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Wednesday, KeyBanc Capital Markets maintained their Sector Weight rating on AKA Brands Holding Corp (NYSE: NYSE:AKA) stock, which currently trades at $8.70 with a market capitalization of $93 million. According to InvestingPro data, the stock has shown significant momentum with a 14.78% return over the past week, though it remains highly volatile. Analyst Ashley Owens highlighted that the company surpassed first-quarter expectations and updated its fiscal year 2025 guidance. AKA Brands, known for its multi-brand e-commerce platform, reported a robust 14.2% year-over-year increase in U.S. sales to $88 million. This performance aligns with the company’s overall revenue growth of 8.09% over the last twelve months, reaching $586.5 million. The growth is attributed to the company’s successful omnichannel strategy and solid customer acquisition, with active customers rising by 8% compared to the previous year.
In addition to its strong performance in the U.S., AKA Brands also saw positive growth in Australia and New Zealand for the first time since 2021. Sales in these regions grew by 6.2% year-over-year, which was partly due to the ongoing restructuring efforts at Culture Kings, a subsidiary of AKA Brands. The company’s growth in these markets signifies a positive turn after a period of stagnation.
Owens from KeyBanc expressed optimism about the long-term opportunities for AKA Brands, citing the company’s customer retention, expansion of its omnichannel presence, and initial progress in the Australian and New Zealand markets. The analyst pointed out that the company’s test and reorder business model supports its potential for growth. However, Owens also noted that the company faces slight headwinds due to tariffs, which could affect profitability guidance.
Despite these challenges, KeyBanc’s outlook for AKA Brands remains positive. The firm believes that the company’s resilience and strategic initiatives position it well for long-term growth, even amidst an uncertain macroeconomic environment. The updated fiscal year 2025 guidance provided by AKA Brands reflects the company’s confidence in its business model and market strategy. InvestingPro analysis suggests the stock is currently undervalued, with a healthy current ratio of 1.52 indicating strong short-term liquidity. Discover 10+ additional exclusive ProTips and comprehensive financial analysis for AKA Brands with an InvestingPro subscription.
In other recent news, AKA Brands Holding Corp reported a strong financial performance for the first quarter of 2025, with net sales rising by 10.1% year-over-year to $129 million. The company’s U.S. segment led the growth with a 14.2% increase, and adjusted EBITDA rose significantly to $2.7 million from $900,000 in the previous year. Telsey Advisory Group responded to these results by raising the company’s stock price target to $10.00, maintaining a Market Perform rating. The firm highlighted AKA Brands’ improved results and stabilization despite macroeconomic challenges and tariff uncertainties.
The company has also reaffirmed its full-year net sales guidance of $600 million to $610 million, representing a 4-6% growth, with adjusted EBITDA expected to range from $24 million to $27.5 million. AKA Brands is actively working to mitigate the impact of tariffs by diversifying its supply chain and reducing its dependence on sourcing from China. The company continues to focus on growth strategies, including expanding its product offerings, enhancing retail partnerships, and increasing brand recognition.
Additionally, the company is pursuing omni-channel expansion, with store openings and wholesale partnerships contributing to its growth. The recent developments underscore the company’s strategic initiatives and market resilience, positioning it for continued success in the competitive retail industry.
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