Wider loss and margin pressure at Koss (NASDAQ: KOSS) in Q3 2026

Rhea-AI Filing Summary

Koss Corporation reported slightly higher third-quarter net sales but a wider loss. Net sales for the quarter ended March 31, 2026 rose 1.6% to $2.82 million, yet the company posted a net loss of $546,587, compared with a $316,742 loss a year earlier. Basic and diluted loss per share doubled to $0.06.

For the first nine months, net sales increased 2.3% to $9.76 million, while the net loss widened to $868,265. Gross margins fell from 38.4% to 35.5%, pressured by higher-tariff Chinese inventory and earlier elevated freight costs. Management highlighted 23% year-over-year growth in higher-margin direct-to-consumer sales, now the largest segment, partially offsetting weaker European demand.

Positive

• None.

Negative

• Margin compression and larger losses: Gross margin fell from 38.4% to 35.5% over the first nine months, and the net loss widened to $868,265, indicating rising cost pressures despite modest revenue growth.

Insights

Equity research analyst

Sales grew modestly, but margin compression drove a wider loss.

Koss Corporation delivered small top-line growth, with Q3 net sales of $2.82 million, up 1.6% year over year, and nine-month sales of $9.76 million, up 2.3%. Growth came from domestic distributors and a large education order, while European demand weakened.

Profitability deteriorated as gross margins declined from 38.4% to 35.5% over the first nine months. Management attributed this to selling inventory from China subject to higher tariffs and previously elevated freight rates. As a result, the nine-month net loss increased to $868,265, and Q3 loss per share was $0.06.

Management noted that direct-to-consumer sales grew 23% year over year and now represent the largest segment, helping mix toward higher-margin channels. Future filings may show whether continued DTC growth and normalization of input costs can offset soft European markets and restore margins.

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Q3 2026 net sales: $2,824,763 Q3 2026 net loss: $546,587 Q3 2026 loss per share: $0.06 +5 more

8 metrics

Q3 2026 net sales $2,824,763 Third quarter ended March 31, 2026

Q3 2026 net loss $546,587 Third quarter ended March 31, 2026

Q3 2026 loss per share $0.06 Basic and diluted, third quarter 2026

Nine-month net sales $9,756,920 Nine months ended March 31, 2026

Nine-month net loss $868,265 Nine months ended March 31, 2026

Gross margin 2026 YTD 35.5% First nine months of fiscal 2026

Gross margin prior year YTD 38.4% First nine months of prior fiscal year

DTC sales growth 23% Year-over-year increase in direct-to-consumer sales

Key Terms

gross margins, direct-to-consumer (DTC), basis points, forward-looking statements, +1 more

5 terms

gross margins financial

"Profitability lagged behind prior year with gross margins falling from 38.4% during the first nine months of the prior year to 35.5%."

Gross margins measure the portion of sales a company keeps after paying the direct costs to make its products or deliver services, expressed as a percentage of revenue. Think of it as the money left from each sale after paying the ingredients — it signals how efficiently a business produces and prices goods, and matters to investors because higher margins generally mean more room to cover other expenses, invest, and generate profit.

direct-to-consumer (DTC) financial

"Direct-to-consumer (DTC) sales have contributed significantly to overall sales growth, achieving a 23% year-over-year increase."

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% 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."

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.

forward-looking statements regulatory

"This press release contains forward-looking statements. These statements relate to future events or our future financial performance."

Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.

tariffs financial

"continued sell-through of inventory manufactured in China and tariffed at the early, higher rates"

Tariffs are taxes imposed by a government on goods imported from other countries. They increase the cost of those goods, which can lead to higher prices for consumers and impact international trade. For investors, tariffs matter because they can influence the profitability of companies, affect supply chains, and shift economic stability across different regions.

Earnings Snapshot

Net sales: $2,824,763

Q3 2026

Net sales $2,824,763 +1.6% YoY

Net loss $546,587 vs. $316,742 prior-year quarter

Loss per share $0.06 vs. $0.03 prior-year quarter

Nine-month net sales $9,756,920 +2.3% YoY

Nine-month net loss $868,265 vs. $642,135 prior-year period

Understanding 8-K Material Events →

false000005670100000567012026-05-072026-05-07

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 7, 2026

Koss Corporation

(Exact name of registrant as specified in its charter)

Delaware	0-3295	39-1168275
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4129 North Port Washington Avenue, Milwaukee, Wisconsin 53212

(Address of principal executive offices)  (Zip code)

(414) 964-5000

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
‎ 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.005 par value per share	KOSS	Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐   

‎

1

Item 2.02     Results of Operations and Financial Condition.

On May 7, 2026, Koss Corporation issued a press release (the “Press Release”) announcing its financial results for the quarter ended March 31, 2026.  A copy of the Press Release is being furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information in this Item 2.02 Results of Operations and Financial Condition, including Exhibit 99.1 attached hereto, is being furnished pursuant to Item 2.02 of Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 and Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Item 9.01     Financial Statements and Exhibits.

(d) Exhibits

Number	Description
Exhibit 99.1	Press release of Koss Corporation dated May 7, 2026
Exhibit 104	Cover Page Interactive Data File (embedded within the XBRL document)

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

May 7, 2026	KOSS CORPORATION
	By:	/s/ Michael J. Koss
		Michael J. Koss
		Chairman and Chief Executive Officer


FOR IMMEDIATE RELEASE	CONTACT:	Michael J. Koss
May 7, 2026		Chairman & CEO
		(414) 964-5000
		mjkoss@koss.com



Koss Corporation Reports Third Quarter Results

Milwaukee, Wisconsin: 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.

1



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.



2

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









3

FAQ

How did Koss (KOSS) perform in the third quarter of fiscal 2026?

Koss reported modest third-quarter sales growth but a wider loss. Net sales rose 1.6% to $2.82 million, while net loss increased to $546,587 and loss per share doubled to $0.06, reflecting higher costs and lower margins.

What were Koss (KOSS) results for the first nine months ended March 31, 2026?

For the first nine months, Koss generated net sales of $9.76 million, up 2.3% year over year. However, the company recorded a higher net loss of $868,265 compared with $642,135 in the prior-year period, as margins and operating results weakened.

How did gross margins change for Koss (KOSS) in fiscal 2026?

Koss reported gross margin of 35.5% for the first nine months of fiscal 2026, down from 38.4% a year earlier. Management cited continued sell-through of Chinese inventory subject to higher tariffs and prior elevated freight rates as key drivers of this margin erosion.

How are Koss (KOSS) direct-to-consumer sales performing?

Direct-to-consumer sales are a bright spot for Koss, growing 23% year over year. Management said DTC now represents the company’s largest segment and, along with higher-margin domestic distributors, helped partially offset margin pressure from older, higher-cost inventory.

What challenges is Koss (KOSS) facing in its European markets?

Koss noted that European sales have slowed significantly. The company attributed this to extended stock replacement cycles and broader economic weakness, including declines in consumer confidence and reduced sales expectations, which are weighing on regional headphone demand.

What were Koss (KOSS) earnings per share for Q3 and year-to-date 2026?

For the third quarter of fiscal 2026, Koss reported basic and diluted net loss per share of $0.06, versus $0.03 a year earlier. For the nine-month period, loss per share was $0.09 in both basic and diluted terms.

Filing Exhibits & Attachments

4 documents

Press Releases

• EX-99.1 EX-99.1 134.8 KB

Other Documents

• EX-101 EX-101.SCH 2.4 KB
• EX-101 EX-101.LAB 16.8 KB
• EX-101 EX-101.PRE 10.5 KB