New York – – September 07, 2026 -- Fly-E Group, Inc. (Nasdaq: FLYE) reported a net loss of $3.9 million for its fiscal first quarter ended June 30, 2026, nearly double the $2.0 million loss a year earlier, as net revenues fell 48.4% to $2.7 million from $5.3 million. The electric motorcycle, bike and scooter designer said cash on hand dropped to $60,000 as of June 30, 2026, from $0.3 million at the end of March 2026.
Retail contraction cuts store count to four from 20, slashing unit sales
Fly-E reduced its direct retail footprint to four stores as of June 30, 2026, from 20 stores a year earlier. Unit sales volume fell to 7,558 units from 10,448 in the prior-year period. Retail sales revenue dropped 84.3% to $0.6 million from $3.8 million, a decline the company attributed to store closures, price adjustments amid heightened competition, and softened e-bike and e-scooter demand in the New York market following industry-wide lithium-ion battery safety concerns.
Wholesale revenue jumps 46.9% as former stores convert to independent operators
Wholesale revenue rose 46.9% to $2.1 million from $1.4 million, driven by continued product purchases from stores that transitioned to independent operations during the quarter. CEO Zhou (Andy) Ou said the company grew wholesale revenues while investing in technology upgrades to its operational systems and mobile applications, calling the shift part of a move toward a "leaner and asset-light operational model."
Gross margin collapses to 10.9% amid inventory clearance and battery safety concerns
Gross profit fell to $0.3 million from $2.3 million, with gross margin contracting to 10.9% from 42.4%. Cost of revenues declined 20.2% to $2.4 million from $3.1 million on lower sales volume. Management attributed the margin decline to a structural mix shift toward lower-priced wholesale channels, competitive retail pricing, and inventory clearance discounts.
Total operating expenses held flat at $3.8 million. Selling expenses fell 63.3% to $0.5 million from $1.3 million on reduced payroll, rental, utility and depreciation costs tied to the store downsizing. General and administrative expenses rose 37.0% to $3.4 million from $2.4 million, as savings in payroll, professional fees, insurance and travel were offset by higher software development fees for ERP and mobile applications and increased expected credit losses on prepayments and receivables.
Cash reserves fall to $60,000, raising near-term liquidity questions
Basic and diluted losses per share were $2.41, compared with $6.00 in the same period last year. EBITDA was negative $3.5 million, compared with negative $1.3 million a year earlier.