Koss Corporation Reports First Quarter Results
MWN-AI** Summary
Koss Corporation (NASDAQ: KOSS), a high-fidelity headphone company, reported encouraging first-quarter results for the fiscal year ended September 30, 2025. The company achieved net sales of $4.07 million, reflecting a significant increase of $868,910, or 27.1%, compared to $3.20 million during the same period last year. This growth was fueled by a major sale to a key customer in the education market and a robust 22.5% rise in sales within its direct-to-consumer (DTC) segment, despite a decline in European sales driven by a shift in order timings from major distributors.
Koss Corporation registered a net income of $243,729 in the first quarter, a remarkable turnaround from a loss of $419,535 in the prior year. Both the basic and diluted net income per share stood at $0.03, compared to a loss of $0.05 per share in the same quarter of the previous year. Gross margins also showed improvement, increasing from 36.6% to 40.0%, thanks to higher-margin DTC sales.
Despite challenges posed by tariffs on China-produced goods, which affected gross margins, the company noted that higher absorption of fixed manufacturing costs and a reduction in excess inventory reserves helped offset some impacts. Koss remains vigilant regarding tariff conditions due to its reliance on imported products.
As part of its growth strategy, Koss announced the promotion of Michael J. Koss, Jr. to Executive Vice President, reflecting his contributions to product development and leadership in enhancing the DTC segment. Koss Corporation markets a wide range of audio equipment including headphones and speakers, further solidifying its position in the high-fidelity audio market.
MWN-AI** Analysis
Koss Corporation’s first-quarter results for fiscal 2026 show a significant turnaround, with net sales rising by 27.1% year-over-year to $4.07 million, and a notable shift from a loss in the previous year to a net income of $243,729. This improvement is bolstered by strong sales in the education sector and a robust direct-to-consumer (DTC) channel, which surged by 22.5%.
Investors should take note of the company's enhanced gross margins, which improved by 340 basis points to 40%. This increase reflects a favorable customer mix and higher-margin DTC sales, indicating that Koss is effectively leveraging its brand to resonate with consumers. However, the company also faces challenges, particularly related to tariffs on products sourced from China, which could impact future margins.
Moreover, the announcement of Michael J. Koss, Jr.’s promotion to Executive Vice President suggests strategic positioning for sustained growth, particularly in product innovation and market expansion. His dual role in marketing and logistics might streamline operations and enhance efficiency, which could be beneficial in navigating the complexities of supply chain management, especially amid elevated tariff concerns.
In terms of market outlook, while the sales growth in Asian markets mitigates some declines in Europe, the overall reliance on international markets and current geopolitical conditions necessitate cautious optimism. Investors are advised to watch Koss’s adaptability to market dynamics, such as potential tariff adjustments and shifts in consumer demand.
Given these factors, Koss Corporation's stock could present an intriguing opportunity for growth-minded investors, particularly if the company continues to innovate and capture consumer interest in a competitive audio landscape. However, the potential risks from tariffs and international market fluctuations underscore the importance of vigilance in monitoring the company's operational strategies moving forward.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
MILWAUKEE, Wis., Oct. 30, 2025 (GLOBE NEWSWIRE) -- Koss Corporation (NASDAQ: KOSS) (the “Company”), the U.S. based high-fidelity headphone company, has reported its results for the first quarter ended September 30, 2025.
For the three months ended September 30, 2025, net sales of $4,070,778 were $868,910, or 27.1%, higher compared to $3,201,868 for the same three-month period in the prior year. Net income of $243,729 for the quarter ended September 30, 2025 compared favorably to a net loss of $419,535 for the first quarter of the prior fiscal year. Both basic and diluted net income per share for the three months ended September 30, 2025 were $0.03 compared to basic and diluted net loss per common share for the first quarter of the prior fiscal year of ($0.05).
“A considerable sale to our largest Education market customer, together with a 22.5% growth in sales in our direct-to-consumer (DTC) business, led the way to the overall first quarter sales success. While sales to Europe declined year-over-year, due mainly to our two largest distributors pushing re-orders to next quarter, sales to the Asian markets came in strong, making up some of the export shortfall,” Michael J. Koss, Chairman and CEO, said today. “DTC sales benefitted from new product launches in addition to new colorways of products launched in the prior fiscal year.”
Koss went on to note that gross margins improved by 340 basis points in the first three months of fiscal year 2026 compared to the same period last year, moving from 36.6% to 40.0%, primarily due to a favorable customer and market mix, namely a higher volume of higher margin DTC sales.
Additionally, Koss stated, “While the Company experienced an adverse impact on gross margins related to the sale of product brought in at the highest 145% tariff on China-produced goods, higher absorption of fixed manufacturing costs and a reduction in the amount of reserve added for excess and obsolete inventory when compared to the first quarter in the prior fiscal year provided some offset. As an increase in tariffs could have a significant impact on the Company’s operations due to the Company’s reliance on products coming from China, the Company continues to closely monitor the tariff landscape and will act accordingly to minimize negative effects.
The Company also announced the promotion of Michael J. Koss, Jr. to Executive Vice President, in recognition of his significant contributions to the creation of new products, the growth of the Company’s direct to consumer segment, and his leadership in the enforcement actions related to the firm’s patented intellectual property. Mr. Koss will continue in his current role in Marketing and Product and add oversight of the sourcing and logistics team to his portfolio.
About Koss Corporation
Koss Corporation markets a complete line of high-fidelity headphones, wireless Bluetooth® speakers, computer headsets, telecommunications headsets, active noise canceling headphones, and wireless headphones.
Forward-Looking Statements
This press release contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “aims,” "anticipates," "believes," "estimates," "expects," "intends," "plans," “thinks,” "may," "will," “shall,” "should," “could,” “would,” "forecasts," "predicts," "potential," "continue," or the negative of such terms and other comparable terminology. These statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual events or results may differ materially. In evaluating forward-looking statements, you should specifically consider various factors that may cause actual results to vary from those contained in the forward-looking statements, such as general economic conditions, inflationary cost environment, supply chain disruption, the impacts of public health events, such as pandemics, geopolitical instability and war, consumer demand for the Company's and its customers' products, competitive and technological developments, foreign currency fluctuations, and costs of operations. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances or new information. In addition, such uncertainties and other operational matters are discussed further in the Company's quarterly and annual filings with the Securities and Exchange Commission.
| KOSS CORPORATION | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| September 30 | ||||||||
| 2025 | 2024 | |||||||
| Net sales | $ | 4,070,778 | $ | 3,201,868 | ||||
| Cost of goods sold | 2,442,086 | 2,028,942 | ||||||
| Gross profit | 1,628,692 | 1,172,926 | ||||||
| Selling, general and administrative expenses | 1,674,732 | 1,810,059 | ||||||
| Loss from operations | (46,040 | ) | (637,133 | ) | ||||
| Other income (expense): | ||||||||
| Interest income | 293,128 | 220,358 | ||||||
| Interest expense | (599 | ) | — | |||||
| Total other income, net | 292,529 | 220,358 | ||||||
| Income (loss) before income tax provision | 246,489 | (416,775 | ) | |||||
| Income tax provision | 2,760 | 2,760 | ||||||
| Net income (loss) | $ | 243,729 | $ | (419,535 | ) | |||
| Income (loss) per common share: | ||||||||
| Basic | $ | 0.03 | $ | (0.05 | ) | |||
| Diluted | $ | 0.03 | $ | (0.05 | ) | |||
| Weighted-average number of shares: | ||||||||
| Basic | 9,456,438 | 9,310,002 | ||||||
| Diluted | 9,537,817 | 9,310,002 |
| CONTACT: | Michael J. Koss |
| Chairman & CEO | |
| (414) 964-5000 | |
| mjkoss@koss.com |
FAQ**
What specific strategies did Koss Corporation KOSS implement to achieve a 27.increase in net sales compared to the previous year, particularly in the education market and direct-to-consumer segments?
How does Koss Corporation KOSS plan to mitigate the potential impacts of increased tariffs on Chinese goods, considering its reliance on imported products for its manufacturing processes?
Can Koss Corporation KOSS provide insights into the factors that contributed to the 340 basis point improvement in gross margins during the first quarter of fiscal 2026 and the expected sustainability of this trend?
With the promotion of Michael J. Koss, Jr. and his new responsibilities, what are Koss Corporation KOSS's future plans for product development and strategic sourcing to enhance competitive positioning in the high-fidelity audio market?
**MWN-AI FAQ is based on asking OpenAI questions about Koss Corporation (NASDAQ: KOSS).
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