We are reiterating our Buy rating, $30 price target and projections for a.k.a. Brands as we look at key trends for 2HFY25 and beyond. We believe, perhaps due to tariff worries or limited trading volume or unfamiliarity with the company's brands, investors are missing what is emerging as one of the few organic (and, in our view, compelling) growth stories in specialty apparel retailing. a.k.a. Brands management has, via the launch of Princess Polly retail locations, material wholesale expansion for both the Petal & Pup and Princess Polly brands, a renaissance at Culture Kings with an emphasis on the "test and repeat" model and a return to economic growth in the material Australian market, positioned a.k.a. Brands for material top line growth (and upside) and the potential to capture material operating leverage; we view these catalysts as significant multi-year drivers. Further, we believe the company remains somewhat unaffected by tariff issues, and with the ability to raise overall pricing if necessary. As such, we (obviously) remain highly enthusiastic on AKA and reiterate our Buy rating and $30 price target.
