Koss stock turns to loss as fiscal first-quarter sales drop

Published on 11/10/2026 at 01:31 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Koss stock faces a weaker fiscal first quarter after sales fell and the company swung to a net loss. Direct-to-consumer sales kept growing.

First-quarter sales and outlook

Koss reported weaker first-quarter results after a large education order from the prior year did not recur.
Direct-to-consumer sales continued to expand, while lower volume pressured gross margin and operating performance.
Management pointed to domestic distributors and direct sales as areas supporting the business through the fiscal year.

KOSS, US5006921085, Illustration mit AI erstellt.

Koss Corporation reported weaker results for the first quarter of fiscal 2027 ended September 30, 2026. In its October 29 release, the Milwaukee-based headphone maker said net sales declined 24.0% year over year to USD 3.094 million.

Koss swung to a net loss of USD 234,168 from net income of USD 243,729 in the prior-year quarter. Basic and diluted loss per share was USD 0.02, compared with earnings of USD 0.03 a year earlier.

Education order weighs on revenue

Management said a significant custom order for an education customer’s new product launch had shipped in the first quarter of the previous year but did not recur in fiscal 2027. Sales to certain domestic distributors were strong, while European distributor sales were supported by inventory replenishment orders.

Direct-to-consumer sales represented approximately 37% of total turnover, according to Chairman and CEO Michael J. Koss. Management said the domestic distributor business and the growing direct channel provide support as the fiscal year progresses.

Margin pressure remains visible

Gross margin declined to 39.5% from 40.0% a year earlier. Koss said lower fixed-cost absorption on the smaller sales base and higher freight rates offset the benefit from customer mix and a USD 76,000 final tariff refund for previously paid import duties on products from China.

The result leaves volume recovery and the development of direct-to-consumer sales as central factors for investors. The company’s comments point to operating leverage as a key sensitivity if sales improve, while lower demand would continue to weigh on manufacturing costs.

Audio products and sales channels

Koss designs, manufactures and distributes high-fidelity headphones and related audio products from its headquarters in Milwaukee, Wisconsin. Its portfolio includes wireless Bluetooth headphones and speakers, computer and telecommunications headsets, active noise-canceling headphones and compact disc recordings under the Koss Classics label. The company sells through distributors, audio retailers, national retail chains, online channels and direct-to-consumer sales in the United States and international markets. Koss operates in the consumer-audio market alongside larger diversified electronics and audio brands, while maintaining a specialized headphone focus.