Oct 14, 2026 earnings call — Turnaround progress, product intros and IT improvements
Sales decline narrowed to 11% in Q2, with net revenues of $4.1 million.
Revenue $0.0B (est $0.1B) · EPS $-0.19 (est $0.41)
Key quotes
"During the second quarter, our sales decline decreased to 11%."
"During the quarter, we were able to replenish some existing best-selling titles that were out of stock as well as introduce several new titles, both energizing our sales force."
Analyst Q&A 2
new titles, inventory, members, cash
Q (Igor Novgorodtsev · Lares Capital): The analyst asked what share new titles are of sales and of inventory, and what current inventory levels are. He also asked about active members trends, operating expense cuts, and how first-half cash flow can be called positive.
A: Management said new titles make up a relatively small share of sales but stimulate purchases and bring backlist sales along. Inventory fell from $37.7 million at the beginning of fiscal year 2027 to $34.9 million. They said Active Brand Partner count is almost 20% higher since the start of fiscal year '27, operating expenses were cut by $1.2 million including executive pay and staff reductions and a $15,000 per month warehouse saving starting in November, and first-half positive cash came from reducing inventory $2.8 million which was offset by $2.9 million of operating losses leading to a $100,000 cash decline so far; they expect cash to be higher after the fall selling season but would not give Q4 guidance.
"The percentage of new titles that go into actual sales of overall sales is actually relatively small." — Heather Cobb
Usborne inventory and channels
Q (Igor Novgorodtsev · Lares Capital): He asked whether Usborne will take back slow-moving inventory, give credits, or help move it through other channels. He also asked about selling through third parties or Amazon and about gross margins and promotions.
A: Management said conversations with Usborne are limited and Usborne does not typically take back titles, so they are not counting on returns. They said most Usborne titles are still sold and not on short-lived trends, they work with third parties who may sell on Amazon (they chose not to sell direct to Amazon), and while they still use promotions at times they plan to use discounts fewer and farther between to get back to full retail.
"Well, we have several years of inventory at current sales levels." — Craig White (CEO)