(MENAFN- GlobeNewsWire - Nasdaq) Austin, TX, Nov. 14, 2025 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. (“DBG”) (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its third quarter ended September 30, 2025.

“Our third quarter results reflect our legacy wholesale business and not our significantly growing collegiate business. We have seen the wholesale revenues bottom out and are experiencing higher bookings for our Spring 2026 wholesale orders versus the same period last year. We expect this trend to continue throughout 2026 based on both high sell through rates of current product and our largest national account is doubling the number of stores from 50 to 100 for Sundry”.

“While this is exciting and a positive trend, it is overshadowed by the significant revenue growth we ae experiencing in our AVO collegiate brand. And this growth is only with one university as of now, which we expect to meaningfully increase over the next few months. We believe that we are both the quality and value leader in collegiate apparel space, and this is why we are experiencing this growth.”

“The global licensed sports merchandise market was estimated at $36.4 billion in 2024, and is projected to increase to $49.0 billion by 2030, according to Grand View Research. This is a significant growth opportunity for our shareholders as we add additional universities and expand our product offering and our influencer and sorority marketing programs,” said Hil Davis, CEO of Digital Brands Group.

The Company plans to provide more information on the AVO Collegiate program and its market opportunity as part of its State of the Union call in early January. The State of the Union call will outline the Company's strategic and growth plans for 2026, especially in the collegiate channel.

Results for the Third Quarter

• Net revenues were $1.7 million compared to $2.4 million a year ago
  • The majority of the decline in revenue is associated with softer wholesale revenue
  • We have experienced higher wholesale bookings, which closed at the end of October, for the Spring of 2026 versus Spring 2025 due to a change in the head designer
• Gross profit margins were 42.7% compared to 46.0% a year ago
  • The biggest factor in the decline is the fixed costs associated with gross margins including warehouse rent and labor expenses, pattern makers and sewers expenses and some design members expenses
  • Gross profit was $0.7 million compared to $1.1 million a year ago
• G&A expenses decreased $0.2 million to $2.2 million compared to $2.4 million a year ago
  • G&A included $0.8 million in non-cash expenses
  • G&A increased as we ramp AVO Collegiate due to its significant month over month revenue increase in the third quarter, which just included one university
• Sales & Marketing expenses were $1.6 million compared to $0.7 million a year ago
  • The majority of the sales and marketing expense were associated with ramping the collegiate side as we have seen significant month over month revenue growth in the collegiate side, as well as demand from additional universities
• Net loss was $3.5 million compared to a net loss of $3.5 million a year ago,
• Net loss per diluted share was $1.18 per diluted share compared to a net loss per diluted share of $81.53 a year ago
  

Forward-looking Statements

Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting DBG and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as“will,”“anticipate,”“estimate,”“expect,”“should,” and“may” and other words and terms of similar meaning or use of future dates, however, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding DBG's plans, objectives, projections and expectations relating to DBG's operations or financial performance, and assumptions related thereto are forward-looking statements. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. DBG undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Potential risks and uncertainties that could cause the actual results of operations or financial condition of DBG to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: risks arising from the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic; the level of consumer demand for apparel and accessories; disruption to DBGs distribution system; the financial strength of DBG's customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; DBG's response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; intense competition from online retailers; manufacturing and product innovation; increasing pressure on margins; DBG's ability to implement its business strategy; DBG's ability to grow its wholesale and direct-to-consumer businesses; retail industry changes and challenges; DBG's and its vendors' ability to maintain the strength and security of information technology systems; the risk that DBG's facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; DBG's ability to properly collect, use, manage and secure consumer and employee data; stability of DBG's manufacturing facilities and foreign suppliers; continued use by DBG's suppliers of ethical business practices; DBG's ability to accurately forecast demand for products; continuity of members of DBG's management; DBG's ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; DBG's ability to execute and integrate acquisitions; changes in tax laws and liabilities; legal, regulatory, political and economic risks; adverse or unexpected weather conditions; DBG's indebtedness and its ability to obtain financing on favorable terms, if needed, could prevent DBG from fulfilling its financial obligations; and climate change and increased focus on sustainability issues. More information on potential factors that could affect DBG's financial results is included from time to time in DBG's public reports filed with the SEC, including DBG's Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q, and Forms 8-K filed or furnished with the SEC.

DIGITAL BRANDS GROUP, INC
STATEMENT OF OPERATIONS

		Three Months Ended			Nine Months Ended
		September, 30			September, 30
		2025			2024			2025			2024
Net revenues		$	1,653,776			$	2,440,801			$	5,776,856			$	9,413,457
Cost of net revenues			947,167				1,319,214				3,486,240				5,012,457
Gross profit			706,609				1,121,587				2,290,616				4,401,000
Operating expenses:
General and administrative			2,193,205				2,429,040				5,694,257				6,347,460
Sales and marketing			1,603,728				655,833				3,464,110				1,979,173
Distribution			238,880				180,879				443,230				745,412
Impairment of intangible assets			-				600,000				-				600,000
Total operating expenses			4,035,813				3,865,752				9,601,597				9,672,045
Loss from operations			(3,329,204	)			(2,744,165	)			(7,310,981	)			(5,271,045	)
Other income (expense):
Interest expense			(128,565	)			(742,557	)			(390,758	)			(2,487,172	)
Other non-operating income (expenses)			5,819				(54,515	)			42,017				22,765
Total other income (expense), net			(122,746	)			(797,072	)			(348,741	)			(2,464,407	)
Income tax benefit (provision)			-				-				-				-
Net loss from continuing operations			(3,451,950	)			(3,541,237	)			(7,659,722	)			(7,735,452	)
(Loss) from discontinued operations, net of tax			-				-				-				-
Net loss		$	(3,451,950	)		$	(3,541,237	)		$	(7,659,722	)		$	(7,735,452	)
Weighted average common shares outstanding - basic and diluted			2,930,735				43,436				3,742,922				41,225
Net loss per common share - basic and diluted		$	(1.18	)		$	(81.53	)		$	(2.05	)		$	(187.64	)

The accompanying notes are an integral part of these financial statements.

DIGITAL BRANDS GROUP, INC
STATEMENTS OF CASH FLOW

		Nine Months Ended
		September 30,
		2025			2024
Cash flows from operating activities:
Net loss		$	(7,659,722	)		$	(7,735,452	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,254,663				2,057,638
Amortization of loan discount and fees			38,605				2,220,549
Impairment of intangibles			-				600,000
Stock-based compensation			-				169,262
Loss on conversion of accounts payable into common stock			31,471				-
Shares issued for services			290,791				312,634
Change in credit reserve			-				(151,611	)
Non-cash lease expense			-				817,077
Changes in operating assets and liabilities:
Accounts receivable, net			(5,275	)			(201,501	)
Due from factor			161,973				51,153
Inventory			(495,064	)			(190,918	)
Prepaid expenses and other current assets			(2,722,654	)			(76,637	)
Prepaid marketing expense			(1,258,767	)			-
Accounts payable			(1,455,616	)			(1,287,018	)
Stock payable			69,406				-
Accrued expenses and other liabilities			593,546				477,945
Accrued interest payable			-				106,701
Lease liabilities			-				(490,000	)
Deposits			3,100				(77,280	)
Net cash used in operating activities			(11,153,543	)			(3,397,458	)
Cash flows from investing activities:
Purchase of property, equipment and software			-				(23,801	)
Net cash provided by investing activities			-				(23,801	)
Cash flows from financing activities:
Due to related parties			(16,000	)			26,909
Issuance of loans and note payable			240,000				790,977
Repayments of convertible notes and loan payable			(430,625	)			(2,484,248	)
Proceeds of issuance of Series D preferred stock,net of issuance cost			11,387,000				-
Proceeds for exercise of warrants			5,573,304				-
Proceeds for issuance of Pre fundedwarrants			6,642,433				-
Issuance of common stock in cash			-				5,356,194
Net cash provided by financing activities			23,396,112				3,689,832
Net change in cash and cash equivalents			12,242,569				268,573
Cash and cash equivalents at beginning of year			164,431				20,773
Cash and cash equivalents at end of year		$	12,407,000			$	289,346

The accompanying notes are an integral part of these financial statements.

DIGITAL BRANDS GROUP, INC
STATEMENT OF BALANCE SHEETS

		September 30,			December 31,
		2025			2024
ASSETS
Current assets:
Cash and cash equivalents		$	6,701,820			$	164,431
Restricted cash			5,705,179				-
Accounts receivable, net			49,342				44,067
Due from factor, net			228,213				390,186
Inventory			4,319,004				3,823,940
Prepaid expenses and other current assets			2,997,297				274,643
Total current assets			20,000,855				4,697,267
Property, equipment and software, net			19,046				24,089
Goodwill			8,973,501				8,973,501
Intangible assets, net			7,870,419				6,120,039
Deposits			72,331				75,431
Prepaid marketing expenses			4,258,767				-
Total assets		$	41,194,919			$	19,890,327
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	4,886,664			$	6,424,661
Accrued expenses and other liabilities			5,515,046				5,257,102
Due to related parties			395,921				411,921
Convertible note payable, net			-				100,000
Accrued interest payable			2,663,680				2,328,078
Loan payable, current			2,746,096				2,798,116
Stock payable			5,099,654				-
Promissory note payable, net			3,500,000				3,500,000
Total current liabilities			24,807,061				20,819,878
Loan payable			150,000				150,000
Deferred tax liability			248,990				248,990
Total liabilities			25,206,051				21,218,868
Commitments and contingencies
Stockholders' equity (deficit):
Undesignated preferred stock, $0.0001 par, 10,000,000 shares authorized, 0 shares issued and outstanding as of both September 30, 2025 and December 31, 2024			-				-
Series A convertible preferred stock, $0.0001 par, 6,300 shares designated, 6,300 shares issued and outstanding as of both September 30, 2025 and December 31, 2024			1				1
Series C convertible preferred stock, $0.0001 par, 1,344 and 4,786 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively			1				1
Series D convertible preferred stock, $0.0001 par, 15,906 and 0 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively			2				-
Common stock, $0.0001 par, 1,000,000,000 shares authorized, 5,726,930 and 838,584 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively			572				83
Additional paid-in capital			150,749,052				125,772,412
Accumulated deficit			(134,760,760	)			(127,101,038	)
Total stockholders' equity (deficit)			15,988,868				(1,328,541	)
Total liabilities and stockholders' equity (deficit)		$	41,194,919			$	19,890,327

The accompanying notes are an integral part of these financial statements.

About Digital Brands Group

We offer a wide variety of apparel through numerous brands on a both direct-to-consumer and wholesale basis. We have created a business model derived from our founding as a digitally native-first vertical brand. We focus on owning the customer's "closet share" by leveraging their data and purchase history to create personalized targeted content and looks for that specific customer cohort.

Digital Brands Group, Inc. Company Contact
Hil Davis, CEO
Email: ...
Phone: (800) 593-1047
SOURCE Digital Brands Group, Inc.
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