Testing, testing. Good. Okay, so thank you guys for all being here today. Our next presenting company is AKA Brands, which trades on the NYSE under the ticker AKA. AKA is a portfolio of next-generation fashion brands for the next generation of consumers. Each brand in the AKA portfolio targets a distinct Gen Z Millennial audience, creates authentic and inspiring social content, and offers quality, exclusive merchandise. The company recently reported second quarter 2024 earnings. Net sales were up 9.5% year on year, and Adjusted EBITDA up 44% against the same period a year ago. So the business is coming off of a strong second quarter, indicating good demand for the AKA brand. Can we now play the intro video before I pass it over to Ciaran? All right, and now we have Ciaran Long, Interim CEO and CFO. Take it away, Ciaran.
Thanks, Alex, and thanks everybody for joining us today. I'm really happy to talk to you and looking forward to talking to you about AKA Brands. And I think that video there just does a really good representation of just how different these brands are, right? We are, you know, as we talk about, we are the next generation of fashion for the next generation of retailers, but just doing that in a very, very different way than other retailers are today. And I think that video just kind of brings to life how different the product is, how different we market the product, and we also combine that just with experiential retail in our stores to just really differentiate ourselves from other people that are out there.
You know, we do that today with four brands, two brands on the women's space, two brands on the men's space. Our largest brand is Princess Polly, focused, as Alex mentioned, on that millennial consumer. You know, predominantly, our brands are direct to consumer, but we are opening stores. We've opened the first store for Princess Polly last September, and we'll continue to expand their retail footprint this year. Next brand is up in the women's side, is Petal & Pup, a little bit, you know, an older consumer in that 25 to 45 year-old age. A little bit more accessible from a product perspective for that woman that's on, you know, a different, a different stage of life. And then on the men's side, two just really different brands.
Culture Kings is a retail brand that we have, and within Culture Kings, predominantly direct consumer, they've got eight or ten stores now. We opened their first store in the U.S. in October 2023, and that's just a really different store. It's in Las Vegas, in the Forum Shops. It's about 13,500 sq ft of retail space, you know, and with that, we do a lot of what we call retail-tainment, right? So that store has got a bar, which is really difficult to get in Vegas for a retail store. It's got a half basketball court. It's got a recording studio.
It's also got a secret room where you need to get special access to, and just really differentiating ourselves there from other retailers that are out there. And then Culture Kings sells a mix of third-party product and our own first-party product, right? So about 50% of the product that we sell there is third parties. You know, you could think of New Era, Under Armour, you know, all of those brands, but a lot of that product is still exclusive to us, so you won't find it in other places. And then about 50% of the product is first-party brands that Culture Kings have delivered themselves, so just really different there.
And then MNML, another one of our men's brands, focused again in that streetwear space, you know, and bringing that aspirational product to life, but at a more accessible price point in around that $80-$100. So let me talk a little bit about just how different we are and how we go about it. I'll touch on a couple of things here and go deeper on some of the future slides. You know, unlike traditional retail, you know, we are a diversified portfolio of direct-to-consumer brands but are starting to do more in other channels as well, be that on the store side or looking to lean into omni-channel as well. I think how we do it is also really important, right?
You know, we've predominantly exclusive product to us that you can't find somewhere else, and we marry that with being very much data-driven from a merchandising perspective. So for us, small buys, testing how they're working, and then if the product is working well, we'll buy back into them, and huge advantages there. Also very much social media-driven from a marketing perspective, and our brands have, I would say, really perfected that. And that allows them to just have much more authentic relationships directly with consumers and allows them to really stand out from the other people in the sector. And then from a technology and infrastructure perspective, very much an asset-like model. So all of our brands sit on Shopify and that ecosystem that they have.
You know, and that really allows us to test constantly, kind of best-of-breed software programs, software solutions that are out there. We can test them across each of the individual brands. If something's working well, we can roll it out across all of the brands. So let me go a little bit deeper, particularly on that test and repeat model. I think it's, you know, it really differentiates us from other people that are in the market. It's very new that there's not a lot of people doing it, particularly at our scale. So for us, we focus very much on trend fashion, and that's obviously just hugely important for that consumer, right?
With that, you know, each week we will roll out hundreds of new styles at each brand, but very small depth of buys in those, right? So not taking a lot of inventory risk. We can very quickly see the performance of each one of the new products that we're rolling out. If they're doing well enough, meeting our measures, or meeting our KPIs, we'll buy back into them and get them back in stock really quickly. So for us, you know, we're kind of if it's a new style, we'd probably go from design to, you know, on shelf and, you know, available on our website in kind of, you know, sixty to eighty days. We replenish back in about 45 days. So really quick development cycles with that.
And for us, with you know, you marry that to proprietary product that you can't get somewhere else, where it's our fit. You know, if someone is buying product from us, they know their size. It's the same size they will see across everybody else, all of the other products. Really allows us to have really strong gross margins, industry-leading return rates, you know, for the e-commerce sector. So our return rates across the group is about 20%, and so just significantly different than anybody else that you see out there. And really, that coming from proprietary product and that test and repeat model, and just allows us to have really strong margins. And then from a social media perspective, we do a huge amount with influencer marketing, right? But unlike others, there's...
We don't really go with any mega or huge influencers, right? We've got a huge number of smaller influencers. So at any one time, there's about four thousand plus influencers that we're working with and dealing with. So for us, we feel, you know, the smaller influencers much more authentic to the audience that our brands are trying to reach, right? They really understand them. Also, for us, you know, comes with less reputational risk of kind of leaning into any one influencer and a much better ROI as well, right? So, for each one of those influencers, you know, we will send them product to test, to try, talk about.
We'll also send them a code that they can share with their audience, and we can measure the performance of that code, you know, throughout the life cycle that it has with that influencer, as we look to sell product. And we're constantly evaluating, are we getting the right ROI? And if we're not, we will, you know, move on to another influencer, and you're constantly refreshing that group. And like I said, you know, you get better CACs with that, lower marketing rate, but you're really connecting with that kind of young consumer that we need to be on trend for. What we've done a lot as well over the last kind of twelve or eighteen months is just broadening the reach that we're looking for all of our brands, right?
We've done that by exploring new marketing opportunities, but also, you know, putting our products wherever our customers are, right, and that's allowing us to, you know, nice growth, and also build brand awareness for all of our brands, and then lastly, and I've talked a little bit already, just that next generation approach to operations, right, and I think, you know, the power of that Shopify ecosystem, you know, we're not spending on technology. You know, we don't have a big technology team. We don't even have a small technology team in-house, right. You're not, you know, dealing with technical debt really at any points, which, you know, is a big problem for traditional retailers.
It allows us to be much more agile, really lean into best-of-breed technology solutions that are out there and allows us, again, to be just really capital efficient, so a little bit about 2024 and so some of the growth initiatives that we've been going after, and I would say these, you know, really focused on these probably over the last 18 months and starting to see them come to life, I would say now in the financials in Q1 and Q2, so really, really nice to see the progress we've made there. You know, first one is just delivering on the innovative retail strategies that we have.
And I would say that's just on how we talk to customers, how we bring the brands to life, and doing that across all of the different, you know, platforms where these customers are, whether that's, you know, Instagram, TikTok, YouTube, whatever platform it is. It's been really interesting as we've kind of gone through that evolution. Other brands are changing how they talk about themselves, right? Whereas you think a couple of years ago on Instagram, very much static content, imagery. Now on TikTok, much more short form. You know, we're using a lot on TikTok, a lot of the internal teams that we have inside in the business, just talking about the product, how good it is, what differentiate it.
And just again, just being authentic for that audience we see is just hugely important for us, and allowing us to really expand these brands. Secondly, we've done a lot from an omni-channel perspective. I think, you know, we certainly feel, you know, D2C is a great model. Long term, we are gonna be predominantly a direct-to-consumer brand, but we also want to be where our customers are, right? So, we've opened Princess Polly's first store last year in Century City in LA, seeing great success from that. And in that store, about 40% of the customers buying from us in the store are new to the brand, right? So, you know, really nice that that's introducing new customers to Princess Polly.
For Petal & Pup is the first kind of led a bit of the charge on the omni-channel opportunity. So that brand is now on Nordstrom.com, it's on Macy's, it's on Target. Seeing super success there. And about 95% of the customers that we're getting on those platforms are new to the brand. And so great again to be introducing the brand to new customers. Doing it in a way that drives growth for us, is profitable, and we're also seeing a nice halo effect from that across the brand itself on our direct-to-consumer business. So we're gonna continue to lean into those opportunities.
And then obviously just, you know, I think in retail, obviously focused on operations is hugely important, whether that's for us, inventory management, how we run our fulfillment centers, constantly optimizing what we're doing from a shipping perspective. We've continued. I would say that's just a, you know, the day-to-day work that we do in the business. We've done a lot of work over the last eighteen months in those areas to constantly just make ourselves more and more efficient. And I think as we, as we start to see growth now, it's nice to see that coming through the P&L as well.
So as Alex touched a bit on, you know, Q2 results, you know, really good to see the progress there, up 9.5% overall from a sales perspective, but really glad to see the 19% growth in the US market, right? For us, obviously, US is by far our biggest growth opportunity. It's now 65% of our business. You know, three of the four brands that we have started in Australia, right? We're bringing them to the US, scaling them in the US. US market is 17 times larger than the Australian market, so we feel there's just huge opportunities for growth here.
And then great to see EBITDA up 44%, you know, and really just good leverage across, you know, all of the P&L as we kind of can take advantage of those operational efficiencies we've driven in the business. And we think, you know, we certainly have an opportunity to continue that growth, the growth in the US, but seeing our EBITDA and profitability grow faster than sales. You know, and obviously, as we're retailers, you know, inventory management just so important and crucial to, you know, the whole P&L. Nice to see that flat year-over-year gross margins up 86%, year-over-year while delivering that growth.
You know, I think we've talked sequentially. I think we will continue to be down on inventory dollars a little bit as we go through the back half of the year. We've certainly been tackling some... A Culture Kings brand isn't on the test and repeat model yet. We're moving it on to it, and we see continued kind of improvements for that as we do it. Look, strengthening our balance sheet has been a big focus area for us. We paid down $50 million in debt last year. We continue to look to pay down debt in the back half of this year. Obviously, we are from a capital perspective, you know, we are investing in more stores this year for Princess Polly.
We'll go to Culture Kings as well next year, but certainly not looking to be a highly leveraged business here, and I think that kind of management of our balance sheet just a key focus area for us, and then from a guidance perspective, you know, we've upped our guidance, you know, based on our Q1, Q2 performance. You know, we've got $560-$565 from a revenue perspective, you know, which is nominal growth year over year.
I would say at the moment, we're much more focused on ensuring that we have really solid EBITDA growth, and that's kind of where we want to continue to just show the strength of this portfolio and what we can really do, and just differentiating ourselves there from, I suppose, some of our past performance, but what other people in the sector are doing as well, and then look, from a long-term perspective, I think just huge opportunities across these brands, right? We're very focused on the U.S. and have been, you know, as we've looked to scale these brands here in the U.S. We're gonna open five new stores for Princess Polly this year, we'll look to open more and pretty much all those coming in the back half of the year.
We'll look to open more and continue to open stores for Polly next year and beyond. I think that brand just has tremendous opportunity for growth. You know, in the, Piper Sandler did a great survey focused on kind of upper-income teens in the past. Polly has been, you know, pretty much usually in the top 10 brands from women's fashion apparel. And interestingly, I would say until Shein came along, was the only brand without stores on that list, right? So I think just tremendous what they've been able to do from a direct-to-consumer perspective, but I think a lot of opportunity for them to grow as well. And then obviously, Culture Kings, we've seen great success with their first store in Las Vegas. We will continue to open Culture Kings stores.
You know, it's finding the right location is obviously important for us. It takes time. You know, I would say we are with it just being super selective. You know, and then also, I think, huge opportunity for us from an international perspective. You know, very focused on the U.S. at the moment. We are starting to. You know, we see demand for all of the brands internationally, just organically coming to us. We are looking to do some work from an operations perspective, from a marketing perspective, just to test more some of these markets and see what we do. But I would say more from a kind of a FY 2026 and beyond perspective. You know, we'll be more focused on testing there in the next twelve or eighteen months.
And then, obviously, we will look to get back to acquisitions. As I mentioned, we've bought these four brands, you know, and doing a really good job of scaling them in the US. We will look to get back to acquisitions. I would say pretty fussy of who we want to let into the group, right? All of these brands make money, generate cash. They all have an operating model, a financial model that... where they're very, very disciplined and really can, you know, deliver on the results we need. So I think, you know, that's a fairly high barrier for other brands to come in. But certainly we feel there's opportunities out there, and opportunities of brands that we can help scale and grow quicker. So let me touch on...
Let me touch quickly on a couple of the brands, and then we. I just want to make sure I leave time for Q&A. So Princess Polly, as I talked about, really focused on, you know, on-trend, accessible price point, and doing it in a sustainable way. Sustainability is very big for Princess Polly. They've done a lot of work in the area, really differentiating themselves and very much not, you know, a fast fashion brand. The quality of the product is really strong here, and that's why they continue to have such great performance, customer retention, and just people very, very excited about the brand. Petal & Pup, as I mentioned, a little bit older than the Polly consumer.
A little bit more feminine, you know, about going out, being out, and really dressing the woman for different occasions in their life, and they're kind of on to a different stage of life than Polly. You know, we brought the brand into the U.S. a couple of years ago. You know, put them on Nordstrom super late last year. Now one of the better-selling brands on Nordstrom.com, and I think we're really gonna lean into that success over the next couple of years. Culture Kings, it's hard to bring to life how different Culture Kings is from a retailer. You know, that focus on that streetwear space, more of the male consumer, you know, in that eighteen to thirty-five-year-old.
You know, and huge headwear business, so kind of dressing them, you know, head to toe, footwear, footwear as well and, and everything in between. And really, the, you know, Culture Kings are that mix of, you know, music, sports, fashion, art, and, and doing that really in their store, on their website, and, and just bringing it to life then in their marketing channels. So in the. You see kind of the, one of the bottom ones there, some of the McLaren apparel that we did last year at the Formula One Grand Prix. So we actually had, a McLaren Formula One car in the store for a week, McLaren simulators. Lando Norris came in for an event that we had in the store, and we developed products in collaboration with McLaren, Mitchell & Ness, that you could only get at Culture Kings.
We've had a UFC octagon in the store with people kind of working out, getting ready for a world championship fight. We've had a boxing rink in there for some world champions working out, who also collaborated with us on product. Multiple music events, you know, leveraging the music studio that we have. And again, just really focused on that kind of retail-tainment and not just kind of selling product, but also selling just emotions and being connected with that Culture Kings brands. And then MNML, you know, it's the last acquisition that we did, really focused on the more premium streetwear or kind of inspired by that, you know, but selling it at a much more accessible price point. What's really interesting about this brand is...
and you can see there Jayson Tatum up on the right, the basketball player. We've had a huge amount of sports stars buying MNML, just buying it themselves, wearing the product, wearing it as they go into these tunnel fits, coming in and out of games and talking about the brand. You know, and this is product that they're buying for $80-$100. You know, it's not the super premium that they could buy. So just really, I think, shows how different the product is, how on-trend it is, but also that they're doing that with such accessible price point product really shows kind of how the brand is different. And I think, you know, we sell MNML. It sells direct itself. It sells on Culture Kings. It's one of the top-performing brand on Culture Kings.
It's, I think, the top three brand in the Las Vegas store, and again, just I think showing the opportunity that we have here across all the brands. So that's it for me. Happy to take questions. Sure. Yeah, I joined the brand in April twenty twenty-one. Jill Ramsey was the CEO. She was someone I'd worked with for a long time. We've worked together at Walmart. She had a, you know, a medical condition that required that she step back. With that, I stepped into the interim role and have, you know, continued in the role since. Look, I think the board is actively looking for somebody. I'm part of that process with them.
I think, you know, I've told them, "Look, I'm very happy in the role, not particularly worried about what you're calling me." I think, you know, focused on the success of this business, and if there's somebody better to come in and run it, I'm happy to go back to being CFO. Okay, super. Thanks, everybody.