Shares of Koss Corporation KOSS have declined 2.9% since the company reported its earnings for the quarter ended June 30, 2025. This compares to the S&P 500 index’s -0.2% change over the same time frame. Over the past month, the stock has moved 14.8% compared to the S&P 500’s 2.3% change, reflecting higher volatility in investor sentiment surrounding the audio equipment maker.
Koss incurred a fiscal fourth-quarter 2025 loss per share of 2 cents, wider than 1 cent in the corresponding quarter last year.
Net sales of $3.1 million denoted an improvement of 6.6% from $2.9 million in the year-ago period. Despite this revenue growth, the company incurred a net loss of $0.2 million, wider than the prior year’s $0.1 million loss.
Koss Corporation Price, Consensus and EPS Surprise
Koss Corporation price-consensus-eps-surprise-chart | Koss Corporation Quote
Fiscal 2025 Update by Koss
Revenues rose 2.9% to $12.6 million from $12.3 million, while the net loss narrowed slightly to $0.9 million from $1 million. Loss per share narrowed marginally to 9 cents from 10 cents.
Strong Export Growth of Koss Offsets Domestic Weakness
Koss attributed its quarterly revenue increase largely to a nearly 49% surge in export market sales, with its two largest European distributors more than doubling their orders, driven in part by new product introductions. Direct-to-Consumer sales also rose approximately 18% year over year, supported by enhanced advertising and online engagement.
However, these gains were partly offset by lower sales to domestic distributors and e-tailers. Management cited excess inventory of non-Koss products among domestic partners as a key challenge. A delay in budget approval also contributed to reduced sales to the education sector.
KOSS Management’s Commentary Highlights Strategic Shifts
Chairman and CEO Michael J. Koss emphasized the company’s evolving focus toward international and DTC markets. He noted that DTC sales now constitute nearly a quarter of the company’s total annual revenues, rising 16.5% year over year. New product launches, paired with targeted online advertising and webpage optimizations, were credited for the channel’s growth.
On the export front, the CEO acknowledged that gains in Europe and Asia were partly fueled by increased traction among new and existing customers, particularly OEMs in Asia. While the company was encouraged by these trends, it remained cautious about several macroeconomic challenges.
Headwinds and Margin Pressure Loom
Despite an improved gross margin in fiscal 2025 — attributable to a favorable product mix and higher-margin new products — Koss acknowledged the threat posed by recently imposed tariffs on Chinese imports. These are expected to erode margins as existing inventories are sold through.
Logistics costs also remain an operational concern. However, the company expressed optimism that freight expenses would stabilize in the upcoming quarter due to its partnership with a dedicated freight provider.
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This article originally published on Zacks Investment Research (zacks.com).