Luvu Brands Reports First Quarter Fiscal 2026 Results

Introduction

Luvu Brands, Inc. (OTCQB:LUVU), headquartered in Atlanta, has announced its financial and operational results for the first quarter of fiscal year 2026, which concluded on September 30, 2025. The company reported a modest increase in net revenue along with notable improvements in gross margin.

Financial Performance

For the quarter ended September 30, 2025, Luvu Brands achieved net revenue of $5.84 million, a 1% rise from $5.76 million in the same period last year. Gross profit also increased to $1.66 million, up from $1.52 million, leading to an improved gross margin of 28.4%, up from 26.3%.

This margin enhancement primarily stemmed from reduced unit costs following successful renegotiations of sourcing contracts and efforts to diversify suppliers. These strategies helped the company mitigate tariff exposure and secure more favorable pricing.

Despite the positive revenue figures, Luvu Brands posted a net loss of $131,000, which shows a significant 38% improvement compared to the loss of $210,000 recorded during the same quarter in the previous fiscal year. The company's adjusted EBITDA was reported at $82,000, reversing a small loss from the prior period.

Operational Insights

Luvu Brands continued to enhance its operational efficiency through tighter cost controls and strategic sourcing decisions, allowing the company to navigate macroeconomic challenges effectively. Inventory levels increased to $3.81 million, positioning the company to meet expected seasonal demand as well as new product launches.

Cash and cash equivalents rose to $818,000, also indicating positive operating cash flow during the quarter amounting to $80,000. This boost suggests an improved liquidity position which is crucial for funding ongoing operations and future initiatives.

Strategic Focus

Looking ahead, Luvu Brands remains committed to expanding its distribution channels and enhancing its range of product offerings. By focusing on high-conversion marketing strategies and adapting to changing consumer preferences, the company is seeking to bolster its competitive standing in the consumer lifestyle market.

CEO Louis Friedman expressed optimism regarding the quarter's results, emphasizing the company's dedication to maintaining strong operational execution and shareholder value amidst current economic uncertainties.

Key Takeaways

Luvu Brands reported Q1 fiscal 2026 net revenue at $5.84 million, a 1% increase from the previous year.

Gross profit reached $1.66 million, with gross margin improving to 28.4% due to reduced sourcing costs.

The net loss narrowed to $131,000, marking a 38% improvement year-over-year.

Positive operational cash flow of $80,000 contributed to an increase in cash and cash equivalents to $818,000.

The company intends to enhance distribution, introduce new products, and improve manufacturing efficiency moving forward.