Perfect Moment Ltd. reported fiscal Q2 2026 revenue of $4.8 million, a 24% increase from $3.8 million in the same quarter a year earlier. The jump was driven by a 61% rise in wholesale sales to $4.3 million, while e‑commerce revenue fell 71% to $0.3 million as the company accelerated its shift to a full‑price brand model. The stronger wholesale mix and the elimination of discount‑driven online sales lifted the company’s gross margin to 60.1% from 54.0% year‑ago, reflecting higher pricing power and a more profitable channel distribution.
Gross profit climbed to $2.9 million, up 38% from $2.1 million in Q2 2025. The margin expansion was largely a result of the wholesale channel’s higher gross‑margin contribution and the company’s disciplined cost structure, which kept cost of goods sold from rising in line with revenue growth. The 6‑percentage‑point lift in gross margin underscores the effectiveness of the full‑price strategy and the company’s ability to maintain pricing discipline even as it scales.
Operating expenses fell 14% to $4.0 million from $4.6 million a year earlier, a result of the company’s ongoing cost‑discipline program and the introduction of an agile supply‑chain model. The operating loss narrowed to $1.1 million from $2.6 million, and adjusted EBITDA turned positive at $0.8 million, a turnaround from a $2.0 million loss in Q2 2025. The improvement reflects both revenue growth and the successful containment of operating costs, demonstrating that the company’s strategic focus on higher‑margin wholesale and a full‑price e‑commerce model is beginning to pay off.
The company’s earnings per share estimate for the quarter was a loss of $0.14, while the actual loss was $0.06 per share, a beat of $0.08. The better‑than‑expected EPS was driven by the combination of higher gross margin, lower operating expenses, and the elimination of one‑time charges that had impacted the prior year. The EPS beat signals that the company’s cost‑control initiatives are translating into improved profitability, even as it continues to invest in growth initiatives.
Management highlighted the progress in its “global luxury lifestyle” strategy. Co‑founder and President Jane Gottschalk said the quarter “marks another step forward on our path to profitability through more efficient execution” and that the company is “entering the key winter season with strong momentum, a disciplined balance sheet, and a sharper operating model designed for sustainable growth.” Chief Financial Officer Chath Weerasinghe added that the company’s “over‑600‑basis‑point gross margin improvement” and “reduced overhead” reflect the success of its financial restructuring and cost realignment.
Despite the operational gains, the company’s SEC filing disclosed substantial doubt about its ability to continue as a going concern, citing ongoing losses and limited cash reserves. The filing also noted that Perfect Moment has received a notice of non‑compliance with NYSE American equity requirements, raising the risk of a potential delisting. These financial concerns temper the positive earnings narrative and highlight the company’s fragile liquidity position.
Market reaction to the earnings was muted, with the stock experiencing moderate selling pressure in after‑hours trading. Analysts and investors focused on the company’s liquidity issues and the NYSE non‑compliance notice, which outweighed the positive revenue beat and margin expansion. The market’s cautious stance reflects the perception that the company’s short‑term operational improvements may not be sufficient to address its long‑term financial challenges.
The company did not provide specific quantitative guidance for the upcoming quarter, relying instead on analyst estimates. The lack of forward guidance, combined with the going‑concern warning and listing compliance risk, signals uncertainty about the company’s near‑term trajectory. Investors will likely monitor the company’s cash burn, liquidity metrics, and any progress on resolving the NYSE compliance issue as key indicators of future performance.
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