a.k.a. Brands Holding Corp. (AKA) Q2 2026 Earnings Report, Transcript and Summary

Greetings, and welcome to the a.k.a. Brands Holding Corp. Second Quarter Fiscal 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce K.C. White, General Counsel. Please go ahead.

Good afternoon. Thank you for joining a.k.a. Brands to discuss our second quarter 2026. Before we get started, I'd like to remind you of the company's safe harbor language. Management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements, including when we refer to expectations, projections and other characterizations of future events, including guidance and underlying assumptions. Any forward-looking statement providing during this call, including projections for future performance, is based on management's expectations as of today. We undertake no obligation to update forward-looking statements, except as required by applicable law. These statements are neither promises nor guarantees and are subject to known and unknown risks and uncertainties that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statement. For a further discussion of risks related to our business, please see our filings with the SEC. Please note, we assume no obligation to update any such forward-looking statements. This call will also contain non-GAAP financial measures such as adjusted EBITDA and adjusted EBITDA margin. 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 it over to Ciaran.

Good afternoon, and thank you for joining us to discuss our second quarter 2026 results. In the second quarter, we generated net sales of $160.1 million, essentially flat to the prior year, while driving adjusted EBITDA growth of 16% year-over-year to $8.7 million, further validating that the structural improvements we've made across the business are enabling strong profit flow-through. We delivered on our growth expectations in both the U.S. and Rest of World geographies with net sales up 2% and 51%, respectively. The Australia and New Zealand region were the outlier with net sales there contracted approximately 13%, pressured by a challenging macro backdrop and a tough prior year comparison from the clearance of non-go-forward goods. Importantly, Q3 to date momentum has accelerated in all regions with overall net sales growth in the high single digits alongside healthy margins, giving us continued confidence in our outlook for the second half of the year. We're seeing clear proof points of success across both our women's and men's businesses, reinforcing that our strategic initiatives are resonating with customers and positioning us well for long-term growth. As I highlighted on our Q1 call, a.k.a. Brands is a fundamentally repositioned operating model anchored on profitability and durability. Our second quarter results are a clear reflection of that transformation with strong profit flow-through, driving adjusted EBITDA growth in the mid-teens. Our performance this quarter was driven by the expanded distribution of our brands across stores, wholesale and marketplace, the strengthening of our operational foundation and continued financial discipline across the business. We're off to a solid start in Q3, and I remain confident that 2026 will serve as another meaningful proof point that our strategy is working and our business is on a stronger trajectory. Reiterating our strategy, we've continued building out our omnichannel model beyond our direct-to-consumer routes. Princess Polly now operates 13 U.S. stores plus our first 2 Australian locations with more openings planned in both markets this year. As we announced this morning, Culture Kings is also expanding its store footprint in the U.S. with a signed lease for a new store in Puerto Rico and final negotiations for a major metropolitan opening later this year. At the same time, we are expanding our wholesale and marketplace partnerships, which are exceeding expectations, expanding brand awareness, attracting new customers and creating incremental growth opportunities. And behind the scenes, we've laid the operational groundwork for this expansion. Inventory has been well managed, driving more full price sell-through and improved inventory turns are giving us greater flexibility to invest in growth. That discipline has also enabled Culture Kings and mnml to further evolve towards a test and repeat merchandising model, which has been a multiyear initiative that is now showing up clearly in our margin improvement. As I previously mentioned, we also completed a full overhaul of our sourcing network in 2025, diversifying across geographies and vendors. That gives us a more resilient supply chain, one built to support test and repeat and to handle the current trade environment as we keep growing. Together, these initiatives have strengthened our financial model. We ended the quarter with our strongest balance sheet since becoming a public company, reducing our inventory by 14% and our debt by 8% versus the prior year and we ended the period with net leverage of 3.37x. This provides us with increased financial flexibility to continue investing in both growth and profitability. Looking ahead, 3 priorities remain: driving direct-to-consumer growth through differentiated product and marketing, expanding reach through retail, wholesale and marketplace and continuing to sharpen our operating model. We're also scaling our AI investment, already seeing early gains in imagery, marketing efficiency and inventory with more margin benefit expected over time. Turning now to our brand highlights. Princess Polly, our largest brand, delivered another strong quarter. The brand's expanding omnichannel presence continued to extend its reach beyond the successful direct-to-consumer model, driving growth across both new and returning customers with stores, wholesale and marketplace each making meaningful contributions. Princess Polly's 1,000 square foot pop-up at the Grove in Los Angeles, which opened in May, far exceeded our expectations, and we're excited to have made the Grove a permanent location. Princess Polly is on track to open 4 additional stores in the U.S. and 1 in Australia, all by year-end. Looking ahead to 2027, we plan to open as many as 10 new Princess Polly stores with 5 leases already executed in major trade areas, including Charlotte, Boca Raton, Nashville, Burlington and Jacksonville. Longer term, we see the potential for a minimum of 100 Princess Polly stores in the U.S. alone, up from a current fleet of 13 stores. As I mentioned, our sales growth of more than 50% in the Rest of World was another bright spot in the quarter. The largest driver was the U.K. distribution center that launched in March, which is delivering the customer experience we envisioned. The 2-day delivery window is transforming conversion with momentum compounding week-over-week. This confirms for us the tremendous growth opportunity we have for Princess Polly in the U.K. and internationally, which we will look to capitalize on over the coming years. From a merchandising perspective, Princess Polly enters the back-to-school selling season with an evolved approach that builds on its test and repeat model. Beginning this month and informed by strong customer feedback, the brand expanded its offering with deeper buys in core seasonal styles across denim, sweats and tops. This is designed to capitalize on peak selling throughout the season, both in stores and online. I want to be clear, though, test and repeat remains the core of Princess Polly's assortment strategy. What we're doing is layering in evergreen programs season after season in the categories where customer demand has proven durable. Taken together, these results underscore while global expansion of Princess Polly's addressable market remains a key strategic priority. Our smaller women's brand, Petal & Pup, continued to expand its wholesale and marketplace distribution in Q2. Nordstrom remains a productive partner with strong unit velocity and sell-through across dresses and casual styles in-store and online. Macy's was a notable Q2 callout and newly remains a strong growth partner with tops now the #1 performing category on the platform, reinforcing the strength of our expanding separates offering. Petal & Pup continues to build distribution of its expanding lifestyle assortment by adding more specialty wholesale partners. And during this quarter, it will take another important step, taking part in the specialty retail trade show Magic in Las Vegas, the largest wholesale trade show in the U.S. Looking ahead for Petal & Pup, we've intentionally pulled forward our product flow with fall launching in August and holiday in October, 4 to 6 weeks earlier than last year. This gives both our direct-to-consumer and wholesale partners a longer selling window heading into the back half. Petal & Pup is well positioned for the second half, and I'm confident in the white space runway and long-term trajectory of the brand. Turning now to our streetwear brands. Over the past several years, we strengthened the foundation of the streetwear business, and we're now applying the same omnichannel playbook that has driven success across our women's brands. We're expanding beyond direct-to-consumer through stores and wholesale while continuing to execute our disciplined full price test and repeat merchandising strategy. Customers are responding to improved product and a less promotional approach, driving strong sell-through. While sales were not at the level we expected for Culture Kings in Australia in the quarter, the business contributed meaningfully to the overall gross margin expansion. Culture Kings' experiential retail model, together with its portfolio of in-house brands that we have now transitioned to a test and repeat model, including mnml, Loiter and Carré, provide a strong foundation as we expand across new channels. Mnml's recent performance has been among the strongest we've seen from the brand with several key products achieving exceptional success in TikTok Shop and mnml now ranking as a top 5 brand in the men's category on the platform. Loiter will lean further into collaborations with their recent WrestleMania partnership and the upcoming Sonic the Hedgehog collaboration serving as great examples of how differentiated the Loiter brand is. And finally, in Q2, Carré launched their first global collaboration with Coca-Cola centered around the World Cup, and we're excited by Carré's product pipeline and future collaborations. The team's continued work expanding the in-house brand portfolio, curating third-party brands such as New Era, Adidas and ASICS and driving the strategic transition towards a more full-price test and repeat model sets the stage for meaningful profitable growth ahead. Marketing remains a key strength for Culture Kings. Brand activations, creator partnerships and exclusive collaborations continue to drive traffic, customer engagement and cultural relevance, reinforcing the foundation for profitable growth. Our men's brands are now on a solid footing to follow a similar path to our women's business, expanding reach through brick-and-mortar retail, wholesale partnerships and marketplaces. We're still early in this journey, but I'm confident that we're in a strong position to meaningfully grow our men's total addressable market. As I've mentioned, we signed a new Culture Kings store lease in Puerto Rico, and we're in the final negotiations for another opening in a major metropolitan market. We expect to have both new stores open in Q4 2026. These will be Culture Kings' first new U.S. store openings since 2022 and mark an important milestone in the brand's next phase of growth. New stores will draw on the learnings from our highest performing Australia locations as well as our highly productive and profitable Las Vegas flagship. In closing, our second quarter results reinforce that the operating model we've built is delivering. We posted double-digit adjusted EBITDA growth, positive operating cash flow year-to-date and our strongest balance sheet position since our IPO. The work we've put into go-to-market strategy, sourcing, inventory and channel expansion is translating directly into profit flow-through. Q3 to date trends have been strong, and we continue to make progress building out our omnichannel model, well underway in women's, just beginning in men's. Taken together, that gives me real confidence in both the back half of the year and the long-term opportunity across our brand portfolio. I want to thank our teams for their continued hard work and commitment. Our results are a direct reflection on their dedication to our brands and our customers. Before I turn it over to Kevin, I want to take a moment to note a change to our Board. Ilene Eskenazi has stepped down after many years of dedicated service. And on behalf of the entire company, I want to thank her for her contributions and counsel over time. I'm delighted to welcome Carrie Cassidy to the Board. Carrie brings deep expertise in talent and organizational leadership, having served as Chief People Officer of Restoration Hardware and held senior leadership roles at Levi Strauss, Barclays and First Data and currently serves on the Board of Thuma and Zio Mezzetta. As we scale our brands portfolio, her perspective on leadership and organizational performance will be a real asset to this Board. We're excited to have her on board. With that, I'll turn it over to Kevin.

Thanks, Ciaran. For the second quarter, net sales and adjusted EBITDA were in line with our expectations, with adjusted EBITDA growing 16%, reflecting continued execution against our full year plan. Let me walk you through the drivers. Net sales were $160.1 million for the second quarter compared to $160.5 million a year ago. On a constant currency basis, net sales declined 5.3%. By region, net sales in the U.S. increased 2.1% to $110.7 million. Net sales in the Rest of World increased 50.5% to $9.6 million, driven in part by the opening of our new U.K. distribution center. In the Australia and New Zealand region, net sales declined 13% to $39.8 million, where we're seeing consumers under increased pressure from the macro environment. Total orders were $2.04 million, down 0.5% year-over-year. Trailing 12-month active customers, excluding wholesale, increased 4.4% to $4.31 million compared to $4.13 million a year ago. And average order value was $78, consistent with last year. Gross margin increased 360 basis points to 61.1%. Let me provide some additional detail on our Q2 gross margin. The reported 61.1% rate did not include any IEPA refunds. Of the 360 basis points of year-over-year expansion, approximately 240 basis points related to lower year-over-year tariffs. The remaining expansion of 120 basis points was driven largely by our streetwear brands, a direct result of higher full price selling, partially offset by higher air freight costs. Our outlook, which I'll cover in a moment, assumes a gross margin of approximately 59% for Q3 and reflects current tariff rates and elevated air freight costs. Moving to selling expenses. Selling expenses were $47.8 million compared to $45.4 million a year ago. The increase was driven by higher in-store selling expenses as we continue to increase our retail footprint. As a percentage of net sales, selling expenses were 29.9% compared to 28.3% a year ago. Marketing expenses were $21.4 million compared to $19.9 million a year ago and 13.3% of net sales. General and administrative expenses were $27.5 million, flat with a year ago. Adjusted EBITDA increased 16% to $8.7 million in the second quarter, our highest quarterly adjusted EBITDA since Q2 2022, driven primarily by higher gross margin. This compared to $7.5 million a year ago. Our adjusted EBITDA margin grew 80 basis points to 5.5%. Turning to the balance sheet. We ended the quarter with $21.1 million in cash and cash equivalents compared to $23.1 million a year ago. During the quarter, we received substantially all of the $25.8 million in expected IEPA tariff refunds, which is reflected in our operating cash flow. Total debt at the end of the quarter declined 8.1% to $99.9 million from $108.7 million a year ago as we continue to focus on reducing our leverage and strengthening our balance sheet. Net leverage declined to 3.37x at the end of the quarter compared to 3.5x a year ago. We ended the quarter in a healthy position with $79.9 million in inventory, down $13.6 million from a year ago. Turning now to our outlook. We are pleased with our strong start to Q3 with net sales up high single digits and are confident in the strategic initiatives in place as we head into the back half of the year. We are reiterating our guidance for fiscal 2026. We continue to expect net sales to be between $625 million to $635 million and adjusted EBITDA of between $30 million to $32 million. For the third quarter, we expect net sales to be between $160 million and $164 million. As I mentioned, we expect gross margin of approximately 59% and adjusted EBITDA of between $8 million and $8.5 million in the third quarter. For modeling purposes, we expect to incur a onetime charge of approximately $3 million in Q3 related to a planned distribution center relocation that will be reported in selling expenses but excluded from adjusted EBITDA. For the full year, we anticipate fiscal 2026 stock-based compensation of approximately $6.5 million to $7 million, depreciation and amortization expense of roughly $20 million to $21 million, interest and other expense of approximately $16 million to $18 million, an effective tax rate of negative 10%, CapEx between $18 million to $20 million and weighted average diluted share count of approximately 11 million. In closing, we are pleased with our execution this quarter against our strategic plan. We believe we are well positioned to build on this momentum and continue delivering long-term value for our stockholders. With that, we'll open the call for questions.

[Operator Instructions] Our first question is from Ryan Meyers with Lake Street.

Congrats on the strong quarter. Just thinking about the unchanged revenue guidance, obviously, you guys are expecting to see some pretty significant momentum here in the second half of the year. And I know you faced some easier compares from last year's second half. But just walk us through maybe what you're seeing in the business right now? Is demand picking up? Is it maybe a continuation of what you saw in the first half of the year, just so as we understand kind of the strength in the second half of the year?

Yes. Thanks, Ryan. I think it is great to see that kind of we're now up high single digits as we kind of go through Q3. And I think, look, it's somewhat the performance, I would say, kind of certainly for U.S. and Rest of World that we started seeing as we saw kind of improving comps there and performance as we went through Q2. And look, with U.S. is running up double digits quarter-to-date, I think there's a combination of drivers there, right? I would say compared to this time last year, our inventory is just in a much better position and our inventory flows in a much better position. We certainly had a lot of challenges last year as we made such significant transition to our supply chain. We also have more wholesale partners, more marketplace, more distribution points, which continues to build there. And then look, from a store perspective, we have 7 more stores as we -- we'll end Q3 than we had last year. So obviously, some nice comp from there. And I think, look, one of the standouts of last quarter was that the performance that we saw in the Rest of World group and particularly kind of what we see happening from opening up that U.K. distribution center with Rest of World up over 50% in the quarter. So I think, look, there's a lot of strong momentum across the business. And I think great, like I said, to see us back at double-digit growth in the U.S. and high single digits overall.

Right, for sure. And then thinking longer term, you guys have said Princess Polly targeting at least 100 stores. So what are you seeing from the current store base in terms of productivity and paybacks that kind of gives you the confidence in that target longer term?

Yes. I think with 13 doors opened so far. So look, we're still early days on kind of the opportunity that we have. We'll do another -- look to do another 10 at least next year and then certainly see kind of 100 potential in the U.S. And I think, look, what we're seeing at the moment is the stores are introducing us to new customers. They also have a nice halo effect for the online business, and we just see really, really strong productivity. We're modeling the mall to have a payback of 2 years or less. And I would say we're seeing kind of better performance than that across the fleet. And I think, look, we're still early days. We're -- I think how we are evolving our approach to assortment being more evergreen. I think it's particularly helpful for the stores and excited to see how they perform now in the back-to-school season with more of that denim, fleece and tops inside there and just kind of really showing up in a strong way for their customers. So yes, I think we're just really excited about the opportunity.

Our next question is from Eric Beder with SCC Research.

Congratulations. Let's talk about Culture Kings. When we see the new stores coming into Puerto Rico in the metropolitan area, what's -- how can you compare and contrast that with what we're seeing -- what the stores were in Vegas and how you're looking upon kind of leveraging those?

Yes. I think, look, Eric, we are super excited that we will have another 2 stores open for Culture Kings in the U.S. before the end of the year, like I said, one in Puerto Rico and one in another major metropolitan area. I think the stores that we will open will be more in that kind of 4,500 to 5,500, 6,000 square foot size. So certainly smaller than Vegas. From a size perspective, I think it won't have some of the really big features that Vegas has. But I think we'll take a lot of learnings from the new Brisbane store that we have in Australia, how well that's performing and what we've learned from Vegas, right? I think it will very much continue to be, I would say, headwear, footwear core components of the store, but also really leading with our own first-party brands. And I would say, in particular, mnml, Loiter, St. Martha, American Thrift continue to have really strong performance. And I would say now kind of across the world as we bring in new product we're starting to see that and how it's a meaningful increase to the overall gross margin of the business, but we can also see on that newer product we're bringing in. In Australia and the U.S., it's growing double digits, even more growth from a gross margin dollar perspective. So I think it's going to be great to have some more doors open and really show off the Culture Kings brand to people.

And Australia, could you talk about a little bit more of the -- 2 things. One is you opened another Princess Polly store. How are the Princess Polly stores doing? And what's the potential for that? And second, what are you seeing economically that's kind of pausing kind of Australian growth after a very long period of positives there?

Yes. Thanks, Eric. Look, it was great that Princess Polly opened their second store in the Gold Coast area after the first one in Bondi Beach last year. And I would say, look, phenomenal success. The amount of traffic they got on that first weekend, and I would say kind of performance has continued to be really strong for the brand. The brand is obviously Princess Polly just really well established in Australia. This is the second store. So I would say that kind of that customer has been really waiting and longing to get in their feel and touch and feel the product. So I think, look, just super success there. I think longer term in Australia, we could certainly see a handful of maybe up to 10 stores. As a reminder, we've got 8 stores for Culture Kings in Australia. I think we'll continue to be predominantly a direct-to-consumer business down there, but certainly could see a handful of stores down there for Princess Polly. And then as it relates to the region itself, yes, like you mentioned, we had been on a nice period of seeing growth from the region. And look, the region was up 3.8% in Q1 and Culture Kings was pretty much flat comping. We certainly saw pressure there from a macro perspective, significant kind of fuel hikes, rate hikes. And I would say what we are seeing and have heard from other retailers is pretty similar, that kind of pressure degrading in June and into July. I would say, look, some of the bright spots for us are obviously seeing the stores in the region positive comping in July. It's great to see that. I think it's really showing the progress that we've made on resetting that business, getting the right product in there, moving past the older product and that newer stuff, as I mentioned, we are seeing double-digit comps on that product and even more from a gross margin perspective. So I think, look, all of that is pointing to us feeling that, that business is going to get back on track. We're making really good progress on doing that and gives us a lot of confidence to open new stores now in the U.S. for the brand as well.

Our next question is from Randy Konik with Jefferies.

I guess what I want to ask about is now with the announcement of Princess Polly thinking at least 100 stores, just I think it would be super helpful to understand how you think about, Grant, long-term penetration by channel, let's say, how you think about e-com versus stores versus wholesale of the broader -- of the entire kind of portfolio? And then can you give us some like high-level thoughts on how you think about margin contribution or overall margin by channel so we kind of think through how we think about overall long-term operating margins for the entire company? That would be super helpful.

Yes. I think it's certainly great the work we've done over the last couple of years, I would say, look, at the individual brands, but also across the group on really following that strategy of leaning into direct-to-consumer with product from a marketing perspective, but also opening up these new channels. And I think, look, we've learned a lot over the last couple of years from a store perspective, from a wholesale, from a marketplace, even from TikTok, I would say, over the last 12 months and the kind of the opportunity across them all, I would say, all have slightly different operating model. All have slightly different, I would say, economics from a -- more from a geography of gross margin, selling and marketing perspective. I think what we can see with them all, Randy, is, look, there's just a huge opportunity for us, right? We're really early on. And I think when we kind of put our product in front of customers, they are reacting to it really positively and giving us confidence to lean into these opportunities. I certainly think for -- if today, we had 100 stores for Princess Polly, I think with the halo benefit that we would get to the online business as well as how many more customers we'd introduced to the brand, you will still see that direct-to-consumer business being larger than stores. And then I would say that for us, then wholesale marketplace would be materially smaller than both of those opportunities as well, but still meaningful to the overall business. So I think probably for me, that mix longer term, I think majority still direct-to-consumer with stores next and then wholesale marketplace. And I think a version of that holds through certainly across the streetwear business and probably for Petal & Pup as well, although the timing of it might be a little bit different on that brand.

Got it. And then my last question would be, when I look at the cash flow statement in the press release, it looks like debt paydown exceeded CapEx on a 6-month basis. So maybe give us some perspective of how you're thinking, again, let's say, medium term about capital deployment to grow, let's say, Princess Polly units or stores and then versus your thoughts on debt paydown, like how do you think about that kind of interplay between CapEx utilization for stores and debt paydown? Super helpful.

Yes. Thanks, Randy. Yes, we finished the quarter, obviously, in a really great spot on the balance sheet, as we talked about. We did have the IEPA cash come in during the quarter, which was obviously great. The debt is down year-over-year 8% and our leverage is down both sequentially from Q1 and also year-over-year down to 3.3%. It will continue to be a priority for us to bring down debt, to generate cash, and we definitely see the potential to do that. If you kind of reflect back and look at the last 18 months, which smooths out some of the ins and outs of all the tariff noise, we've generated $35 million of operating cash and that we put $25 million to CapEx and $10 million to debt. So you can see that we have that track record of being able to fund the growth and then also to continue to bring down debt and to bring down the leverage, and that will certainly be a priority for us to chase the growth and also to do it in a healthy way from a balance sheet perspective.

Yes. And I would just add on, Randy. I think certainly from a -- it's great to see the progress on EBITDA, 16% growth year-to-date. It's up, I think, over 35% for the 6-month period versus last year. But look, we're still haven't seen the full benefit of the progress we're making on the streetwear business, right? It's great to see the margin up 120 basis points. And I think as we've talked about for a while now, customers would start first seeing the new product and really reacting positively to it. Great to see that. We see it in the financials and gross margin first, which we have now for the last couple of quarters. I think next, we'll start seeing it in increasing EBITDA, and then we'll really start seeing it from a comp perspective. And I think when that really kicks in at the level we kind of expect that it can, I think we'll continue to increase EBITDA, increase cash flow and increase our ability to lean into these growth opportunities that we have.

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

Nice to see the progress. On Princess Polly, the 100-store opportunity, I could definitely see that. As you think about the go forward and the expansion there, how many can you open a year? Are you seeing as you open more, are there -- whether it's cost to open, whether it's fixtures, is there leverage that you can get? And as you think about the store size and where you're going, is there different store sizes in different types of neighborhoods? And then at Culture Kings, any learnings from culture -- from Princess Polly about opening stores in the U.S. and what you should or shouldn't do? And then just on the retail stores part versus wholesale, how do you think of the margin structure of retail and wholesale?

Yes. Thanks, Dana. I think Gosh, look, I think we've learned a lot, I would say. It's -- I think we're super fortunate, right, with just the level of data that we have and how we can analyze where our customers are, customer frequency, customer white space that we have and how that lines up with different mall locations and opportunities that are there. For us, it's -- we can really kind of focus in on what are the right spots for us to open a store. And look, it's somewhat then around timing from a -- is there the size that we want and with the economics that we want. I think we're very much at this stage, looking for those kind of right spots, right locations, right economics for us rather than chasing a kind of particular store count. I do think, look, I'd love to do -- kind of would expect to do 10 stores next year for Princess Polly. That's a 50% increase year-over-year kind of to the overall fleet. And I think, look, as we continue to kind of refine how we're opening stores, we can accelerate that process as well. As it relates to the cost to open stores, I think, look, we certainly have been refining over these first 13 that we've opened the -- how the store should be laid out, what fixtures really make sense for us and for our customers with how they shop. So I think very early days on figuring out how we bring down the costs of store openings. And I would say that from a fixture perspective and just also kind of from the speed of opening. And I think, look, we are taking those learnings across to Culture Kings as well, right? We are not needing to rebuild systems, tools, processes as we open more stores for Culture Kings. So I think they'll benefit from some of the work that Princess Polly has done and will allow them to be more efficient and quicker with opening stores. And then just from a margin perspective, look, I would say that certainly from a gross margin perspective, obviously, kind of stores materially higher. From getting full price at retail and then just all of the margin there versus the wholesale. And then -- but obviously, you have higher selling expenses and some marketing expenses for stores rather than wholesale. So I think, look, you kind of blend out to, I suppose, EBITDA before G&A pretty similar across both channels. But obviously, you're getting that full retail from a store perspective.

Ladies and gentlemen, this concludes our question-and-answer session and does conclude today's conference as well. You may disconnect your lines at this time. Thank you again for your participation, and have a wonderful day.