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Luvu Brands Reports Q2 FY26 Earnings: Net Revenue of $6.9 million

Luvu Brands, Inc.

Wed, February 18, 2026 at 5:50 AM GMT+9 8 min read

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**ATLANTA, GA / ACCESS Newswire / February 17, 2026 / **Luvu Brands, Inc. (OTCQB:LUVU), a vertically integrated designer, manufacturer, and marketer of consumer lifestyle brands, today reported financial and operational results for the second quarter of fiscal 2026, ended December 31, 2025.

Financial Highlights

Three Months Ended December 31, 2025:

**Quarterly revenue decline of 4.2%** to $6.88 million versus $7.19 million in Q2 FY2025, reflecting challenging consumer spending environment and retail market headwinds from low priced overseas competitors.

**Gross profit margin compression** to 26.1% from 27.6% year-over-year, with gross profit declining to $1.80 million from $1.98 million due to decline in revenue and increased costs related to import tariffs impacting cost of goods sold.

**Operating income positive** at $184,000 despite revenue headwinds, demonstrating operational resilience and cost management discipline.

**Net loss of $765,000** compared to net income of $192,000 in prior year quarter, primarily attributable to significant deferred tax provision of $813,000 related to future tax benefits

**Adjusted EBITDA** * of $145,000 versus $399,000 in Q2 FY2025, reflecting margin pressure but maintaining positive cash generation capabilities.

Six Months Ended December 31, 2025:

**Year-to-date revenue decline of 1.7%** to $12.72 million compared to $12.94 million in the same period fiscal 2025, reflecting consumer discretionary spending weakness.

**Six-month net loss of $897,000** versus net loss of $18,000 in prior year period, primarily driven by deferred tax provision and increased interest expense.

**Adjusted EBITDA of $227,000** for the six-month period compared to $395,000 in fiscal 2025, demonstrating continued positive cash generation despite challenging market conditions

Q2 FY26 Operational Performance and Market Conditions

During the second quarter of fiscal 2026, Luvu Brands navigated challenging macroeconomic headwinds including consumer discretionary spending weakness, cost pressures, and tariff impacts. Despite revenue decline and margin compression, the Company demonstrated operational discipline by maintaining positive operating income of $184,000 and generating positive operating cash flow.

Liquidity Position Strengthened. Cash and cash equivalents increased 47.8% to $1.09 million from $735,000 at June 30, 2025, reflecting disciplined working capital management and positive cash generation capabilities during challenging market conditions.

Total assets expanded to $11.14 million from $8.76 million, primarily driven by new operating lease assets for the current manufacturing facility. Christopher Knauf, the CFO of the Company, said “The extension of our manufacturing facility lease demonstrates our commitment to making products in the USA. We are confident that current manufacturing capacity will allow us to grow considerably with minimal capital investments.”

Story Continues  

Luvu Brands continues to navigate challenging macroeconomic conditions including consumer discretionary spending weakness, retail market headwinds, and persistent inflationary cost pressures across raw materials and logistics. The Atlanta-based consumer lifestyle brands company has maintained focus on operational efficiency, cost management discipline, and strategic initiatives to drive sustainable long-term growth and market share expansion.

Management remains committed to optimizing product mix, expanding omnichannel distribution networks, and improving gross profit margins through strategic pricing and operational efficiency initiatives. Louis Friedman, CEO and founder, commented “While we navigated challenging macroeconomic headwinds, we are committed to improving efficiencies, diversifying our product portfolio, and bringing new innovations to the market. We’re executing decisive cost management and revenue diversification strategies to strengthen our competitive position in the evolving consumer products marketplace.”

Strategic Growth Initiatives and Market Positioning

Looking ahead to the remainder of fiscal 2026 and beyond, Luvu Brands will continue prioritizing strategic investments focused on operational efficiency, developing high-margin products, omnichannel distribution growth, and strengthen customer loyalty. These strategic efforts are designed to improve gross profit margins, enhance EBITDA performance, and position the Company for sustainable long-term growth as macroeconomic conditions stabilize and consumer discretionary spending recovers.

Additional Information

Visit www.luvubrands.com for updates on events, press releases, and product launches. For investor inquiries, please contact Christopher Knauf at chris.knauf@luvubrands.com.

Company Contact:
Luvu Brands, Inc.
Christopher Knauf
Chief Financial Officer
770-246-6426
Chris.knauf@LuvuBrands.com

Forward-Looking Statements

Certain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company’s products in the market; the Company’s success in obtaining new customers; the Company’s success in product development; the Company’s ability to execute its business model and strategic plans; the Company’s success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the financial statements and related information contained in the Company’s Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examples of forward-looking statements in this release include statements related to new products, anticipated revenue, and profitability. The Company assumes no obligation to update the cautionary information in this release.

*Use of Non-GAAP Measures - Adjusted EBITDA

Luvu Brands management evaluates and makes operating decisions using various financial metrics. In addition to the Company’s GAAP results, management also considers the non-GAAP measure of Adjusted EBITDA. While Adjusted EBITDA is not a measure of performance in accordance with GAAP, management believes that this non-GAAP measure provides useful information about the Company’s operating results. The table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure. As used herein, Adjusted EBITDA income represents net income (loss) before interest income, interest expense, income taxes, depreciation, amortization, and stock-based compensation expense.

Financial Statements

Consolidated Statements of Operations (Unaudited)

Consolidated Balance Sheets

Consolidated Statement of Cash Flows (Unaudited)

Non-GAAP Financial Measures

Reconciliation of Net Loss to Adjusted EBITDA

SOURCE: Luvu Brands, Inc.

View the original press release on ACCESS Newswire

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