Koss Corporation Reports Third Quarter Results

Koss Corporation (NASDAQ: KOSS) reported Q3 results for the period ended March 31, 2026.

Rhea-AI Summary

Koss Corporation (NASDAQ: KOSS) reported Q3 results for the period ended March 31, 2026. Q3 net sales were $2,824,763, up 1.6% year‑over‑year. Q3 net loss was $546,587 (basic and diluted loss per share $0.06). Nine‑month sales were $9,756,920, up 2.3%.

Management cited a 23% year‑over‑year increase in DTC sales, weaker European sell‑through, and a 290 basis‑point gross margin decline driven by higher tariffs and freight on older inventory.

Positive

• Net sales +1.6% in Q3 to $2.82M
• Nine‑month net sales +2.3% to $9.76M
• Direct‑to‑consumer sales +23% year‑over‑year

Negative

• Net loss widened to $546,587 in Q3
• Gross margin fell 290 basis points for nine months
• European sales slowed significantly, reducing international demand
• Margin erosion tied to higher tariffs and freight on older inventory

Argus May 8 session

-0.53% close to close Open Argus

Details

News Market Reaction – KOSS

On May 8, the first trading day after this news, KOSS closed 0.53% below the previous close.

Data tracked by StockTitan Argus for the May 8 session.

Market Context

This announcement highlights modest top-line growth but continued earnings and margin pressure. Q3 n...

Analysis

This announcement highlights modest top-line growth but continued earnings and margin pressure. Q3 net sales rose to $2.82M, yet net loss widened to $546,587 and gross margin fell to 35.5%. Management pointed to tariffed China inventory, higher freight and weaker European markets, partly offset by 23% growth in direct-to-consumer sales. Investors may focus on how quickly tariffed inventory rolls off, the durability of DTC as the largest segment, and trends in education and distributor orders.

Key Figures

Q3 2026 net sales: $2,824,763 Q3 2026 net loss: $546,587 Q3 2026 EPS: ($0.06) +5 more

Q3 2026 net sales

$2,824,763

Quarter ended March 31, 2026; up 1.6% vs prior-year Q3

Q3 2026 net loss

$546,587

Three months ended March 31, 2026; higher than prior-year loss

Q3 2026 EPS

($0.06)

Basic and diluted net loss per share vs ($0.03) prior-year Q3

9M 2026 net sales

$9,756,920

Nine months ended March 31, 2026; up 2.3% vs prior year

9M 2026 net loss

$868,265

Nine months ended March 31, 2026; higher than $642,135 prior year

9M gross margin 2026

35.5%

Down from 38.4% in prior-year nine months; decline of 290 bps

DTC sales growth

23%

Year-over-year increase in direct-to-consumer sales; now largest segment

Q3 2025 net sales

$2,781,006

Prior-year Q3 net sales comparator for 2026 results

Previous Earnings Reports

5 past events · Latest: Jan 29

Same Type 5 events

1. Jan 29

   Q2 2026 earnings

   24h Move

   -3.6%

   Sales decline, margin compression and shift from prior-year profit to net loss.

2. Oct 30

   Q1 2026 earnings

   24h Move

   +0.8%

   Strong sales growth, return to profitability and higher gross margins.

3. May 08

   Q3 2025 earnings

   24h Move

   +3.6%

   Sales growth, improved nine‑month losses and margin expansion despite mixed markets.

4. Jan 30

   Q2 2025 earnings

   24h Move

   -3.1%

   Improved margins and a move to profitability but shares traded lower afterward.

5. Oct 31

   Q1 2025 earnings

   24h Move

   -1.4%

   Lower sales and wider loss offset by better margins and European strength.

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

Key Terms

direct-to-consumer (dtc), basis points, tariffed

3 terms

direct-to-consumer (dtc) financial

"Direct-to-consumer (DTC) sales have contributed significantly to overall sales growth"

A direct-to-consumer (DTC) model is a business approach where a company sells its products or services straight to customers, skipping middlemen such as retail stores or distributors. For investors, DTC matters because it can boost profit margins, give the company direct access to customer data and feedback, and change how fast it can grow or face inventory and marketing costs — think of a farmer selling at a market rather than through a supermarket chain.

basis points financial

"gross margins falling from 38.4% ... to 35.5% ... a decline of 290 basis points"

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.

tariffed regulatory

"inventory manufactured in China and tariffed at the early, higher rates"

Tariffed means a product, shipment or service is subject to a government‑imposed tariff — a tax or fee charged on goods crossing borders or on regulated services — which raises the cost of bringing that item to market. For investors, being tariffed can squeeze profit margins, change competitive pricing, disrupt supply chains and shift demand, similar to how a new toll on a road makes trips costlier and reroutes traffic.

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

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MILWAUKEE, May 07, 2026 (GLOBE NEWSWIRE) -- Koss Corporation (NASDAQ: KOSS) (the “Company”), the U.S. based high-fidelity headphone company, has reported its results for the third quarter ended March 31, 2026.

For the third quarter ended March 31, 2026, net sales of $2,824,763 were up $43,757, or 1.6%, over $2,781,006 of net sales for the third quarter of the prior year. A net loss of $546,587 was generated for the three months ended March 31, 2026 compared to a net loss of $316,742 for the same period in the prior year. Basic and diluted net loss per common share for the third quarter of fiscal year 2026 was $0.06 compared to basic and diluted net loss per common share of $0.03 for the same three-month period one year ago.

Net sales for the nine months ended March 31, 2026 were $9,756,920, up $216,960, or 2.3%, versus net sales of $9,539,960 for the comparable period in the prior year. The net loss of $868,265 for the first nine months of fiscal year 2026 was higher by $226,130 over the net loss of $642,135 for the first nine months of the prior fiscal year. Basic and diluted net loss per common share was $0.09 and $0.07, respectively, for the nine months ended March 31, 2026 and 2025.

“Strong sales to our domestic distributors, coupled with a significant custom sale into the Education market earlier in the year, really drove the increase in sales over the prior year. Unfortunately, sales to our European markets have slowed significantly as a result of extended stock replacement cycles driven by broader, economy-wide declines in consumer confidence and reduced sales expectations,” Michael J. Koss, Chairman and CEO, said today. “Direct-to-consumer (DTC) sales have contributed significantly to overall sales growth, achieving a 23% year-over-year increase, and now constitutes the Company’s largest segment.”

Koss further stated, “Profitability lagged behind prior year with gross margins falling from 38.4% during the first nine months of the prior year to 35.5% for the comparable period in fiscal year 2026, a decline of 290 basis points. The negative impact of the continued sell-through of inventory manufactured in China and tariffed at the early, higher rates, as well as sales of inventory brought in at higher freight rates, were the main factors behind the margin erosion. A favorable customer mix of higher margin domestic distributor and DTC sales helped to offset some of the adverse impacts.”
        
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 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 political developments, international trade disputes and restrictions, natural disasters, public health concerns, and other disruptions, including their possible effects on the Company’s operations and its supply chain; trade tensions between the U.S. and China given recently enacted tariffs and their uncertainty; the impact of the ongoing conflict in Eastern Europe and the instability 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; the outcome of any litigation, government investigations, enforcement actions or other legal proceedings; the Company’s ability to retain and hire key personnel and other risk factors described in the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and subsequently filed Quarterly Reports on Form 10-Q. 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								Nine Months Ended
	March 31								March 31
	2026				2025				2026				2025
Net sales	$	2,824,763			$	2,781,006			$	9,756,920			$	9,539,960
Cost of goods sold		1,822,002				1,696,334				6,294,661				5,877,405
Gross profit		1,002,761				1,084,672				3,462,259				3,662,555
Selling, general and administrative expenses		1,721,892				1,603,678				5,242,008				4,960,478
Loss from operations		(719,131	)			(519,006	)			(1,779,749	)			(1,297,923	)
Other income (expense):
Interest income		174,875				208,175				670,487				667,219
Other income		—				—				250,000				—
Interest expense		(506	)			—				(1,658	)			—
Total other income, net		174,369				208,175				918,829				667,219
Loss before income tax provision		(544,762	)			(310,831	)			(860,920	)			(630,704	)
Income tax provision		1,825				5,911				7,345				11,431
Net loss	$	(546,587	)		$	(316,742	)		$	(868,265	)		$	(642,135	)
Loss per common share:
Basic	$	(0.06	)		$	(0.03	)		$	(0.09	)		$	(0.07	)
Diluted	$	(0.06	)		$	(0.03	)		$	(0.09	)		$	(0.07	)
Weighted-average number of shares:
Basic		9,466,438				9,375,795				9,461,730				9,346,952
Diluted		9,466,438				9,375,795				9,461,730				9,346,952

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 Q3 2026 revenue and net loss figures (ended March 31, 2026)?

Koss reported Q3 net sales of $2,824,763 and a net loss of $546,587. According to the company, sales rose 1.6% year‑over‑year while the net loss increased versus the prior year period.

How did KOSS perform over the first nine months of fiscal 2026 (sales and loss)?

For nine months, Koss reported $9,756,920 in net sales (up 2.3%) and a net loss of $868,265. According to the company, sales grew modestly while the cumulative loss widened versus prior-year periods.

What caused KOSS gross margin decline in fiscal 2026 nine months?

Gross margin fell by 290 basis points to 35.5% for the nine months. According to the company, higher tariffs and freight on older China‑manufactured inventory and inventory mix drove the margin decline.

How significant are KOSS direct‑to‑consumer (DTC) sales for 2026 results?

DTC sales increased by 23% year‑over‑year and became the company’s largest segment. According to the company, stronger domestic DTC and distributor sales materially supported overall revenue growth.

Is KOSS seeing weakness in international markets in fiscal 2026?

Yes. The company reported that European sales slowed significantly due to extended stock replacement cycles and weaker consumer confidence. According to the company, that weakness reduced international demand and weighed on results.