US-based apparel retailer Digital Brands Group (DBG) has reported revenue of $3.4m for the third quarter (Q3) of fiscal 2022 (FY22), up by 58.3% from $2.2m in the same period of the prior year (FY21).
The company’s gross profit margin for the three months to 30 September was 48.3%, down by 7.6% from Q3 2021.
DBG said its gross profit margin was negatively impacted by 5.1% because of the accounting treatment of deferred revenue, as well as the negative impact of price increases on its production expenses.
The company recorded a $2.6m loss from operations for Q3 2022 against $7.9m a year earlier, representing a $5.3m decline over the year.
Net loss attributable to DBG’s common stockholders was $4.9m, compared with $8.9m in the prior-year quarter, while its net loss per diluted share was $9.26, against a net loss of $75.83 a year earlier.
The company’s sales and marketing expenses during the quarter were $1.2m, representing 35.8% of its revenues, against 60.4% in Q3 2021.
Digital Brands Group CEO Hil Davis said: “We are pleased to announce that we delivered strong revenue growth and continued operating leverage on our fixed costs in the third quarter.
“We also reduced our debt significantly during the quarter, which allows us to factor our wholesale purchase orders.
“This enables us to transition to a positive working capital cycle from the negative working capital cycle we have historically operated our businesses.
“Additionally, we launched the Bailey shop in October, which is a single e-commerce destination that features all our brands.
“We have experienced strong results and consumer trends since we launched this multi-brand site.
“We believe this shows the power of our initial vision and business model and sets a strong foundation to which we can add additional brands, like Sundry, as we bring them into our portfolio.”