Koss Corporation Reports First Quarter Results

A final $76,000 tariff refund and favorable customer mix were outweighed by lower overhead absorption and higher freight rates.

Rhea-AI Summary

Koss (NASDAQ: KOSS) reported a 24.0% decline in first-quarter fiscal 2027 net sales for the period ended September 30, 2026. Sales were $3,094,078, versus $4,070,778 a year earlier. The company posted a $234,168 net loss, compared with $243,729 in net income; basic and diluted earnings per share moved from $0.03 income to a $0.02 loss.

A prior-year custom order for an Education customer’s product launch did not recur. Direct-to-consumer sales represented approximately 37% of turnover, while European distributor sales were on par with the prior year. Gross margin fell to 39.5% from 40.0% despite a favorable customer mix and a final $76,000 tariff refund, as lower sales reduced fixed manufacturing overhead absorption and freight rates rose. Selling, general and administrative expenses declined to $1,622,430 from $1,674,732, but operating loss widened to $400,595 from $46,040.

7 points · 0 major

NegativeiHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

1 major · 8 points

How the balance works

Positive

• Moderate pointDirect-to-consumer sales continued growing and represented approximately 37% of total turnover.
• Minor pointCertain domestic distributors generated higher sales than in the prior-year quarter.
• Minor pointFinal tariff refund of $76,000 benefited gross margin on previously paid Chinese-product import duties.
• Minor pointSelling, general and administrative expenses fell to $1,622,430 from $1,674,732 year over year.
• Minor pointCost of goods sold declined to $1,872,243 from $2,442,086 year over year.

2 minor points

• Minor pointInterest expense decreased to $409 from $599 in the prior-year quarter.
• Minor pointIncome tax provision decreased to $2,234 from $2,760 in the prior-year quarter.

Negative

• Major pointNet loss of $234,168 replaced net income of $243,729 in the prior-year quarter.
• Moderate pointNet sales fell 24.0%, or $976,700, to $3,094,078 versus the prior-year quarter.
• Moderate pointOperating loss widened to $400,595 from $46,040 in the prior-year quarter.
• Minor pointBasic and diluted loss per share of $0.02 compared with $0.03 earnings a year earlier.
• Minor pointGross margin declined 50 basis points to 39.5%, reflecting lower overhead absorption and higher freight rates.

3 minor points

• Minor pointGross profit fell to $1,221,835 from $1,628,692 in the prior-year quarter.
• Minor pointPrior-year Education customer custom order for a new product launch did not recur.
• Minor pointInterest income declined to $169,070 from $293,128 in the prior-year quarter.

Key Figures

Net sales: $3,094,078; down 24.0% Net income (loss): $234,168 net loss vs. $243,729 net income Basic and diluted EPS: $0.02 loss vs. $0.03 income +2 more

Net sales

$3,094,078; down 24.0%

Q1 FY2027 compared with the same period in FY2026

Net income (loss)

$234,168 net loss vs. $243,729 net income

Three months ended September 30, 2026 vs. prior-year period

Basic and diluted EPS

$0.02 loss vs. $0.03 income

Q1 FY2027 vs. the same three-month period one year earlier

Gross margin

39.5%, down 50 basis points

Q1 FY2027 compared with 40.0% a year earlier

DTC share of turnover

Approximately 37%

Company total turnover

Previous Earnings Reports

1 past event · Latest: Oct 30

Same Type 1 event

1. Oct 30

   First-quarter earnings

   24h Move

   +0.8%

   Prior-year first-quarter sales were $4,070,778 with $243,729 net income, supported by an Education customer order.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

basis points, weighted-average number of shares

2 terms

basis points financial

"gross margin declined 50 basis points to 39.5%"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

weighted-average number of shares financial

"Weighted-average number of shares: Basic"

The weighted-average number of shares is the count of a company’s common shares adjusted for the portion of the reporting period each share was outstanding and for certain potential shares from stock-based compensation or convertible securities. It turns a changing headcount of shares into a single average, like averaging the number of people in a room over time when some arrive or leave; investors use it to calculate per-share metrics (for example, earnings per share) so comparisons are consistent.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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MILWAUKEE, Oct. 29, 2026 (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, 2026.

Net sales for the first quarter ended September 30, 2026 were $3,094,078, a decline of $976,700, or 24.0%, compared to net sales of $4,070,778 for the three months ended September 30, 2025. A net loss of $234,168 was generated for the three months ended September 30, 2026 compared to net income of $243,729 for the same period in the prior year. Basic and diluted net loss per common share for the first quarter of fiscal year 2027 was $0.02 compared to basic and diluted net income per common share of $0.03 for the same three-month period one year ago.

“Sales to certain domestic distributors were strong in the first quarter of fiscal year 2027 compared with the prior-year period. However, the significant custom order that shipped in the first quarter of last year for an Education customer’s new product launch did not recur this year. European distributor sales for the three months ended September 30, 2026 were on par to those for the same period in the prior year, supported by necessary inventory replenishment orders,” Michael J. Koss, Chairman and CEO, said today. “Direct-to-consumer (DTC) sales continue to positively impact sales growth and now represent approximately 37% of the Company’s total turnover.”

Koss continued, “The Company’s gross margin declined 50 basis points to 39.5% in the first quarter of fiscal 2027, compared with 40.0% a year earlier. The benefit to gross margins of a favorable customer mix of higher margin DTC and domestic distributor sales, along with the recognition of a final tariff refund of $76,000 for previously paid import duties on product from China, were negated by the impact of fixed manufacturing overhead absorption on a lower sales base, coupled with higher freight rates due to general rate increases and peak season surcharges.”

“We remain encouraged by the strength of our domestic distributor business and the growing contribution of DTC sales, which position the Company to build on these positive trends as the fiscal year progresses,” Koss concluded.

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. Learn more at koss.com and kosscorporation.com.

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 "anticipates," "believes," "estimates," "expects," "intends," "plans," "may," "will," "should," “could,” “would,” “shall,” "forecasts," "predicts," "potential," "continue," “seeks,” “goal,” “projects” 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 continued future fluctuations in economic conditions; the Company’s ability to successfully develop new products and assess potential market opportunities; the receptivity of consumers to new consumer electronics technologies; the Company’s ability to successfully and profitably market its products; the rate and consumer acceptance of new product introductions; the amount and nature of competition for the Company’s products; pricing; the number and nature of customers and their product orders; the Company’s ability to meet demand for products; production by third party vendors; foreign manufacturing, sourcing, and sales (including foreign government regulation, trade and importation concerns); uncertainties associated with the pandemics and other health crises or natural disasters, including their possible effects on the Company’s operations and its supply chain; changes in trade policies and tariffs, import and export restrictions; the impact of the ongoing conflict in Eastern Europe and the instability and escalation in the Middle East on the Company’s operations; the effects of any judicial, executive or legislative action affecting the Company or the audio/video industry; borrowing costs; changes in tax rates; volatility in the price and trading volume of our common stock; the outcome of any litigation, government investigations, enforcement actions or other legal proceedings; any impacts of future acquisitions or other strategic transactions; the possibility that costs or difficulties related to the integration of acquired businesses’ operations will be greater than expected and the possibility that integration efforts will disrupt our business and strain management time and resources; the Company’s ability to retain and hire key personnel and other risk factors described in the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026. 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
	2026				2025
Net sales	$	3,094,078			$	4,070,778
Cost of goods sold		1,872,243				2,442,086
Gross profit		1,221,835				1,628,692
Selling, general and administrative expenses		1,622,430				1,674,732
Loss from operations		(400,595	)			(46,040	)
Other income (expense):
Interest income		169,070				293,128
Interest expense		(409	)			(599	)
Total other income, net		168,661				292,529
(Loss) income before income tax provision		(231,934	)			246,489
Income tax provision		2,234				2,760
Net (loss) income	$	(234,168	)		$	243,729
(Loss) income per common share:
Basic	$	(0.02	)		$	0.03
Diluted	$	(0.02	)		$	0.03
Weighted-average number of shares:
Basic		9,466,438				9,456,438
Diluted		9,466,438				9,537,817

CONTACT:	Michael J. Koss
	Chairman & CEO
	(414) 964-5000
	mjkoss@koss.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Koss’s first-quarter fiscal 2027 sales and earnings?

Koss reported $3,094,078 in net sales and a $234,168 net loss for the three months ended September 30, 2026. Sales declined 24.0% year over year, while the prior-year quarter generated $243,729 in net income. Basic and diluted loss per share was $0.02, versus earnings of $0.03.

Why did Koss’s gross margin decline in the first quarter of fiscal 2027?

Koss’s gross margin fell to 39.5% from 40.0% because lower sales reduced fixed manufacturing overhead absorption and freight rates increased. General rate increases and peak-season surcharges raised freight costs, outweighing a favorable customer mix and a final $76,000 tariff refund.