Koss Corporation reported financial results for the first quarter ended September 30, 2026, showing a significant drop in revenue and a return to a net loss.
Net sales for the quarter were $3,094,078, representing a decline of $976,700, or 24.0%, compared to the same period in the prior year. This decrease was attributed to the absence of a significant custom order for an Education customer’s new product launch that shipped in the first quarter of 2025.
Despite strong sales to certain domestic distributors, the company recorded a net loss of $234,168 for the quarter. This compares to net income of $243,729 in the prior year. The loss per common share was $0.02 for both basic and diluted shares.
The company’s gross margin declined by 50 basis points to 39.5% in the first quarter of fiscal 2027. The decline was caused by fixed manufacturing overhead absorption on a lower sales base, coupled with higher freight rates due to general rate increases and peak season surcharges. These factors were partially offset by a favorable customer mix and a $76,000 tariff refund.
Direct-to-consumer sales now account for approximately 37% of the company’s total turnover. European distributor sales were reported as being on par with the prior year, supported by inventory replenishment orders.
