AKA Brands has reported a double-digit sales drop in Australia and New Zealand, citing a challenging trading environment.

The company is headquartered in the US, but three of its four brands – namely Culture Kings, Princess Polly and Petal & Pup – are Australian-founded.

For the second fiscal quarter, which ended on June 30, sales in ANZ slid 13 per cent to $56.3 million. Management said performance in the region was pressured by a challenging macro backdrop and a tough prior-year comparison from the clearance of non-go forward goods. 

Sales in the US rose 2.1 per cent, while other markets posted a 50.5 per cent uplift. These increases could not entirely offset the decline in ANZ, as the company’s overall sales remained down 0.3 per cent.

The company saw a healthier bottom line during the quarter, with net loss narrowing from $5.1 million a year ago to $283,000 and adjusted EBITDA growing 16 per cent.

“We also ended the quarter with our strongest balance sheet since becoming a public company, providing increased flexibility to invest in both growth and profitability,” said CEO Ciaran Long.

He added that quarter-to-date momentum has accelerated in all regions, with overall net sales growth in the high-single-digits alongside healthy margins.

For the full year, the company expects sales to increase approximately 4.1-5.8 per cent and adjusted EBITDA to grow 25-33 per cent.