On Tuesday, a.k.a. Brands Holding (NYSE:AKA) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

a.k.a. Brands Holding reported a 3% increase in net sales to $132.5 million and an adjusted EBITDA of $5.1 million for Q1 2026, exceeding expectations.

The company achieved a gross margin expansion to 59%, driven by improved inventory discipline and the success of its test and repeat model, particularly in streetwear brands.

Strategic initiatives included expanding distribution across stores, wholesale, and marketplaces, and increasing investment in AI to enhance product imagery, marketing efficiency, and inventory optimization.

Princess Polly's retail expansion continues with new store openings in the US and Australia, and strong performance on TikTok, contributing to customer acquisition.

Petal and Pup is gaining traction with significant wholesale momentum, expanding into new accounts such as Nordstrom, Von Maur, and Dillard's.

The company's streetwear brands, including Culture Kings, showed improved full price mix and gross margins due to strengthened in-house brand portfolios.

a.k.a. Brands Holding reduced its debt by 17% over the past three years and expects fiscal 2026 net sales between $625 to $635 million and adjusted EBITDA between $30 to $32 million.

Management remains positive about the company's strategic trajectory, despite some macroeconomic pressures on consumer spending.

Full Transcript

OPERATOR

Greetings and welcome to the a.k.a. Brands Holding First quarter and fiscal 2026 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require Operator assistance, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Emily Schwartz, Vice President of Investor Relations. Please go ahead.

Emily Schwartz (Vice President of Investor Relations)

Good afternoon. Thank you for joining AKA Brands to discuss our first quarter 2026 results released this afternoon, which can be found on our website at ir.aka-brands.com with me on the call today is Kieran Long, Chief Executive Officer and Kevin Grant, Chief Financial Officer. Before we get started, I'd like to remind you of the Company's safe Harbor language. Management may make forward looking statements which refer to expectations, projections and other characterizations of future events including guidance and underlying assumptions. Forward looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed. For a further discussion of risks related to our business, please see our filings with the sec. Adjusted Gross Margin and constant Currency Net Sales Reconciliations of these non GAAP measures to the most comparable GAAP measures are included in the release furnished to the SEC and available on our website. With that, I'll turn the call over to Kieran Long

Kieran Long (Chief Executive Officer)

Good afternoon and thank you for joining us to discuss our first quarter 2026 results. We delivered a strong start to the year with net sales of 132.5 million up 3% and adjusted EBITDA of 5.1 million ahead of expectations. More importantly, our results reflect significant gross margin expansion year over year as the structural improvements we've made to the business begin to take hold. Gross margin excluding one time adjustments related to tariffs and strategic charges primarily related to legacy streetwear inventory reached 59% which expanded by approximately 180 basis points year over year. The margin expansion was driven by improved inventory discipline, stronger full price sell through and the continued rollout of our test and repeat model. Importantly, the majority of that underlying gross margin expansion came from our streetwear brands. For several years the Culture Kings transition has been a priority strategic initiative moving on to test and repeat rebuilding the in house brand portfolio, resetting inventory and elevating product quality. This quarter that work translated into financial performance with streetwear delivering meaningful gross margin improvement year over year. We view this as the single clearest proof point that the structural changes are working. Over the past three years we fundamentally repositioned AKA brands to improve profitability and durability. We've expanded distribution of our brands across stores, wholesale and marketplace. We've strengthened our operational foundation and we've instilled a greater level of financial discipline across the business. I believe we're now just starting to see the payoff of that work and 2026 will be a meaningful proof point in our trajectory. First, while we continue to grow our e commerce presence, we've expanded beyond our historical direct to consumer routes into a diversified omnichannel model across ret wholesaler marketplaces. Princess Polly now operates 13 stores across the US and opened its first store in Australia at Bondi beach in December with more to come in both regions. In 2026, we also launched with multiple wholesale partners in multiple countries and marketplace channels which continue to exceed our expectations. These channels are no meaningful contributors and are expanding our total addressable market while improving brand visibility and customer acquisition. Second, we built the operational foundation and added team members in key functions to support this expansion, setting the stage for a scalable business model with strong profit flow through We've brought inventory down by approximately 45 million over the past three years, primarily in our streetwear business. This achievement has transformed the structure of our operating model, delivering healthier inventory turns, stronger full price selling and the financial flexibility to invest aggressively in growth. This disciplined inventory approach has also enabled us to accelerate our transition to a test and repeat merchandising model across our streetwear brands. As I mentioned, moving Culture Kings and Minimal fully onto this model has been a multi year effort and the results are increasingly evident. Our year over year gross margin improvements directly reflects a and more focused assortment that customers are positively reacting to and better buying discipline. Third, we accomplished a comprehensive transformation of our sourcing network in 2025, diversifying our sourcing across multiple geographies and vendors. It was a remarkable amount of work to have accomplished in such a short period of time and I'm very grateful to the teams who delivered on the task. We now operators sort of the ongoing trade environment and our next phase of growth. And lastly, taken together, we've been able to strengthen our financial foundation, reducing our debt by 17% over the past three years, which positions us to accelerate our growth and profitability in the years ahead. Heading into the balance of the year, our focus remains on three attracting and retaining customers through exclusive trend driven product and innovative marketing across our direct to consumer channels, expanding brand awareness and our total addressable market through continued investment in physical retail and strategic wholesale partners and continuing to streamline our operations and strengthen our financial foundation. As discussed last quarter, we're also increasing our investment in AI across the platform with early applications already improving product imagery, marketing efficiency and inventory optimization. While still early, we expect these initiatives to contribute meaningfully to margin expansion over time. Turning now to our brand highlights, starting with Princess Polly. Our largest brand, Princess Polly delivered strong performance in the quarter, driven by disciplined execution of its test and repeat model and consistent weekly newness supporting strong full price sell through. Dresses continue to drive volume tied to key seasonal moments and Swim was a standout category that continues to grow as we enter the second quarter. We are also seeing good traction in basics and knits, expanding share of wardrobe and supporting a more consistent demand across categories. Key seasonal events including Valentine's Day festival and Graduation drove meaningful growth, with graduation delivering record performance across sales, inventory turns and margins. From a marketing standpoint, the team continued to scale its TikTok presence in the quarter, expanding paid investment and going live up to 100 hours per week. We're now leveraging thousands of affiliate and creator videos per month and February and March were both record months on the platform. TikTok shop also continues to drive new customer acquisition efficiently and the team is scaling it with conviction heading into Q2. We're also seeing strong momentum in Omni Channel expansion. We're excited to announce that Princess Polly will open a thousand square foot pop up at the Grove in Los Angeles which will run from the end of this month through the end of July. With eight new US Store leases fully executed with four expected to open by year end, I'm really confident in the momentum of the retail expansion. The Bondi beach store has also been very well received since opening in December and the brand will open another Australian store at Pacific Fair, slated to open in the back half of the year with more to come internationally. The UK distribution hub launched in March is off to a strong start with immediate sales acceleration driven by improved speed and customer experience, establishing a foundation for further growth in the back half and over the long term. Turning now to Petal and Pup, the brand continues to gain traction with its core customer and the progress the team has made expanding the business across channels and geographies has been significant. Petal and Pup delivered solid performance in Q1 with event dressing remaining the highest growth category across all regions and channels, particularly for event dresses at accessible price points. Customers also continue to expand into additional product categories as Petal and Pup grows as the separates offering, with tops and bottoms now representing a meaningfully higher share of the mix. Wholesale momentum continues to build with strong performance at key partners and successful expansion into new accounts across both the US and international markets. Nordstrom's performance remained strong through the quarter with the brand well established at Nordstrom's trend section across the dresses and casual styles. Von Maurer launched in February with stores already chasing into top performing styles. Following strong initial sell through Dillard's, completed its first store test shipment in Q1 and will go live across nine locations in the second quarter. Petal and Pup also opened a new showroom in Los Angeles during March market week and secured 30 new specialty accounts within the first month ranging from independent boutiques to multi location retailers. The breadth of distribution Petal and Pup is building gives me a lot of confidence in the strength and trajectory of the brand. Turning now to our streetwear brands, Culture Kings continues to differentiate through its highly immersive retail experience and curated mix of in house and third party brands. A key focus with the team has been strengthening the in house brand portfolio including Loitering, 73 Studio, Carre and St Morte, evolving the merchandising approach, relaunching priority brands and elevating product quality. That work is now delivering measurable results with full price mix and gross margin both improving materially year over year. 73 Studio delivered a strong quarter anchored by launches across Marvel and Xbox, with the brand now established as one of the largest revenue contributors in the us. Loiter also delivered a strong quarter with the Marvel collection resonating well with customers and key styles already being reordered ahead of the upcoming Spider man and Avengers releases later this year. Minimal also continued its positive trajectory driven by disciplined execution of the test and repeat model and a more focused assortment. Brand activations and cultural partnerships remain an important driver of traffic and engagement. During the quarter. The team executed activations across NBA All Star Weekend in Los Angeles, partnered with Atlassian Williams racing around the Formula One Melbourne Grand Prix and recently launched a WWE collaboration tied to WrestleMania in Las Vegas. These initiatives continue to reinforce Culture Kings positioning at the intersection of streetwear and culture on the stores front. The relocated Brisbane store in Australia continues to demonstrate the potential of the refined store model. The store is now the strongest performing location in the Australia fleet with gross margin, full price, mix and traffic all improving materially year over year. We're actively pursuing a second US Store location using the learnings from the Brisbane store and I look forward to updating you on the progress looking ahead. Culture Kings has a strong pipeline of collaborations and activations tied to global events including the World Cup, UFC and Formula One, and the team remains focused on continuing to scale in house brands, drive margin expansion and further strengthen the overall model in closing, the first quarter results and the progress across our brands demonstrate that this strategic work is translating into financial results and I believe we are at a genuine inflection point in the trajectory of the business. The foundation is in place, the channels are scaling and the brands are well positioned for growth ahead. I want to thank our teams for the continued hard work and commitment. Our recent performance is a direct reflection of their dedication to our brands and customers. With that, I'll turn it over to Kevin.

Kevin Grant (Chief Financial Officer)

Thanks Kiran. We are pleased with our solid start to the year with first quarter net sales and EBITDA coming in ahead of our expectations. Before turning to results, I want to provide more context on the tariff adjustment as reflected in our filings. We paid 25.8 million in IEPA tariffs since their inception, 18.6 million flowing through COGS and the remaining 7.2 million capitalized in inventory. Following the Supreme Court's decision to overturn the tariffs and our successful refund submission to cbp, we recognize the benefit of this adjustment as a receivable in our first quarter results. As part of the IEPA reversal, We also recognized approximately 2 million of charges related to the reversal of duty, drawback benefits and other anticipated charges. As of yesterday, We've already received approximately 6 million of the 25.8 million of expected IEPA refunds. We also made a strategic decision to write off 12 million of legacy streetwear inventory as we finalized the transition to the test and repeat model. We view this as a one time opportunity to reset the business and align inventory with our model, positioning us for improved margins and returns going forward. For the first quarter, net sales increased 3% to 132.5 million slightly ahead of our outlook driven by a 3.2% increase in U.S. sales. We're also pleased with our performance in Australia with sales increasing 3.8% to 36.9 million. Total orders were 1.7 million up to 4.2% year over year. Trailing 12 month active customers excluding wholesale increased 3.1% to 4.26 million compared to 4.13 million a year ago and average order value is $77. Let me give more color on the adjusted gross margin for the quarter starting from prior year. Gross margin of 57.2%. Our underlying business delivered approximately 180 basis points of expansion to 59% which as Kiran mentioned was driven by improved inventory discipline, stronger full price sell through and the continued rollout of test and repeat in our streetwear brands. From there the IEPA tariff Recovery added approximately 1400 basis points. The legacy streetwear inventory write off was a 900 basis point headwind and the duty drawback, reversal and related charges or about 80 basis points of headwind that bridges to reported gross margin of 63.1%. We believe the 59% underlying figure is the right number to anchor on for the run rate of the business. Selling expenses were 41 million or 30.9% of net sales compared to 29.7% a year ago resulting from an increase in store selling expenses as we grow our retail footprint. Marketing expenses were 16.8 million or 12.6% of net sales. General and administrative expenses were 30 million or 22.7% of net sales. G and A expenses increased year over year due to an increase in headcount to support our channel expansion strategy and technology investments. Our adjusted EBITDA increased to 5.1 million compared to 2.7 million a year ago and our adjusted EBITDA margin grew 180 basis points to 3.9%. Turning to the balance sheet, we ended the quarter with $12.9 million in cash and cash equivalents. The year over year decline primarily reflects continued investment in retail expansion and working capital optimization. Total debt at the end of the quarter was $109.6 million down from $119.9 million a year ago, reflecting a continued progress in reducing our leverage and strengthening the financial foundation of the business. We ended the quarter with $67.7 million in inventory down 28% from $94.4 million a year ago, reflecting the continued benefits of our disciplined buying approach and the inventory write off. Turning now to our outlook for fiscal 2026, we continue to expect net sales to be between 625 to 635 million and adjusted EBITDA between 30 to 32 million for the back half of the year. Our outlook reflects tariff rates at the pre Supreme Court ruling. For the second quarter we expect net sales to be between 100164 million reflecting a low single digit growth rate. We expect adjusted EBITDA to be between 8.5 and 9 million in the second quarter. To give you some more color for modeling purposes in the second quarter we expect gross margin around 60% for modeling purposes for the full year we anticipate fiscal 2026 stock based compensation of approximately 6.5 to 7 million, depreciation and amortization expense of roughly 20 to 21 million, interest and other expense of approximately 16 to 18 million, an effective tax rate of negative 10% CAPEX between 18 to 20 million and weighted average diluted share count of approximately 11 million. In closing, our first quarter results demonstrate that the structural changes we've made to the business are translating into improved profitability and earnings power. While the macro environment remains dynamic, we believe we are significantly better positioned today with a more flexible model, stronger margins and multiple growth levers to deliver sustainable long term value. With that, we'll open the call for questions.

OPERATOR

Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Thank you. Our first question is from Ryan Myers with Lake Street Capital Market.

Ryan Myers (Equity Analyst)

Hey guys, thanks for taking my questions first one for me. I just want to make sure I'm understanding this correctly, Kevin. The commentary you just gave us on gross margin for the second quarter, that's 60%, I assume that adjusted gross margin and there's none of the kind of tariff inventory related impacts that we saw in the first quarter here. And then if so, what are the main drivers of that roughly 100 basis points or so that you're seeing here from Q1 to Q2?

Kevin Grant (Chief Financial Officer)

Yeah, thanks for the question, Ryan. Yeah, so for the first quarter, just to recap that real quick, adjusted for all the one time impacts of the IEPA refund and the strategic inventory charge, it was a normalized 59% gross margin. And that's really the number I think we're trying to anchor on. From a long term perspective, that's where we think we can operate for Q2. You're right. The guide is 60% is a bit of a step up from that. And what that reflects is really no iba in the Q2 reflects the refund being taking effect as well as the current 10% section 122 tariffs that are still in place. It also reflects some headwinds we're seeing on inbound freight impacting the margins as well. So that's kind of how you bridge from that 59 to 60% for the back half of the year. Really no changes to what we previously discussed about gross margin. And as mentioned in the prepared comments, we're assuming that those duty rates will get back to the Supreme Court levels, which is what the administration has talked about.

Ryan Myers (Equity Analyst)

Okay, got it and then just on the revenue side of the business obviously performed well during the quarter and performing well enough to leave the guidance unchanged. So I'm just curious what you guys are seeing across your customer base and if you're seeing any impacts from just the sort of volatile macro environment that we've seen here the past couple of months.

Kieran Long (Chief Executive Officer)

Yeah, Ryan, you know, I think, excuse me. We are seeing some, you know, I would say some pressure on the consumer in US and Australia. But look, I think as we look across the business, you know, as of now Poly is having their best season from a grant perspective that they've had. You know, we are delighted that, you know, within a month of Petal opening their new shop showroom, they've 30 new accounts from a specialty retail perspective and I would say really just the progress we've made in with all the changes of moving the streetwear businesses onto that test repeat model, certainly seeing the best response we've ever seen from a product sell through and customer reaction there. So look, I think we feel good about the progress we've made really over the last number of years. Opening up new channels, opening up stores wholesale, increasing the overall tam. So feel good about where we are from as we head into Q2 and the rest of the year from a guidance perspective.

Ryan Myers (Equity Analyst)

Got it. Thanks for taking my questions.

OPERATOR

Our next question is from Dana Telsey with Telsey Advisory Group.

Dana Telsey (Equity Analyst)

Hi, good afternoon everyone and nice to see the progress as you think about the rising cost of energy. Where is it impacting your business? What have you seen how you're projecting going forward? And for the first quarter, did you see any difference between the beginning of the quarter, the end of the quarter in terms of conversion or traffic or sales? And then just us and Australia, how did both the regions do in the first quarter? And just lastly, are your Princess Polly stores, how much better than your plan are they opening up? Is there any similarities by region or what, you know, better what to look for in terms of stores now, size or anything like that? Thank you.

Kieran Long (Chief Executive Officer)

Yeah, thanks Dana. Let me kind of go through them one by one. I think look from input costs, you know, I would say we're seeing just a little bit on synthetic materials for us which is look a really, really small percentage of the business. We've seen a bit there recently with the change energy costs, you know, we are also seeing increased air freight, you know and look, air freight for us being on a test and repeat model is core to the business. You know, we will continue to use airfreight but we certainly Feel, you know, with the guidance that we've given all of those, you know, costs are contemplated in there. And look with all of the work we've done from the sourcing perspective, you know, and super work from the team really over the last 18 months were well able to kind of navigate our way through those, you know, from a pacing as we as we went through the quarter, we certainly saw a little bit of softness, you know, late in March that continued for us into April. We have seen improvements as we've gone as we've moved into May and through May. And look Phil, as we head into the back half of the quarter and rest of the year, you know, really feel kind of product is in a good position and where we stand from a customer go to market perspective and look, I would say just being able to navigate through all the tariff headwinds that we had last year, keep growing sales, keep growing ebitda, pay down debt, we certainly feel in good shape. From a region perspective, I would say we saw better growth in the US Compared to Australia. Australia consumer probably a little bit more pressured than the U.S. you know, I feel U.S. consumer is just certainly for us we feel quite resilient and like I mentioned a little bit of pressure in April but you know, got back at it pretty quickly. So you know, I think we will manage through both regions well and then from a store perspective, look, I'd say just really happy with the performance at the Poly stores and you know, they're all ahead of our payback periods forward profitable seeing really, you know, introducing us to new customers, you know, a halo effect from to the online business where we're opening stores. And I think we have learned a lot, you know, since we've been opening them on you know, from a size perspective and also I would say just the kind of regional differences from a merchandising perspective. So look, I think we're continuing to I suppose refine how we go to market in each one of the stores. Learning a lot I think still, you know, plenty opportunity for us to keep executing and upping the bar and getting more performance out of that channel for us.

Dana Telsey (Equity Analyst)

Thank you.

OPERATOR

Our next question is from Ashley Owens with Keybanc Capital Markets.

Ashley Owens (Equity Analyst)

Hi. Great. Thanks for taking our questions. So maybe just to start on AOV really quickly, I know that steps down and seems pretty consistent with what we're seeing across the broader apparel space. But as you look at 2Q so far, anything you'd highlight in terms of promotional intensity in the market and have you changed your own approach to promotions at all over the past few months. Yes. Thanks Ashley for the question. Yes, we saw AOV down a bit in the quarter, down 1% which really is just a reflection of some of the mix dynamics there. More importantly for us, we really saw a great customer active customer growth over 3% in the quarter and then orders growth of over 4% as well. We continue to see that strong order growth and customer growth continuing into Q2 and really not seeing too much of an impact on AOV as well. Kind of from a promotional perspective. We talked about the guide out there in gross margin that reflects the current market dynamics. We feel good about that. 60% reflects the current tariff rates in place as well as some of the impacts of the inbound freight, but nothing that I would remark in terms of significant changes to the overall promotional environment.

Kieran Long (Chief Executive Officer)

Got it. Okay. And then maybe just as a follow up. So on TikTok and the spending there, just curious as to how that compares to your historical digital acquisition costs. And as that continues to scale, how are you thinking about marketing spend more broadly? Yeah, I think, you know, TikTok has been a really interesting channel for us. You know, we are pretty active on it now across all four of the brands. I would say kind of all of them in slightly different stages. And look, that's across TikTok Live and TikTok Shop as we talked about, you know, Princess Polly now doing about 100 hours a week on TikTok live and minimal are also getting, you know, up there from that as well. I think what we see is, you know, it's really good from a reach perspective. Right. We're certainly seeing it introduce us to to more and more new customers. I think at the moment a lot of that's staying within the TikTok platform and kind of people transacting either in a TikTok live or on a TikTok shop. I think we are working through how do we flex and bring them back to our own direct to consumer site. So I think it's early for us. We're learning a lot. We're continuing to lean into the platform and you know, I think. And we'll continue to do that across the group.

Ashley Owens (Equity Analyst)

Great, thank you.

OPERATOR

Our next question is from Eric Better with SCC Research.

Eric Better (Equity Analyst)

Good afternoon. Congrats on a nice start to the year. Let's talk wholesale a little bit. When we look at Petal and Pup, what has been in terms of ability to expand categories beyond the core dresses, what are you seeing and what are the opportunities going forward on that wholesale side to drive even further beyond the dress business.

Kieran Long (Chief Executive Officer)

Yeah, thanks, Eric. You know, I think look, it's really been super impressive for what the Pedal and Pup team has done to, you know, leverage their direct to consumer business. The great product that they design and develop and open up all of these wholesale channels. And I would say really kind of, you know, are leading the group on what they're doing there. You know, not just Nordstrom where they've been now for a while and are executing really well, but also moving into Von Mower Dillard's and know what they're doing on the specialty side as well. I think we see tremendous opportunity there. I think it's interesting and we have seen and look particularly in Nordstrom where we've been in stores now for a 12 month period, the customers there are buying a different mix of assortment compared to the Petal and Pup direct to consumer websites. And you know that Nordstrom customer buying more tops, bottoms, separates. So really into much more category breadth there. I think, look, it really shows us some of the opportunity we have as we move into these other wholesale accounts, but also just on the direct to consumer business itself. And so I think, look, the Petal team is doing a great job and I think. But we see that there's just lots of opportunity as well to continue to build into that channel.

Eric Better (Equity Analyst)

You look at Princess Polly and the wholesale side, I know that's been a learning experience at Nordstrom. It looks like right now it's kind of getting to where it should have been, where you wanted it to be. What is the opportunity there? And when you have a store that have their own retail, Princess Polly and Nordstrom, does that make a difference in terms of the ability, what you see in terms of performance there?

Kieran Long (Chief Executive Officer)

Yeah, I think, you know, Poly is also, you know, like Petal has been in Nordstrom now for 12 months and you know, I think executing fantastically there. I think it's great as well, right, that both brands are in the trend section and they both have meaningful kind of floor presence, assortment, breadth inside Nordstrom and doing well. And you know, we have seen, you know, there's multiple locations where Polyhub now open stores, where they are also in Nordstrom, inside in the same mall. And you know, I would say from our perspective that that's working well. You know, they're both places are introducing us to more and more new customers. Right. Increasing the overall time of the brand. And that's really what we're focused on. Right where I would say very early on in the growth opportunities we have in these brands and for us, just getting our product in front of more customers, wherever they are, is really what we're all about.

Eric Better (Equity Analyst)

Okay, and how should we be thinking about. You mentioned about the opportunity with the DC in the uk. I know that the whole rest of the world segments are kind of a decliner because it really hasn't been the focus. Does this change the focus here? And is this now, do you look upon that as kind of an emerging growth opportunity going forward? Thank you.

Kieran Long (Chief Executive Officer)

Yeah, look, we've been executing into the uk, Europe and rest of world from our distribution center in the LA area. With that albaty, you've kind of slightly longer lead times and, you know, taxes due to checkout. Checkout complications for customers. We're delighted to get the DC open for Princess Polly first in the UK and that opened in March. Look, we're seeing a really nice response from customers. Better conversion rate, better repeat rate. So kind of early days there. We certainly see it as a, you know, the, the uk, Europe and rest of the world as a growth opportunity. We're going to lean into the direct to consumer side of it first, but certainly would expect it to follow the same kind of strategy as we've had in the US but as of right now and for 2026, it's very much direct to consumer.

Eric Better (Equity Analyst)

Okay, thank you.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.