,822 $ 161,852 Percent of net sales 30 % 28 % Selling expenses increased by $16.0 million, or 10%, in 2025 compared to 2024. This increase was driven by the opening of additional stores, as well as the 4% increase in net sales in 2025 compared to 2024.
This was primarily attributable to the combined $50.7 million in principal payments, net of borrowings, on our senior secured credit facility in 2023 and the $34.4 million in borrowings, net of repayments, under our senior secured credit facility in 2022 . 66 Table of Contents Share Repurchase Program On May 25, 2023, our board of directors approved the Share Repurchase Program, authorizing us to repurchase up to $2.0 million of shares of our common stock.
This increase was primarily attributable to the $17.9 million in principal borrowings, net of repayments, on our senior secured credit facility in 2024 and $1.4 million in debt issuance costs, under our Amended and Restated Credit Agreement in 2025.
Cost of Sales Years Ended December 31, 2023 2022 Cost of sales $ 245,978 $ 274,491 Percent of net sales 45 % 45 % Cost of sales decreased by $28.5 million, or 10%, in 2023 compared to 2022.
Provision for Income Tax Years Ended December 31, 2025 2024 Provision for income tax $ (2,119) $ (4,329) Percent of net sales — % (1 %) Effective tax rate (7 %) (20 %) Provision for income tax decreased by $2.2 million, or 51%, in 2025 compared to 2024.
The decrease in the number of orders and average order value were primarily due to adverse macroeconomic conditions in Australia and New Zealand. On a constant currency basis, net sales and average order value for 2023 would have decreased 9% and 1%, respectively, as compared to 2022.
On a constant currency basis, net sales and average order value for 2025 would have increased 5% and decreased 1%, respectively, as compared to 2024. Gross Profit Years Ended December 31, 2025 2024 Gross profit $ 344,059 $ 327,505 Gross margin 57 % 57 % Gross profit increased by $16.6 million, or 5%, in 2025 compared to 2024.
Removed
Cost of Sales Years Ended December 31, 2024 2023 Cost of sales $ 247,192 $ 245,978 Percent of net sales 43 % 45 % Cost of sales increased by $1.2 million in 2024 compared to 2023, due to a 7% increase in the total number of orders in 2024, as compared to 2023, and the effect of growing wholesale and marketplace initiatives, mostly offset by more full price selling and an improved inventory position.
Added
This was attributable primarily to more sell through of inventory in 2025, as compared to 2024, as net sales grew by 4%, as well as an increase in lease incentive payments received. For the year ended December 31, 2025 , Free Cash Flow increased by $10.3 million compared to Free Cash Flow for the year ended December 31, 2024 .
Removed
This decrease was primarily driven by an 8% decrease in the total number of orders in 2023, as compared to 2022, a decrease in our average order value of 2% and lower inbound air freight costs, partially offset by a higher merchandise return rate.
Added
Consequently, our results of operations tend to be sensitive to changes in the macroeconomic environment that impact consumer discretionary spending.
Removed
While cost of sales as a percent of net sales was flat in 2023 compared to 2022, cost of sales as a percent of net sales would have increased due to targeted discounting in Culture Kings Australia and a higher merchandise return rate if not offset by lower inbound air freight costs.
Added
On February 20, 2026, the U.S. Supreme Court struck down certain tariffs imposed under IEEPA. It is unclear at this time what impact this decision will have on our business, including whether we will be able to obtain refunds of amounts previously collected for such tariffs or the level of replacement tariffs the Trump Administration imposes through other means.
Removed
Gross Profit Years Ended December 31, 2023 2022 Gross profit $ 300,280 $ 337,247 Gross margin 55 % 55 % Gross profit decreased by $37.0 million, or 11%, in 2023 compared to 2022. This decrease was primarily driven by the 11% decrease in net sales, as well as a higher merchandise return rate.
Added
General and administrative expenses as a percentage of net sales for 2025 was flat compared to 2024. 60 Table of Contents Other Expense, net Years Ended December 31, 2025 2024 Other expense, net: Interest expense $ (9,975) $ (10,296) Other expense (1,291) (1,044) Total other expense, net $ (11,266) $ (11,340) Percent of net sales (2 %) (2 %) Other expense, net decreased by $0.1 million, or 1%, in 2025 compared to 2024, primarily due to lower interest expense from a reduction in our long-term balance, partially offset by the impact of changes in foreign currency exchange rates.
Removed
These impacts were partially offset by lower air freight expense.
Added
The Amended and Restated Credit Agreement amends and restates the Credit Agreement to, among other things, (i) establish revolving credit facility commitments in an aggregate principal amount of $35.3 million (ii) establish term loans in an aggregate principal amount of $85.0 million, (iii) adjust the pricing stepdowns related to the interest rate on the Term SOFR Loans, Base Rate Loans and BBSY Loans (each as defined in the Amended and Restated Credit Agreement) after delivery of a compliance certificate for the fiscal year ending December 31, 2025 and (iv) resize baskets within certain negative covenants based on a Consolidated EBITDA (as defined in the Amended and Restated Credit Agreement) of $35.2 million.
Removed
While gross margin was flat in 2023 compared to 2022, gross margin would have decreased due to targeted discounting in Culture Kings Australia and a higher merchandise return rate, if not offset by lower inbound air freight costs. 62 Table of Contents Selling Expenses Years Ended December 31, 2023 2022 Selling $ 149,307 $ 166,070 Percent of net sales 27 % 27 % Selling expenses decreased by $16.8 million, or 10%, in 2023 compared to 2022.
Added
As of December 31, 2025, we had $83.4 million in outstanding term loan borrowings, as well as $28.6 million outstanding under the revolving line of credit. The Amended and Restated Credit Agreement extends the maturity date of the revolving credit facility commitments and the term loans to October 14, 2028.
Removed
This decrease was driven by the 8% decrease in the number of orders shipped in 2023 compared to 2022, and operational efficiencies in distribution, fulfillment and outbound shipping.
Added
The Company is required to make mandatory amortization payments in respect of the term loans in an amount equal to (a) commencing with the fiscal quarter ending on December 31, 2025 and until the fiscal quarter ending on December 31, 2027, a principal amount of term loans equal to the aggregate outstanding principal amount of term loans made on the date of the execution of the Amended and Restated Credit Agreement, multiplied by 1.875% and (b) commencing with the fiscal quarter ending on March 31, 2028, a principal amount of term loans equal to the aggregate outstanding principal amount of term loans made on the date of the execution of the Amended and Restated Credit Agreement, multiplied by 2.50%.
Removed
The increase in marketing expenses as a percentage of net sales was primarily due to lower net sales in 2023 compared to 2022.
Added
The Amended and Restated Credit Agreement includes certain financial covenants requiring the Company to maintain a maximum total net leverage ratio and a minimum fixed charge coverage ratio, each tested as of the last day of every fiscal quarter.
Removed
General and Administrative Expenses Years Ended December 31, 2023 2022 General and administrative $ 96,951 $ 102,700 Percent of net sales 18 % 17 % General and administrative expenses decreased by $5.7 million, or 6%, in 2023 compared to 2022.
Added
Specifically, the Company must maintain a maximum total net leverage ratio of 3.50 to 1.00 and a minimum fixed charge coverage ratio of 1.35 to 1.00 for 2025 and 2026, 3.25 to 1.00 and 1.50 to 1.00 for 2027, and 3.00 to 1.00 and 1.75 to 1.00 for 2028, respectively.
Removed
Goodwill impairment in 2023 was recognized on the goodwill recorded from the acquisitions of the Culture Kings and Petal & Pup reporting units. Goodwill impairment in 2022 was recognized on the goodwill recorded from the acquisitions of the Culture Kings and Rebdolls reporting units.
Added
The agreement also includes a capital expenditure covenant limiting growth-related capital expenditures for new store development to $17.5 million for the period from October 14, 2025, through the first anniversary of that date, with annual limits of $20.0 million and $22.5 million in subsequent years.
Removed
In August 2023, due to elevated interest rates and unfavorable demand in Australia, we reduced our earnings forecasts and expectations for the Culture Kings and Petal & Pup reporting units.

… 26 more changes not shown on this page.

Other AKA 10-K year-over-year comparisons