Luvu Brands Reports Slight Revenue Decline and Improved Net Loss for Third Quarter

Luvu Brands, Inc. reported its financial results for the three and nine months ended March 31, 2025, revealing a slight decline in revenue compared to the previous fiscal period. For the third quarter, the company generated net sales of $5.846 million, a decrease of 1% from $5.923 million in the same period last year. For the nine-month period, total sales were $18.787 million, down 0.3% from $18.835 million. The company experienced a net loss of $88,000 for the third quarter, an improvement from a loss of $94,000 in the prior year, while the nine-month net loss narrowed to $105,000 from $191,000.

The company's gross profit margin for the third quarter decreased to 27% from 28% year-over-year, with gross profit amounting to $1.603 million, down from $1.639 million. Operating expenses remained consistent at approximately 27% of net sales, totaling $1.604 million compared to $1.600 million in the prior year. The reduction in net loss was attributed to decreased interest expenses, which fell to $87,000 from $133,000, primarily due to a reduction in notes payable.

In terms of product performance, Luvu's Liberator brand saw a 12% increase in sales, reaching $3.869 million, driven by stronger online sales. Conversely, Jaxx product sales decreased by 19% to $1.145 million, impacted by increased competition from low-cost international manufacturers. Avana sales also fell by 24% to $518,000, affected by production constraints and competitive pricing pressures. The company is reallocating marketing funds to support its more profitable brands while focusing on expanding its online drop ship business.

Operationally, Luvu Brands reported an increase in cash and cash equivalents to $1.110 million as of March 31, 2025, compared to $1.073 million a year earlier. The company’s total current assets rose to $6.124 million from $5.517 million, while total liabilities increased slightly to $6.324 million from $6.301 million. The company’s employee headcount remained stable, and it continues to focus on strategic initiatives to enhance its market position, including sourcing raw materials from lower-cost suppliers to mitigate the impact of tariffs.

Looking ahead, Luvu Brands anticipates ongoing fluctuations in operating results due to market conditions, competition, and economic factors. The company is committed to improving its operational efficiency and exploring new business opportunities to drive growth. Management remains cautious about the potential impact of rising tariffs on raw materials and is actively seeking to manage costs while maintaining product quality and customer satisfaction.