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Direct-to-consumer (DTC) growth of approximately 10% was driven by strategic pricing actions and improved customer experience, which offset wholesale volatility.
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Management achieved net sales growth of 2.2% and adjusted EBITDA of $15.1 million for fiscal 2025 despite dealing with approximately $8 million in incremental tariff costs.
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The men’s business reached 24% of total sales, with a strategic roadmap to achieve 30% penetration through expanded wholesale partnerships and in-store assortments.
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A $2 million sales drag in the fourth quarter was due to disruptions at Saks Global, although management remains confident in the partner’s new leadership to stabilize the business.
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The success of the London store has increased interest in establishing a flagship store in Paris as the next international gateway, although finding the right location remains a challenge.
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The partnership with Authentic Brands Group (ABG) is being leveraged for high-profile marketing activations and increased category reach through dropshipping.
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Full-year fiscal 2026 guidance assumes net sales growth of 3% to 6%, supported by continued momentum in the full-price business.
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Financial projections incorporate a reduced reciprocal tariff rate of 15%, although the benefits are expected to be offset by increased fuel and transportation costs.
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The company is exploring ‘platform’ opportunities to leverage its internal team and capabilities to support additional third-party brands as a new revenue stream.
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Strategic investments will focus on store remodels, digital platform enhancements and expanding dropshipping categories to include custom bags and apparel in the second quarter.
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Management expects to achieve SG&A leverage as the business surpasses the historical revenue range of $300 million.
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Bad debt expense of $6 million was recorded in the fourth quarter specifically related to the reorganization of Saks Global.
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The carrying value of inventory increased approximately $4.8 million year over year, driven primarily by the impact of tariffs.
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The company successfully settled its third lien service in January 2025, significantly reducing net interest expense.
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The gross margin rate was pressured by 300 basis points from tariffs, 160 basis points from promotional events and 125 basis points from increased freight costs, partially offset by pricing gains.
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