On September 28, 2026, Atlanta-based Luvu Brands (OTCQB: LUVU), which makes the Liberator line of sex-positioning furniture plus the Jaxx and Avana brands, reported results for the fiscal year ended June 30, 2026. Net sales rose 5.8% to $27.36 million from $25.86 million. Gross margin improved 200 basis points to 31.5%. Operating income was $876,000, against a $69,000 operating loss the prior year. Adjusted EBITDA more than tripled, rising 218% to $1.26 million. Pre-tax income was a positive $429,000. The company still posted a net loss of $246,000, which it attributes to a $675,000 non-cash tax provision, mostly deferred tax tied to the November 2025 renewal of the lease on its manufacturing plant.

Why It Matters

Luvu is one of very few US-listed companies that report audited figures for a pleasure-products business, so its 10-K is a rare look at how a domestic manufacturer in the category actually makes money. It shows two things. First, the "Made in USA" foam-and-fabric model is profitable at the operating level, but only just: $876,000 of operating income on $27 million in sales, a margin of about 3%. Second, the growth is happening at the platform layer rather than on the company's own sites. Wholesale and dropship are growing four times faster than DTC, and Amazon now accounts for more than a third of revenue. Every brand building on Amazon's sexual-wellness shelf faces the same tradeoff. Amazon brings the volume, but it also controls the fees, the gating rules and the customer data. Going into the holidays, the risk factors to watch are freight and raw-material inflation tied to oil, and tariffs on imported inputs. As we reported this week, the new US–China "30-for-30" tariff list cut duties on toys and toasters but left pleasure products out. A company that has just cut costs to get back into profit has little room to absorb another input shock.

Wholesale drove the growth. That segment rose 8% to $19.06 million on an expanding dropship network and more demand from international and new customers. Direct-to-consumer sales across the Liberator, Jaxx and Avana websites grew only 2%, to $8.30 million. The company also restated fiscal 2025 so that $1.16 million of Amazon marketplace fulfilment fees are now booked as selling expense rather than a reduction of revenue. Growth rates are reported on that comparable basis.

The 10-K filed the next day puts a number on the company's biggest dependency. Sales to and through Amazon made up 36% of net sales in fiscal 2026, up from 34% the year before. The filing lists the loss of, or an adverse change in, a major customer relationship as a material risk, and names Amazon, along with mass-market e-tailers and sexual-wellness retailers, as competitors. On costs, Luvu says it is sourcing more raw materials from China and India and has reduced warehouse and production headcount. It warns that import tariffs on raw materials may offset some of those savings. Margins also absorbed higher fuel, freight and raw-material costs from the Iran conflict, which started in the company's third fiscal quarter. Luvu says cost cuts and selective price increases covered those costs this year. Cash ended the year at $1.20 million, up 63%, and operating cash flow turned positive at $773,000 after a $410,000 outflow the year before.

Sources

Update — 2026-10-02

Initial entry — story first created.