Koss Corporation (NASDAQ: KOSS) reported a fourth-quarter earnings per share of $0.05 for the period ended June 30, 2026, reversing a loss per share of $(0.02) in the same quarter last year.

The Milwaukee-based audio equipment manufacturer saw its quarterly net sales rise 5.8% to $3.26 million, driven primarily by strong direct-to-consumer (DTC) performance. For the full fiscal year, revenue increased 3.1% to $13.02 million, while the annual net loss narrowed significantly to $391,464 from $874,831 in FY25.

Revenue and Segment Performance

Direct-to-consumer channels emerged as the primary growth engine for the quarter. DTC sales surged 36.2% year-over-year, with the company’s own website, Koss.com, recording a 45.6% increase. This digital strength was supported by robust demand for the Porta Pro wired and wireless headphone families.

While domestic distributor sales grew approximately 12%, European markets continued to decline as distributors reduced stock replenishments and maintained lower inventory levels. For the full fiscal year, a significant custom headphones sale to the Education market segment served as a primary driver alongside sustained DTC and domestic distributor growth.

Margin Expansion and Tariff Impact

Gross margins improved materially over the past year, expanding from 37.8% in FY25 to 41.9% in FY26. Management attributed this improvement to two key factors:

• A favorable customer mix featuring higher volumes of higher-margin DTC and domestic distributor sales.
• Tariff refunds totaling $1.0 million received in Q4 for previously paid import duties on products from China, which offset adverse tariff impacts incurred during the year.

Operating expenses also saw movement. Selling, general, and administrative (SG&A) expenses rose to $1.72 million in the quarter from $1.55 million in the prior year, reflecting increased investment in online marketing and social media campaigns.

What the Numbers Show

A critical divergence exists between Koss’s operational performance and its bottom-line results. While the company achieved an operating profit of $267,298 in Q4 (compared to an operating loss of $439,199 in Q4 FY25), the full-year picture tells a different story.

For the twelve months ended June 30, 2026, Koss reported an operating loss of $1.51 million. However, total other income—primarily interest income of $883,995 and other income of $250,000—totaled $1.13 million. This non-operating income covered approximately 75% of the operating deficit, highlighting that the narrowing annual net loss is heavily dependent on financial income rather than core operational profitability.

Financial Summary

Chairman and CEO Michael J. Koss noted that the company’s “diversification by acquisition” strategy aims to reshape its profile over the next five years by creating additional predictable, recurring revenue streams.