r/KOSSstock

Koss Corporation Reports Third Quarter Results

 

Milwaukee, Wisconsin: Koss Corporation (NASDAQ: KOSS) (the “Company”),  the U.S. based high-fidelity headphone company, has reported its results for the third  quarter ended March 31, 2026.

 

For the third quarter ended March 31, 2026, net sales of $2,824,763 were up $43,757, or 1.6%, over $2,781,006 of net sales for the third quarter of the prior year. A net loss of $546,587 was generated for the three months ended March 31, 2026 compared to a net loss of $316,742 for the same period in the prior year. Basic and diluted net loss per common share for the third quarter of fiscal year 2026 was $0.06 compared to basic and diluted net loss per common share of $0.03 for the same three-month period one year ago.



Net sales for the nine months ended March 31, 2026 were $9,756,920, up $216,960, or 2.3%, versus net sales of $9,539,960 for the comparable period in the prior year. The net loss of $868,265 for the first nine months of fiscal year 2026 was higher by $226,130 over the net loss of $642,135 for the first nine months of the prior fiscal year. Basic and diluted net loss per common share was $0.09 and $0.07, respectively, for the nine months ended March 31, 2026 and 2025.



“Strong sales to our domestic distributors, coupled with a significant custom sale into the Education market earlier in the year, really drove the increase in sales over the prior year. Unfortunately, sales to our European markets have slowed significantly as a result of extended stock replacement cycles  driven by broader, economy-wide declines in consumer confidence and reduced sales expectations,” Michael J. Koss, Chairman and CEO, said today. “Direct-to-consumer (DTC) sales have contributed significantly to overall sales growth, achieving a 23% year-over-year increase, and now constitutes the Company’s largest segment.”



Koss further stated, “Profitability lagged behind prior year with gross margins falling from 38.4% during the first nine months of the prior year to 35.5% for the comparable period in fiscal year 2026, a decline of 290 basis points.  The negative impact of the continued sell-through of inventory manufactured in China and tariffed at the early, higher rates, as well as sales of inventory brought in at higher freight rates, were the main factors behind the margin erosion. A favorable customer mix of higher margin domestic distributor and DTC sales helped to offset some of the adverse impacts.”