Digital Brands, a curated collection of digital-first lifestyle brands, has reported significant revenue growth in the first quarter (Q1) of the fiscal year 2022 (FY22).
The group’s net revenue grew by 740% year-over-year (YoY) to $3.4m compared with $0.4m in the corresponding period of the prior year.
Its gross profit margin for Q1 rose by 671% to 42.9% against -50.8% a year earlier, while its gross profit increased by $1.7m, driven by improved gross margins across all its brands.
For the three months to 31 March, Digital Brands reported a net loss attributable to common stockholders of $7.8m, or $0.59 for each diluted share, compared with a net loss of $3.0m, or $4.55 to a share.
The company’s Q1 net loss consisted of non-cash expenses associated with a change in the fair value of contingent liabilities and amortisation of loan discount and fees of $3.0m.
Digital Brands Group CEO Hil Davis said: “Our first-quarter results reflect another quarter of meaningful improvement in our business results.
“We continue to drive significant revenue growth year-over-year. In fact, based on our current wholesale orders for this summer and fall, we believe that we will continue to experience strong year-over-year revenue growth.
“This revenue growth is creating leverage on our fixed costs. We believe that we will benefit from this revenue growth in the fall to fully leverage our fixed costs.”
Based in Delaware, US, Digital Brands offers a wide range of apparel through various brands on both a direct-to-consumer and wholesale basis.
The company operates a business model based on its founding as a digitally native-first vertical brand, sourcing products directly from third-party manufacturers and selling them directly to end consumers.
Earlier this month, Digital Brands closed an underwritten public offering of more than 37 million shares of its common stock for $0.25 a share.