Luvu Brands Reports Fiscal 2026 Results: Revenue Up 5.8% and Returns to Operating Profitability

Luvu Brands, Inc. (OTCQB: LUVU) announced its financial results for the fiscal year ended June 30, 2026, in a press release filed with the SEC on September 28, 2026. The company reported a net sales increase of 5.8%, bringing total revenue to $27.36 million for fiscal 2026, compared to $25.86 million in the prior year.

Revenue growth was driven by the Wholesale segment, which increased 8% to $19.06 million, supported by an expanded dropship network and higher demand from international and new customers. The Direct-to-Consumer segment grew 2% to $8.30 million, attributed to new marketing efforts for the Liberator, Jaxx, and Avana e-commerce websites.

On the cost side, the company achieved a significant expansion in gross margins. Gross profit rose 12.8% to $8.61 million, with gross margin expanding 200 basis points to 31.5%. This improvement was driven by cost reduction initiatives, including expanded raw material sourcing and reduced warehouse and production headcount, though these gains were partially offset by higher fuel, freight, and raw material costs related to the conflict in the Middle East.

As a result of these operational improvements, Luvu Brands returned to operating profitability. Operating income for fiscal 2026 was $876,000, a $945,000 improvement over the operating loss of $(69,000) reported in fiscal 2025. The company also reported a pre-tax income of $429,000, compared to a loss of $(448,000) in the prior year.

Non-GAAP Adjusted EBITDA more than tripled year-over-year, increasing 218% to $1.26 million. However, the company reported a net loss of $(246,000) for fiscal 2026, or $(0.00) per diluted share. This loss was impacted by a non-cash income tax provision of $675,000, largely consisting of a deferred tax provision of approximately $719,000 associated with right-of-use assets and property and equipment.

Liquidity improved significantly during the period. Cash and cash equivalents totaled $1.20 million as of June 30, 2026, an increase of 63.2% from $735,000 at the end of fiscal 2025. Net cash provided by operating activities was $773,000, a swing from the use of cash of $(410,000) in the prior year.