Luvu Brands Reports 12% Net Sales Increase to $6.5 Million for Q1 2026

Luvu Brands, Inc. reported a net sales increase of 12% for the three months ended March 31, 2026, reaching approximately $6.5 million, compared to $5.8 million in the same period last year. For the nine months ending March 31, 2026, net sales totaled $19.3 million, a 2.6% increase from $18.8 million in the prior year. The growth in sales was driven by a 19.5% increase in direct sales through branded websites, particularly from the Liberator brand, while wholesale sales saw an 8.4% rise in the same quarter, despite facing competition from low-cost international manufacturers.

The company's gross profit margin improved to 28% for the three months ended March 31, 2026, up from 27% in the same period last year, and remained stable at 27% for the nine-month period. This improvement is attributed to a favorable change in sales channel mix and better sourcing of raw materials, which helped offset rising shipping and tariff costs. Operating expenses for the three months were approximately $1.6 million, representing 25% of net sales, a decrease from 27% in the prior year, while total operating expenses for the nine months were $4.9 million, down 0.8% year-over-year.

Luvu Brands reported a net income of $174,000 for the three months ended March 31, 2026, a significant turnaround from a net loss of $88,000 in the same quarter of the previous year. However, for the nine-month period, the company recorded a net loss of $724,000, compared to a loss of $105,000 in the prior year, primarily due to a deferred tax liability related to a new operating lease. The company’s total assets increased to $11.2 million as of March 31, 2026, up from $8.8 million at the end of the previous fiscal year, driven by higher cash reserves and inventory levels.

In terms of operational developments, Luvu Brands has focused on expanding its distribution channels both domestically and internationally, which has been effective in mitigating adverse market conditions. The company has also made strategic investments in equipment through finance leases, totaling approximately $29,350 and $21,812 for new factory equipment. As of March 31, 2026, Luvu Brands had cash and cash equivalents of $1.2 million, an increase from $735,000 at the end of June 2025, reflecting improved cash flow from operations.

Looking ahead, Luvu Brands anticipates continued fluctuations in operating results due to various factors, including competition, seasonality, and changes in raw material costs. The company plans to leverage its improved sales channels and operational efficiencies to navigate these challenges. Management remains focused on maintaining profitability and exploring new business opportunities, although they acknowledge that additional funding may be required to support future growth initiatives.