Koss Corporation Reports Third Quarter Results
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.
AI-generated analysis. Not financial advice.
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
Key Figures
Market Reality Check
Peers on Argus
KOSS was down 2.38% while key peers in Consumer Electronics like UEIC, WTO, AXIL, and WLDS showed mixed to positive price changes, and only WTO appeared in momentum scans to the downside. This points to a stock-specific reaction rather than a broad sector move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Jan 29 | Q2 2026 earnings | Negative | -3.6% | Sales decline, margin compression and shift from prior-year profit to net loss. |
| Oct 30 | Q1 2026 earnings | Positive | +0.8% | Strong sales growth, return to profitability and higher gross margins. |
| May 08 | Q3 2025 earnings | Positive | +3.6% | Sales growth, improved nine‑month losses and margin expansion despite mixed markets. |
| Jan 30 | Q2 2025 earnings | Positive | -3.1% | Improved margins and a move to profitability but shares traded lower afterward. |
| Oct 31 | Q1 2025 earnings | Negative | -1.4% | Lower sales and wider loss offset by better margins and European strength. |
Earnings releases typically see price moves that align with the underlying results, with one notable instance where shares fell despite improved profitability.
Over recent quarters, Koss’s earnings history shows alternating periods of growth and pressure. Prior updates highlighted swings between net income and net loss, with margins heavily influenced by tariffs on China-sourced inventory and freight costs. Direct-to-consumer growth and education orders have been recurring drivers. Historically, earnings headlines dated 2024-10-31 through 2026-01-29 often led to modest single‑digit percentage moves, suggesting the market responds but without extreme volatility to such releases.
Historical Comparison
Across the last five earnings releases, KOSS moved an average of -0.72% on the day after results, with most reactions tracking the tone of the numbers.
Recent earnings have repeatedly emphasized tariff and freight impacts on margins alongside growing direct-to-consumer and education channels, showing a shift toward higher-margin mix but with persistent cost headwinds.
Market Pulse Summary
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 Terms
direct-to-consumer (dtc) financial
basis points financial
tariffed regulatory
AI-generated analysis. Not financial advice.
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
Net sales for the nine months ended March 31, 2026 were
“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
Koss further stated, “Profitability lagged behind prior year with gross margins falling from
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 |
