Digital Brands Group, Inc. (NASDAQ:DBGI) Q2 2024 Earnings Conference Call August 19, 2024 5:00 PM ET Company Participants John McNamara - IR Hil Davis - CEO Conference Call Participants Operator Greetings. Welcome to the Digital Brands Group Second Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over t ...

Exhibit 99.1 Digital Brands Group Reports Second Quarter 2024 Financial Results Austin, TX— Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its second quarter ended June 30, 2024. "The company paid off over $5.0 million in debt and other liabilities during the first half of this year. The Company also lowered its G&A expenses by $4.5 million during the same period. Based on conversations with strategic pa ...

Financial Performance - Net revenues decreased by $1.1 million to $3.4 million for the three months ended June 30, 2024, compared to $4.5 million in the same period in 2023, primarily due to a delay in wholesale shipments and lower e-commerce revenues[132]. - Gross profit decreased by $0.7 million to $1.6 million for the three months ended June 30, 2024, with a gross margin of 46%, down from 52% in the same period in 2023, attributed to decreased sales[133]. - Operating expenses increased by $9.1 million to $3.8 million for the three months ended June 30, 2024, compared to $(5.2) million in the same period in 2023, influenced by cost-cutting measures and synergies from the Sundry acquisition[134]. - The net loss from continuing operations was $3.5 million for the three months ended June 30, 2024, a decrease of $10.0 million compared to income of $6.5 million in the same period in 2023, primarily due to lower gross profit[137]. - Net revenues decreased by $1.9 million to $6.97 million for the six months ended June 30, 2024, compared to $8.87 million in the same period in 2023, primarily due to a delay in wholesale shipments and lower e-commerce revenues[139]. - Gross profit decreased by $1.0 million to $3.28 million for the six months ended June 30, 2024, with a gross margin of 47%, down from 49% in the same period in 2023, attributed to decreased sales and e-commerce revenue[140]. - Operating expenses increased by $5.6 million to $5.8 million for the six months ended June 30, 2024, with general and administrative expenses decreasing by $4.5 million due to cost-cutting measures and synergies from the Sundry acquisition[141]. - Net loss from continuing operations increased by $4.7 million to $4.19 million for the six months ended June 30, 2024, compared to income of $0.47 million in the same period in 2023, primarily due to lower gross profit and changes in fair value of contingent consideration[143]. - Cash used in operating activities decreased by $0.2 million to $2.75 million for the six months ended June 30, 2024, compared to $2.98 million in the same period in 2023[147]. - Cash provided by financing activities was $2.92 million for the six months ended June 30, 2024, including $4.6 million in net proceeds from common stock issuance[149]. Debt and Equity - As of June 30, 2024, the Company had an aggregate principal amount of debt outstanding of approximately $8.7 million, which is considered significant for its size and current revenue base[101]. - The company had $8.7 million in outstanding principal on debt as of June 30, 2024, with all outstanding loans maturing through 2024[151]. - As of June 30, 2024, the company had cash of $92,794 and a working capital deficit of $14.9 million, raising substantial doubt about its ability to continue as a going concern[145]. - The company intends to fund operations primarily through an equity line of credit agreement and may pursue secondary offerings or debt financings to provide working capital[145]. Operational Challenges - The Company experienced increased costs in raw materials, with fabric prices rising between 10% to 100% depending on various factors[99]. - Shipping costs have increased by 25% to 300% depending on the time of year and shipping origin[99]. - The Company is subject to global supply chain disruptions, impacting lead times and production costs, which have affected operational efficiency[99]. Strategic Initiatives - The Company aims to increase "closet share," defined as the percentage of a customer's clothing units that belong to its brands, to drive revenue growth[97]. - The Company has strategically expanded into omnichannel retailing, blending online and physical sales channels to enhance customer engagement[95]. - The Company has acquired Bailey, Stateside, and Sundry in recent years, focusing on potential synergies from these acquisitions[99]. - The company aims to achieve near-term free cash flow through cash flow positive acquisitions and reducing redundant expenses in acquired companies[112]. - The ability to drive repeat purchases and customer retention is expected to significantly impact revenue growth and operating margin expansion[107]. - The company plans to balance advertising spend between online and offline channels to reduce customer acquisition costs while increasing customer lifetime value[106]. - The company anticipates that operating expenses as a percentage of revenue will decrease as it eliminates duplicative costs across brands[110]. - The company is focused on expanding its customer base through both online and traditional wholesale distribution channels[106]. - The goal is to expand product lines over time to increase growth opportunities, driven by the success of new product launches[107]. Compliance and Regulatory - The Company reported stockholders' equity of $1,602,592 in its Annual Report for the year ended December 31, 2023, indicating non-compliance with Nasdaq's Equity Rule[89]. - The Company has been granted an extension by Nasdaq to demonstrate compliance with listing requirements until September 15, 2023[87].

Austin, TX, Aug. 19, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its second quarter ended June 30, 2024. "The company paid off over $5.0 million in debt and other liabilities during the first half of this year. The Company also lowered its G&A expenses by $4.5 million during the same period. Based on conversations with strategic partners, we believe cleaning up the balance she ...

Austin, TX, Aug. 14, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, will report financial results for the second quarter ended June 30, 2024 on Monday, August 19, 2024 at 4:30 p.m. ET. Management will host a conference call on Monday, August 19, 2024 at 5:00 p.m. ET to discuss the results. The live conference call can be accessed by dialing 888-506-0062 from the U.S. or internationally. The conference I.D. code is 3 ...

Core Insights - Digital Brands Group, Inc. has successfully launched a new direct-to-consumer (DTC) strategy focusing on customer value through a "Build Your Own Bundle" (BYOB) approach, resulting in a 144% increase in orders for its brand DSTLD since mid-June [1][2] - The BYOB strategy has shown even greater success with dedicated email campaigns, leading to over 400% increase in orders [1] Company Strategy - The BYOB strategy was tested in response to the current inflationary environment and the success of discounted bundles in the market, indicating a potential for broader application across other brands within the company [2] - The company aims to leverage customer data and purchase history to create personalized content and enhance customer engagement, thereby increasing "closet share" [4]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______to______ Commission file number: 001-40400 DIGITAL BRANDS GROUP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. ...

Financial Data and Key Metrics Changes - Net revenues decreased to $3.6 million from $4.4 million year-over-year, impacted by wholesale shipments slipping into April [7][20] - Gross margin profit increased to 48.1% from 45.5% year-over-year, with expectations for further improvement as revenues rise [7] - General and administrative expenses decreased to $3.5 million from $4.5 million year-over-year, reflecting a significant reduction [19] - Net operating loss improved to $225,000 from $3.7 million year-over-year, indicating a substantial operational improvement [20] - Net loss was $684,000 or $0.46 per diluted share, compared to a loss of $6.1 million or $27.8 per diluted share a year ago, showing significant progress [20] Business Line Data and Key Metrics Changes - The company experienced a shift in wholesale shipments due to delays, which affected revenue recognition in Q1 [57] - E-commerce strategies are expected to enhance revenue in the second half of the year, alongside the opening of a new store [6][8] - Sales and marketing expenses decreased to $700,000 from $1 million year-over-year, reflecting a more efficient spending strategy [19] Market Data and Key Metrics Changes - The company is focusing on a multi-channel approach, integrating wholesale, e-commerce, and physical stores to drive growth [31][67] - The Stateside brand is growing steadily at 20% annually, driven by competitive pricing and increased brand awareness [32] Company Strategy and Development Direction - The company aims to achieve significant operating leverage from the Sundry acquisition, expecting higher revenues to flow through to net and operating income [29] - A strategic focus on maintaining a healthy mix of sales channels is emphasized, recognizing the importance of physical retail in the apparel market [31][67] - The management is exploring strategic alternatives to address the dislocation between public market valuation and intrinsic asset value [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of shipping delays on Q1 revenues but expressed optimism for Q2 and beyond, anticipating a recovery in sales [57] - The company expects to become cash flow positive soon, with significant reductions in interest expenses anticipated in the coming quarters [35][41] - Management highlighted the importance of building a customer base and the potential for revenue growth as repeat customers increase [45][62] Other Important Information - The company is navigating compliance with NASDAQ listing requirements, having raised additional capital to mitigate risks associated with operational burn rates [3][12] - The management discussed the challenges of predicting revenue due to the emotional nature of wholesale purchasing decisions [44] Q&A Session Summary Question: What is the company's competitive advantage in the retail market? - The company emphasizes the need for a multi-channel approach, integrating wholesale, e-commerce, and physical stores to effectively reach customers [31][67] Question: Can you clarify the situation regarding equity raises in 2024? - Management explained that recent equity activity was precautionary to ensure compliance with NASDAQ requirements, despite previous statements about no equity raises [33] Question: How does the company plan to analyze revenue growth? - Management indicated that revenue drivers are complex and emotional, making it difficult to predict future growth accurately [44] Question: What are the expectations for cash flow positivity? - Management anticipates becoming cash flow positive soon, with significant improvements expected in the coming quarters [35][41]

Loss from operations was $225,000 versus $3.7 million a year ago Austin, TX, May 20, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, today reported financial results for its first quarter ended March 31, 2024. "Despite a timing shift in our wholesale shipments, which shifted revenue from the first quarter to the second quarter, we experienced significant operating expense leverage. We expect this operating leverage t ...

Digital Brands Group, Inc. Company Contact Hil Davis, CEO Email: invest@digitalbrandsgroup.co Phone: (800) 593-1047 SOURCE Digital Brands Group, Inc. Austin, TX, May 17, 2024 (GLOBE NEWSWIRE) -- Digital Brands Group, Inc. ("DBG") (NASDAQ: DBGI), a curated collection of luxury lifestyle, digital-first brands, will report financial results for the first quarter ended March 30, 2024 on Monday, May 20, 2024 at 9:30 a.m. ET. Management will host a conference call on Monday, May 20, 2024 at 10:30 a.m. ET to discu ...