Shares of Koss Corporation KOSS have gained 0.2% since the company reported its earnings for the quarter ended June 30, 2026. This compares to the S&P 500 index’s 0.1% growth over the same time frame. Over the past month, the stock has declined 7.8% against the S&P 500’s 0.4% increase.
Koss reported fourth-quarter fiscal 2026 earnings of 5 cents per share against a loss of 2 cents per share a year earlier.
Net sales of $3.3 million indicated a 5.8% rise from $3.1 million in the year-ago quarter.
The company posted net income of $0.5 million, reversing the prior-year quarter’s net loss of $0.2 million.
Koss’ Gross Profit and Operating Performance Improve
Gross profit increased 79.1% year over year to $2 million from $1.1 million. Based on the reported figures, gross margin expanded to approximately 61% from about 36% in the prior-year quarter. Cost of goods sold declined to $1.3 million from $2 million despite the increase in sales.
Selling, general and administrative expenses increased 11.1% to $1.7 million from $1.6 million. Nevertheless, the improvement in gross profit more than offset the higher operating expenses, allowing Koss to generate operating income of $0.3 million compared with an operating loss of $0.4 million in the year-ago quarter. Interest income was relatively stable at $0.2 million.
DTC Sales Lead Fourth-Quarter Growth
Management said direct-to-consumer sales were the largest contributor to fourth-quarter growth, increasing 36.2% year over year. Strength was led by the Porta Pro wired and wireless headphone family. Sales through Koss.com increased 45.6% from the year-earlier period.
Sales to certain domestic distributors also remained firm, increasing approximately 12% year over year. However, European markets continued to post declines as distributors slowed inventory replenishment and maintained lower stock levels.
Tariff Refunds and Sales Mix Support Margins
One of the most significant factors affecting profitability was $1 million of tariff refunds received during the fourth quarter for previously paid import duties on products from China. Management said the refunds helped offset the adverse impact of tariffs paid during fiscal 2026.
Together with a favorable customer mix featuring higher volumes of higher-margin DTC and domestic distributor sales, the refunds helped lift full-year gross margin to 41.9% from 37.8% in fiscal 2025. Full-year sales growth was also supported by a custom headphone sale to a customer in the Education market, DTC demand driven by online marketing and social media campaigns, and stronger sales through portions of the domestic distributor network.
Fiscal 2026 Update
For fiscal 2026, net sales increased 3.1% to $13 million from $12.6 million. The full-year net loss narrowed to $0.4 million from $0.9 million, while loss per share narrowed to 4 cents from 9 cents. Full-year gross profit rose to $5.5 million from $4.8 million.
Other Developments
Koss reiterated its previously announced “diversification by acquisition” strategy, which management said is intended to reshape the company’s profile over the next five years by adding more predictable and recurring revenue streams.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Koss Corporation (KOSS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
