Group 1 - Duluth Holdings Inc. is set to open a new retail store in Maple Grove, Minnesota on September 25, 2025 [1]

Group 1 - The investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective [1] - The approach does not prioritize market-driven dynamics or future price action, instead emphasizing long-term earnings power and competitive dynamics [1] - Most recommendations will be holds, indicating a cautious approach to market conditions, with only a small fraction of companies deemed suitable for purchase at any given time [1] Group 2 - The articles aim to provide valuable information for future investors and introduce skepticism in a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, emphasizing the need for readers to conduct their own due diligence [2][3]

Core Insights - Duluth Trading Company is set to open its newest retail store in Kansas City, Kansas, on September 11, 2025, marking its first new store opening since 2021 [1] - The new store, located in Legends Outlets, spans over 16,000 square feet, with nearly 12,000 square feet dedicated to shopping, and aims to enhance the brand's omnichannel approach [1][2] - The grand opening will feature several events, including a ribbon-cutting ceremony and promotional activities to attract customers [2][3] Company Overview - Duluth Trading Company, based in Mount Horeb, Wisconsin, focuses on high-quality, solution-based apparel and gear for self-reliant individuals [2] - The company emphasizes its commitment to durable products and outstanding customer service, backed by the "No Bull Guarantee" [2] Store Features - The Kansas City store will showcase signature Duluth Trading elements, including vintage tool displays and unique photo opportunities with antique items [1] - The store will be stocked with fall apparel, including popular items like women's Heirloom Gardening Bibs and men's Fire Hose Work Pants [1] Grand Opening Events - The grand opening on September 20 will include a ribbon-cutting ceremony, in-store discounts, and a special raffle for NASCAR race tickets [2][3] - Customers spending $200 or more will receive a complimentary gift, the Duluth Trading Tower of Nuts, available in limited supply [3]

[Part I—Financial Information](index=3&type=section&id=Part%20I%E2%80%94Financial%20Information) This section presents the unaudited condensed consolidated financial statements of Duluth Holdings Inc. for the periods ended August 3, 2025, and February 2, 2025 (balance sheets), and for the three and six months ended August 3, 2025, and July 28, 2024 (statements of operations, comprehensive income, shareholders' equity, and cash flows) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Duluth Holdings Inc. for the periods ended August 3, 2025, and February 2, 2025 (balance sheets), and for the three and six months ended August 3, 2025, and July 28, 2024 (statements of operations, comprehensive income, shareholders' equity, and cash flows) It also includes detailed notes explaining the company's operations, accounting policies, debt, leases, fair value measurements, and other financial disclosures [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric (in thousands) | August 3, 2025 | February 2, 2025 | | :-------------------- | :------------- | :--------------- | | Total current assets | $185,932 | $191,631 | | Total assets | $433,800 | $452,442 | | Total current liabilities | $129,050 | $128,637 | | Total liabilities | $266,742 | $272,763 | | Total shareholders' equity | $167,058 | $179,679 | - **Total assets decreased by** **$18.6 million** from February 2, 2025, to August 3, 2025, primarily due to decreases in inventory and property and equipment, net[9](index=9&type=chunk) - **Total shareholders' equity decreased by** **$12.6 million**, from **$179.7 million** to **$167.1 million**, during the **six-month** period[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric (in thousands) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Net sales | $131,716 | $141,619 | $234,420 | $258,303 | | Gross profit | $72,019 | $73,996 | $125,374 | $135,620 | | Operating income (loss) | $2,402 | $(1,597) | $(9,950) | $(10,568) | | Net income (loss) | $1,293 | $(1,970) | $(13,971) | $(9,835) | | Net income (loss) attributable to controlling interest | $1,261 | $(1,981) | $(14,032) | $(9,854) | | Basic EPS | $0.04 | $(0.06) | $(0.41) | $(0.30) | - **Net sales decreased by 7.0%** for the **three months** ended August 3, 2025, and by **9.2%** for the **six months** ended August 3, 2025, compared to the prior year periods[15](index=15&type=chunk) - The company reported a **net income of $1.3 million** for the **three months** ended August 3, 2025, a significant improvement from a **net loss of $2.0 million** in the prior year's comparable quarter However, for the **six months**, the **net loss widened to $14.0 million** from **$9.8 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) | Metric (in thousands) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) | $1,293 | $(1,970) | $(13,971) | $(9,835) | | Other comprehensive income (loss) | $28 | $96 | $450 | $(9) | | Comprehensive income (loss) | $1,321 | $(1,874) | $(13,521) | $(9,844) | - Other comprehensive income for the **six months** ended August 3, 2025, **was** **$450 thousand**, primarily driven by unrealized security gains, a positive change compared to a loss in the prior year[18](index=18&type=chunk) [Condensed Consolidated Statement of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Shareholders'%20Equity) | Metric (in thousands) | Balance at Feb 2, 2025 | Balance at Aug 3, 2025 | | :-------------------- | :--------------------- | :--------------------- | | Capital stock | $108,009 | $109,499 | | Treasury stock | $(2,332) | $(2,922) | | Retained earnings | $77,721 | $63,689 | | Accumulated other comprehensive (loss) income | $(722) | $(272) | | Total shareholders' equity | $179,679 | $167,058 | - **Shareholders' equity decreased by** **$12.6 million** from February 2, 2025, to August 3, 2025, primarily due to a **net loss of $15.3 million** in the first quarter and **$1.3 million** net income in the second quarter, partially offset by stock-based compensation and other comprehensive income[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric (in thousands) | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(24,436) | $(17,052) | | Net cash used in investing activities | $(3,465) | $(3,086) | | Net cash provided by (used in) financing activities | $30,304 | $(2,232) | | Increase (decrease) in cash and cash equivalents | $2,403 | $(22,370) | | Cash and cash equivalents at end of period | $5,738 | $9,787 | - **Net cash used in operating activities increased to $24.4 million** for the **six months** ended August 3, 2025, from **$17.1 million** in the prior year, mainly due to a decrease in accounts payable and inventory[27](index=27&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - **Net cash provided by financing activities was $30.3 million** for the **six months** ended August 3, 2025, a significant improvement from net cash used of **$2.2 million** in the prior year, primarily driven by proceeds from the line of credit[27](index=27&type=chunk)[148](index=148&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Nature of Operations and Basis of Presentation](index=10&type=section&id=1.%20Nature%20of%20Operations%20and%20Basis%20of%20Presentation) - Duluth Holdings Inc. is a lifestyle brand of men's and women's casual wear, workwear, and accessories, primarily sold through its omnichannel platform[30](index=30&type=chunk) - The company operates as one reportable external segment and consolidates TRI Holdings, LLC as a variable interest entity[31](index=31&type=chunk)[33](index=33&type=chunk) - Inventory is valued at the lower of cost or net realizable value using the first-in, first-out method, with reserves for excess and obsolete items **increasing from $2.1 million** to **$3.7 million**[36](index=36&type=chunk) - The business is seasonal, with a significant portion of revenue and operating profit historically recognized in the fourth fiscal quarter due to the holiday season[39](index=39&type=chunk) [2. Leases](index=12&type=section&id=2.%20LEASES) - The company recognizes right-of-use (ROU) assets and lease liabilities for non-cancelable retail space leases, which expire through **2036**[44](index=44&type=chunk)[45](index=45&type=chunk) | Lease Expense (in thousands) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Total finance lease expense | $1,085 | $1,212 | $2,175 | $2,459 | | Operating lease expense | $4,908 | $5,502 | $9,806 | $10,595 | | Total lease expense | $9,169 | $10,074 | $18,279 | $19,657 | | Lease Metric | August 3, 2025 | July 28, 2024 | | :------------- | :------------- | :------------ | | Weighted-average remaining lease term (Finance leases) | **9 years** | **10 years** | | Weighted-average remaining lease term (Operating leases) | **6 years** | **7 years** | | Weighted-average discount rate (Finance leases) | **4.5%** | **4.5%** | | Weighted-average discount rate (Operating leases) | **4.4%** | **4.2%** | [3. Debt and Credit Agreement](index=14&type=section&id=3.%20DEBT%20AND%20CREDIT%20AGREEMENT) | Debt (in thousands) | August 3, 2025 | February 2, 2025 | | :------------------ | :------------- | :--------------- | | TRI Senior Secured Note | $21,296 | $21,714 | | TRI Note | $3,500 | $3,500 | | Duluth Line of credit | $32,457 | $— | | Total Debt | $57,253 | $25,214 | - The company entered into a new **$100.0 million** asset-based revolving senior credit facility on April 28, 2025, replacing the prior facility, with a maturity date of April 28, 2030 This new facility aims to provide flexibility and liquidity for seasonal inventory builds at a lower interest rate[58](index=58&type=chunk)[61](index=61&type=chunk) - The interest rate for SOFR loans under the New Credit Agreement is adjusted term SOFR plus **150 basis points**, and for base rate loans, it's the Base Rate plus **50 basis points**[59](index=59&type=chunk) [4. Accrued Expenses and Other Current Liabilities](index=16&type=section&id=4.%20ACCURRED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) | Accrued Expenses (in thousands) | August 3, 2025 | February 2, 2025 | | :------------------------------ | :------------- | :--------------- | | Salaries and benefits | $5,389 | $3,897 | | Deferred revenue | $7,715 | $9,783 | | Product returns | $3,984 | $4,568 | | Total accrued expenses and other current liabilities | $33,257 | $35,684 | - **Total accrued expenses and other current liabilities decreased by $2.4 million** from February 2, 2025, to August 3, 2025, primarily due to decreases in deferred revenue and product returns, partially offset by an increase in salaries and benefits[65](index=65&type=chunk) [5. Fair Value](index=16&type=section&id=5.%20FAIR%20VALUE) - The company's available-for-sale security is categorized as a Level 3 instrument, valued using a discounted cash flow method[68](index=68&type=chunk) | Security (in thousands) | Cost or Amortized Cost | Estimated Fair Value (Aug 3, 2025) | | :---------------------- | :--------------------- | :--------------------------------- | | Corporate trust | $5,249 | $4,834 | - The fair value of the TRI Long-term debt (Level 3) **was** **$23.0 million** as of August 3, 2025, compared to its carrying amount of **$24.8 million**[73](index=73&type=chunk) [6. Variable Interest Entity](index=17&type=section&id=6.%20VARIABLE%20INTEREST%20ENTITY) - Duluth Holdings Inc. consolidates TRI Holdings, LLC as a variable interest entity because it is deemed the primary beneficiary, having the power to direct TRI's activities and the obligation/right to absorb/receive significant benefits[74](index=74&type=chunk)[75](index=75&type=chunk) - TRI's primary purpose is to own the real property for the company's headquarters in Mt Horeb, Wisconsin, which Duluth leases[75](index=75&type=chunk) | TRI Consolidated Amounts (in thousands) | August 3, 2025 | February 2, 2025 | | :------------------------------------ | :------------- | :--------------- | | Total assets | $22,033 | $22,332 | | TRI long-term debt | $23,821 | $24,283 | [7. Earnings (Loss) Per Share](index=18&type=section&id=7.%20EARNINGS%20(LOSS)%20PER%20SHARE) | EPS (Class A and Class B) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :------------------------ | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $0.04 | $(0.06) | $(0.41) | $(0.30) | | Diluted EPS | $0.04 | $(0.06) | $(0.41) | $(0.30) | - **Diluted loss per share excluded** **0.2 million** and **0.0 million** unvested restricted stock for the **six months** ended August 3, 2025, and July 28, 2024, respectively, due to their anti-dilutive effect from net losses[79](index=79&type=chunk) [8. Stock-Based Compensation](index=18&type=section&id=8.%20STOCK-BASED%20COMPENSATION) - **Total stock compensation expense recognized was** **$1.1 million** for the **three months** ended August 3, 2025, and **$1.3 million** for the **six months** ended August 3, 2025[82](index=82&type=chunk) - As of August 3, 2025, unrecognized compensation expense related to restricted stock awards **was** **$4.6 million**, expected to be recognized over a weighted average period of **2.5 years**[82](index=82&type=chunk) | Unvested Restricted Stock Activity | Shares (thousands) | Weighted Average Fair Value per Share | | :--------------------------------- | :----------------- | :------------------------------------ | | Outstanding at February 2, 2025 | **1,686** | **$6.02** | | Granted | **2,807** | **$1.90** | | Vested | **(1,061)** | **$4.93** | | Forfeited | **(1,136)** | **$4.04** | | Outstanding at August 3, 2025 | **2,297** | **$2.48** | [9. Property and Equipment](index=19&type=section&id=9.%20PROPERTY%20AND%20EQUIPMENT) | Property and Equipment (in thousands) | August 3, 2025 | February 2, 2025 | | :------------------------------------ | :------------- | :--------------- | | Total gross property and equipment | $265,692 | $268,132 | | Accumulated depreciation and amortization | $(165,720) | $(159,450) | | Property and equipment, net | $103,224 | $111,560 | - **Net property and equipment decreased by $8.3 million** from February 2, 2025, to August 3, 2025, primarily due to accumulated depreciation and amortization[83](index=83&type=chunk) [10. Revenue](index=19&type=section&id=10.%20REVENUE) - Revenue primarily consists of sales of apparel, footwear, and hard goods, recognized upon shipment for direct-to-consumer sales and at the point of sale for store revenue[84](index=84&type=chunk) | Sales Channel (in thousands) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :--------------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Direct-to-consumer | $79,135 | $91,684 | $141,687 | $167,128 | | Stores | $52,581 | $49,935 | $92,733 | $91,175 | | Total Net Sales | $131,716 | $141,619 | $234,420 | $258,303 | - **Direct-to-consumer sales decreased significantly**, while **store sales saw a modest increase** for both the **three** and **six months** ended August 3, 2025, compared to the prior year[87](index=87&type=chunk) | Contract Liabilities (Gift Cards) (in thousands) | August 3, 2025 | July 28, 2024 | | :----------------------------------------------- | :------------- | :------------ | | Balance as of beginning of period | $9,782 | $9,579 | | Gift cards sold | $5,318 | $5,100 | | Gift cards redeemed | $(7,240) | $(7,043) | | Gift card breakage | $(145) | $(153) | | Balance as of end of period | $7,715 | $7,483 | [11. Income Taxes](index=20&type=section&id=11.%20INCOME%20TAXES) - The effective tax rate for controlling interest **was** **(6%)** for the **six months** ended August 3, 2025, compared to **21%** for the prior year, primarily due to the establishment of a valuation allowance on deferred tax assets[90](index=90&type=chunk) - The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, permanently extends **100%** bonus depreciation, domestic research cost expensing, and the ability to deduct interest expense, with the company currently evaluating its future impact[91](index=91&type=chunk)[93](index=93&type=chunk) [12. Segment Reporting](index=21&type=section&id=12.%20SEGMENT%20REPORTING) - The company operates as one reportable segment, with the Chief Executive Officer acting as the Chief Operating Decision Maker (CODM) who receives discrete financial information for gross margin and a summarized comprehensive statement of income[94](index=94&type=chunk) | Segment Metrics (in thousands) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :----------------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Net sales | $131,716 | $141,619 | $234,420 | $258,303 | | Gross margin | $72,019 | $73,996 | $125,374 | $135,620 | | Total selling, general and administrative | $68,767 | $73,997 | $134,474 | $144,592 | | Operating income (loss) | $2,402 | $(1,597) | $(9,950) | $(10,568) | [13. Restructuring](index=21&type=section&id=13.%20RESTRUCTURING) - On June 4, 2025, the company underwent a reduction in force to right-size its expense structure, **incurring $850 thousand in employee termination benefit expense** for the **three** and **six months** ended August 3, 2025[96](index=96&type=chunk)[99](index=99&type=chunk) - In July 2024, the company amended a lease for a legacy fulfillment center, accelerating its expiration and **incurring a $3.7 million termination penalty**, amortized over the modified lease term[97](index=97&type=chunk) | Restructuring Expenses (in thousands) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Early contract termination expense | $— | $920 | | Lease remeasurement expense | $— | $293 | | Accelerated depreciation expense | $— | $383 | | Employee termination benefit expense | $850 | $— | | Total restructuring expenses | $850 | $1,596 | [14. Recent Accounting Pronouncements](index=22&type=section&id=14.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) - The company adopted ASU No **2023-07**, 'Segment Reporting: Improvements to Reportable Segment Disclosures,' on January 29, 2024, enhancing disclosures about significant segment expenses[100](index=100&type=chunk) - Management is currently evaluating the effects of ASU No **2023-09**, 'Income Taxes: Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024[101](index=101&type=chunk) - ASU No **2024-03**, 'Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures,' effective for annual periods beginning after December 15, 2027, requires more detailed expense disclosures[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key financial metrics, economic conditions, and how business performance is assessed It details the changes in net sales, gross profit, selling, general and administrative expenses, and net income/loss for the three and six months ended August 3, 2025, compared to the prior year, and discusses liquidity and capital resources [Overview](index=24&type=section&id=Overview) - Duluth Holdings Inc. is a lifestyle brand offering men's and women's casual wear, workwear, and accessories through its omnichannel platform, operating **61** retail stores and **three** outlet stores as of August 3, 2025[109](index=109&type=chunk) - The company emphasizes innovative, durable, and functional products, positioning itself as the 'Modern, Self-Reliant American Lifestyle' brand with a heritage in workwear[110](index=110&type=chunk) - The macroeconomic environment is characterized by inflation, tariff, and recessionary concerns, creating uncertainty regarding consumer demand and store traffic patterns[114](index=114&type=chunk) [How We Assess the Performance of Our Business](index=24&type=section&id=How%20We%20Assess%20the%20Performance%20of%20Our%20Business) - **Net sales decreased by 7.0%** in Q2 FY25 and **9.2%** in H1 FY25 compared to prior year periods[115](index=115&type=chunk) - **Net income was $1.3 million** in Q2 FY25 (vs. **$2.0 million net loss** in Q2 FY24), while **net loss was $14.0 million** in H1 FY25 (vs. **$9.8 million net loss** in H1 FY24)[115](index=115&type=chunk) - **Adjusted EBITDA increased to $12.0 million** in Q2 FY25 (vs. **$10.5 million** in Q2 FY24) but **decreased to $8.2 million** in H1 FY25 (vs. **$12.3 million** in H1 FY24)[115](index=115&type=chunk) - **Adjusted EBITDA is used as a key measure of operating performance**, excluding financing and investing activities, and is also a factor in employee bonus compensation[119](index=119&type=chunk)[120](index=120&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) | Metric (in thousands) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Net sales | $131,716 | $141,619 | $234,420 | $258,303 | | Gross profit | $72,019 | $73,996 | $125,374 | $135,620 | | Gross margin % | 54.7% | 52.3% | 53.5% | 52.5% | | Selling, general and administrative expenses | $68,767 | $73,997 | $134,474 | $144,592 | | Operating income (loss) | $2,402 | $(1,597) | $(9,950) | $(10,568) | | Net income (loss) attributable to controlling interest | $1,261 | $(1,981) | $(14,032) | $(9,854) | - **Net sales decreased** due to a decline in web traffic from reduced promotional activity[124](index=124&type=chunk)[130](index=130&type=chunk) - **Gross margin rate increased** for both periods, driven by higher average unit retail sales from reduced promotional activity and improved product costs from direct-to-factory sourcing[125](index=125&type=chunk)[131](index=131&type=chunk) - **Selling, general and administrative expenses decreased** in absolute dollars but **increased as a percentage of net sales** for the **six-month** period due to the overall decrease in net sales[126](index=126&type=chunk)[127](index=127&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) [Reconciliation of Net Income (Loss) to EBITDA and EBITDA to Adjusted EBITDA](index=27&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20EBITDA%20and%20EBITDA%20to%20Adjusted%20EBITDA) | Metric (in thousands) | Three Months Ended Aug 3, 2025 | Three Months Ended Jul 28, 2024 | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) | $1,293 | $(1,970) | $(13,971) | $(9,835) | | EBITDA | $9,976 | $7,886 | $5,341 | $8,352 | | Adjusted EBITDA | $11,999 | $10,493 | $8,206 | $12,331 | - **Adjusted EBITDA increased by $1.5 million to $12.0 million** (**9.1%** of net sales) for the **three months** ended August 3, 2025, compared to **$10.5 million** (**7.4%** of net sales) in the prior year[137](index=137&type=chunk) - **Adjusted EBITDA decreased by $4.1 million to $8.2 million** (**3.5%** of net sales) for the **six months** ended August 3, 2025, compared to **$12.3 million** (**4.8%** of net sales) in the prior year[138](index=138&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - Primary liquidity sources are cash from operating activities and a credit facility, with cash needs for inventory, marketing, payroll, leases, and capital expenditures[139](index=139&type=chunk) - Net working capital **was** **$56.9 million**, including **$5.7 million** in cash and cash equivalents, as of August 3, 2025[139](index=139&type=chunk) - Expected capital expenditures for fiscal **2025** are approximately **$17.0 million**, primarily for **two** new stores and information technology investments[140](index=140&type=chunk) | Cash Flow Summary (in thousands) | Six Months Ended Aug 3, 2025 | Six Months Ended Jul 28, 2024 | | :------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(24,436) | $(17,052) | | Net cash used in investing activities | $(3,465) | $(3,086) | | Net cash provided by (used in) financing activities | $30,304 | $(2,232) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no significant changes in the market risks previously described in the company's 2024 Form 10-K It refers to Note 3 for disclosures on interest rates related to borrowings under the credit agreement - **No significant changes in market risks were reported** compared to the **2024** Form **10-K**[154](index=154&type=chunk) - Information on interest rates for credit agreement borrowings is detailed in Note **3**, 'Debt and Credit Agreement'[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of August 3, 2025, based on an evaluation by the Chief Executive Officer and Chief Financial Officer It also states that there were no material changes in internal control over financial reporting during the period - The Chief Executive Officer and Chief Financial Officer **concluded that disclosure controls and procedures were effective** as of August 3, 2025[155](index=155&type=chunk) - **No material changes in internal control over financial reporting occurred** during the quarter ended August 3, 2025[156](index=156&type=chunk) [Part II—Other Information](index=29&type=section&id=Part%20II%E2%80%94Other%20Information) [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is not currently party to any legal proceedings that would have a material adverse effect on its business, financial condition, operating results, or cash flows Reserves are established for specific legal matters when an unfavorable outcome is probable and estimable - **No material adverse legal proceedings are currently pending against the company**[157](index=157&type=chunk)[158](index=158&type=chunk) - Reserves for legal matters are established when an unfavorable outcome is probable and estimable[158](index=158&type=chunk) [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the company's fiscal 2024 Annual Report on Form 10-K - **No material changes to risk factors were reported** compared to the fiscal **2024** Annual Report on Form **10-K**[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that the company did not sell any unregistered equity securities during the quarter ended August 3, 2025 It details shares acquired from employees to satisfy minimum tax withholding requirements upon the vesting of restricted stock - **No unregistered equity securities were sold** during the quarter ended August 3, 2025[160](index=160&type=chunk) | Period | Total number of shares purchased | Average price paid per share | | :------------------------- | :------------------------------- | :--------------------------- | | May 5, 2025 - June 1, 2025 | **205,279** | **$1.77** | | Total | **205,279** | $— | - The shares purchased were solely from employees to satisfy tax withholding obligations on vested restricted stock[161](index=161&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) This section confirms that no director or Section 16 officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended August 3, 2025 - **No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated** by directors or Section **16** officers during the quarter[163](index=163&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the First Amendment to the New Credit Agreement, certifications from the CEO and CFO, and XBRL-related documents - Key exhibits include the First Amendment to the New Credit Agreement (Exhibit **10.1**) and certifications from the CEO and CFO (Exhibits **31.1**, **31.2**, **32.1**, **32.2**)[165](index=165&type=chunk) - XBRL-related information (Exhibit **101**) is furnished, not filed, in accordance with Regulation S-T[165](index=165&type=chunk) [Signatures](index=32&type=section&id=Signatures) This section contains the signature of the registrant, Duluth Holdings Inc., by its Senior Vice President, Chief Financial Officer, Heena Agrawal, on September 5, 2025, certifying the report - The report **was signed by** Heena Agrawal, Senior Vice President, Chief Financial Officer, on behalf of Duluth Holdings Inc. on September 5, 2025[169](index=169&type=chunk)

Financial Data and Key Metrics Changes - The company reported second quarter 2025 net sales of $131.7 million, a decline of 7% year-over-year, with gross margin expanding by 240 basis points to 54.7% [19][21] - Adjusted EBITDA increased by $1.5 million to $12 million, representing 9.1% of sales [19][21] - SG&A expenses were $68.8 million, down $5.2 million or 7.1% from the previous year, improving as a percentage of sales to 52.2% [22][21] Business Line Data and Key Metrics Changes - Direct channel sales, excluding wholesale, decreased by 18%, primarily due to a decline in web traffic, although average order value increased [20] - Retail store sales increased by 5.3%, driven by improved traffic trends and higher average order values [20][12] - Men's sales declined by 8%, while women's sales fell by 11.3%, but AKHG grew by 11.4% across both men's and women's categories [20] Market Data and Key Metrics Changes - The company experienced a 12% reduction in ending inventory compared to the prior year, with inventory levels currently 6% lower than last year [23][24] - The inventory mix included 78% in current products and 22% in clearance goods, with clearance inventory reduced to 16% of the total as of September [25] Company Strategy and Development Direction - The company is focused on a turnaround strategy that includes resetting promotional cadence, improving inventory management, and strengthening operational execution [18][19] - Plans to reduce SKU and style counts by over 20% for the upcoming seasons to create a more focused assortment [16][41] - The company aims to achieve $10 million in cost savings for fiscal 2025 through headcount reductions and controlling expenses [22][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain discipline on promotional activities and achieve profitability despite macroeconomic challenges [34][36] - The anticipated impact of tariffs is approximately $15 million for the current year, with price increases implemented to mitigate these costs [27][28] - The company is maintaining its fiscal year 2025 financial guidance, expecting adjusted EBITDA in the range of $20 million to $25 million [26] Other Important Information - The company is set to open two new stores, marking its first new openings since 2021, in Kansas City and Maple Grove [12] - Capital expenditures for the first half were $9.7 million, with plans to maintain a capital expenditure plan of approximately $17 million for the year [29] Q&A Session Summary Question: Metrics for Pullback in Promotional Activity - Management highlighted gross margin dollars as the primary measure for assessing promotional activity, emphasizing profitability as the main objective [33][34] Question: Gross Margin Rate Expectations - Management indicated that price increases and vendor negotiations are helping to mitigate tariff impacts, with expectations for gross margin rate expansion in the second half of the year [35][36] Question: SG&A Cost Savings Progress - Management noted that they are about a third of the way towards achieving the $10 million cost savings target, primarily from headcount reductions and controllable expenses [38][39] Question: Long-term Margin Targets - Management stated that achieving a strong margin profile will depend on managing expenses and inventory effectively, with a focus on SKU productivity and promotional cadence [40][41]

Financial Performance - Q2 2025 - Net income was $1.3 million, compared to a net loss of $2.0 million in the prior year's second quarter[10] - Reported EPS was $0.04, with adjusted EPS at $0.03, after adjusting for restructuring charges of $0.7 million (net of tax) and a tax valuation allowance of ($0.9) million[10] - Adjusted EBITDA increased by $1.5 million year-over-year to $12.0 million, representing 9.1% of net sales[10] - Inventory decreased by $20.7 million, a 12.2% reduction compared to the previous year[10] Balance Sheet and Liquidity - Cash and cash equivalents totaled $5.7 million, with net liquidity at $73.3 million[10] - Total debt stood at $32.5 million, resulting in a debt to capital ratio of 16.3%[17] Fiscal Year 2025 Outlook - The company is maintaining its fiscal year 2025 financial guidance, with an adjusted EBITDA range of $20 to $25 million[10]

[Executive Summary & Highlights](index=1&type=section&id=1.%20Executive%20Summary%20%26%20Highlights) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=1.1%20Second%20Quarter%202025%20Financial%20Highlights) Duluth Holdings Inc. reported a net income of **$1.3 million** for Q2 2025, a significant improvement from a net loss in the prior year, driven by gross margin expansion and SG&A leverage, with Adjusted EBITDA also increasing and inventory levels reduced Q2 2025 Key Financial Highlights | Metric | Amount | | :-------------------- | :------------------- | | Net Income | $1.3 million (vs. net loss of $2.0 million YoY) | | Adjusted EBITDA | $12.0 million (up $1.5 million YoY) | | Adjusted EBITDA as % of Net Sales | 9.1% | | Reported EPS | $0.04 | | Adjusted EPS | $0.03 | | Net Liquidity | $73.3 million | | Inventory (YoY Change) | Down $20.7 million (12.2%) | [Management Commentary](index=1&type=section&id=1.2%20Management%20Commentary) President and CEO Stephanie Pugliese expressed encouragement regarding Q2 results, attributing improvements to promotional resets, expense management, and inventory discipline, while highlighting ongoing efforts in product sourcing, fulfillment optimization, and store portfolio rationalization, with a future focus on marketing, product assortment, and core strengths to restore profitable growth - Management is encouraged by Q2 results, reflecting positive momentum in turnaround efforts[4](index=4&type=chunk) - Key improvements include promotional reset, expense management, and inventory discipline, leading to enhanced gross margin, reduced SG&A, and lower inventory levels[4](index=4&type=chunk) - Future focus areas include leveraging foundational work in product sourcing, optimizing fulfillment center network, rationalizing store portfolio, simplifying the business, reducing expenses, mitigating tariff impacts, and refocusing marketing and product assortment to restore profitable growth[4](index=4&type=chunk)[7](index=7&type=chunk) [Operating Results](index=2&type=section&id=2.%20Operating%20Results) [Net Sales](index=2&type=section&id=2.1%20Net%20Sales) Net sales for Q2 2025 decreased by **7.0%** to **$131.7 million**, with direct-to-consumer sales seeing a **13.7%** decline due to lower traffic, while retail store sales increased by **5.3%** driven by higher average order values Q2 2025 Net Sales Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Net Sales | $131.7 | $141.6 | -7.0% | | Direct-to-consumer Net Sales | $79.1 | N/A | -13.7% | | Retail Store Net Sales | $52.6 | N/A | +5.3% | - Direct-to-consumer net sales decreased due to lower traffic, partially offset by higher average order values[8](index=8&type=chunk) - Retail store net sales increased primarily driven by higher average order values[8](index=8&type=chunk) [Gross Margin](index=2&type=section&id=2.2%20Gross%20Margin) Gross margin improved to **54.7%** of net sales in Q2 2025, up from **52.3%** in the prior year, primarily due to reduced promotional activity leading to higher average unit retail sales and improved product costs from direct-to-factory sourcing Gross Margin Rate | Period | Gross Margin Rate | | :----- | :---------------- | | Q2 2025 | 54.7% | | Q2 2024 | 52.3% | | Change (YoY) | +2.4 percentage points | - The increase in gross margin rate was primarily driven by an increase in average unit retail sales from reduced promotional activity coupled with an improvement in product costs from direct-to-factory sourcing initiative[9](index=9&type=chunk) [Selling, General and Administrative Expenses](index=2&type=section&id=2.3%20Selling,%20General%20and%20Administrative%20Expenses) SG&A expenses decreased by **7.1%** to **$68.8 million** in Q2 2025, with SG&A as a percentage of net sales slightly decreasing to **52.2%**, mainly due to leverage on outbound shipping costs from higher average order values and reductions in personnel and depreciation expenses SG&A Expenses Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :---------------- | :--------- | | SG&A Expenses | $68.8 | $74.0 | -$5.2 | -7.1% | | SG&A as % of Net Sales | 52.2% | 52.3% | -0.1 pp | N/A | - The decrease in SG&A as a percentage of net sales was mainly driven by leverage on outbound shipping costs due to higher average order values coupled with a reduction in personnel and depreciation expenses[10](index=10&type=chunk) [Financial Position & Liquidity](index=2&type=section&id=3.%20Financial%20Position%20%26%20Liquidity) [Balance Sheet and Liquidity](index=2&type=section&id=3.1%20Balance%20Sheet%20and%20Liquidity) As of August 3, 2025, the company reported **$5.7 million** in cash and cash equivalents, **$56.9 million** in net working capital, **$32.5 million** in outstanding debt on its revolving line of credit, and **$73.3 million** in net liquidity Key Balance Sheet and Liquidity Metrics (as of August 3, 2025) | Metric | Amount (Millions) | | :-------------------------------- | :---------------- | | Cash and cash equivalents | $5.7 | | Net working capital | $56.9 | | Outstanding debt (revolving line of credit) | $32.5 | | Net liquidity | $73.3 | [Fiscal Year 2025 Outlook](index=2&type=section&id=4.%20Fiscal%20Year%202025%20Outlook) The Company is maintaining its previously issued fiscal 2025 financial guidance - The Company is maintaining its previously issued fiscal 2025 financial guidance[12](index=12&type=chunk) [Conference Call Information](index=2&type=section&id=5.%20Conference%20Call%20Information) A conference call and audio webcast for analysts and investors is scheduled for September 4, 2025, at 9:30 am Eastern Time to discuss the results, with pre-registration available to expedite entry - A conference call and audio webcast with analysts and investors will be held on Thursday, September 4, 2025, at 9:30 am Eastern Time[13](index=13&type=chunk) - Investors can pre-register for the earnings conference call to expedite their entry and avoid waiting for a live operator[14](index=14&type=chunk) - A conference call replay will be available through September 10, 2025[16](index=16&type=chunk) [About Duluth Trading](index=3&type=section&id=6.%20About%20Duluth%20Trading) Duluth Trading is a lifestyle brand offering high-quality, solution-based casual wear, workwear, and accessories for men and women, emphasizing an engaging customer experience through its website, catalogs, and retail stores, backed by a "No Bull Guarantee" - Duluth Trading is a lifestyle brand for the Modern, Self-Reliant American, offering high quality, solution-based casual wear, workwear and accessories for men and women[17](index=17&type=chunk) - Products are available through a content-rich website, catalogs, and "store like no other" retail locations, with marketing incorporating humor and storytelling[17](index=17&type=chunk) - The company is committed to outstanding customer service backed by its "No Bull Guarantee"[17](index=17&type=chunk) [Non-GAAP Measurements](index=3&type=section&id=7.%20Non-GAAP%20Measurements) [Definition and Purpose of Non-GAAP Measures](index=3&type=section&id=7.1%20Definition%20and%20Purpose%20of%20Non-GAAP%20Measures) Management uses non-GAAP financial measures like Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS to provide additional meaningful comparisons, insights into operating trends, and facilitate peer company comparisons, excluding unusual or non-comparable items such as restructuring expenses, impairment expenses, and tax valuation allowances - Non-GAAP financial measures (Adjusted EBITDA, Adjusted Net Income, Adjusted EPS) are used to provide additional meaningful comparisons, insight into operating trends, and facilitate comparisons between peer companies[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - Adjusted EBITDA excludes interest, taxes, depreciation, amortization, and certain items that are unusual in nature or not comparable from period to period[19](index=19&type=chunk) - Adjusted Net Income (Loss) and Adjusted EPS exclude restructuring expenses, impairment expenses, and an addition to the valuation allowance on deferred tax assets that are not comparable from period to period[20](index=20&type=chunk) [Forward-Looking Statements & Risks](index=4&type=section&id=8.%20Forward-Looking%20Statements%20%26%20Risks) The press release contains forward-looking statements regarding Duluth Trading's plans, objectives, and future performance, which are subject to various risks and uncertainties, including inflation, economic uncertainties, international trade conditions (tariffs), supply chain disruptions, inventory management, brand image, consumer confidence, e-commerce platform issues, debt covenants, natural disasters, and regulatory changes, among others - The press release includes forward-looking statements concerning Duluth Trading's plans, objectives, goals, beliefs, business strategies, future events, business conditions, and financial outlook[22](index=22&type=chunk) - Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially, including the impact of inflation, economic uncertainties, and the susceptibility of merchandise price and availability to international trade conditions like tariffs[22](index=22&type=chunk) - Other risks include disruptions to the distribution network, supply chains and operations, failure to effectively manage inventory levels, adapting to declines in consumer confidence, and disruptions to the e-commerce platform[22](index=22&type=chunk) [Accounting Correction](index=5&type=section&id=9.%20Accounting%20Correction) The Company revised prior period financial statements for an immaterial accounting correction related to sales tax collections, impacting accrued expenses, deferred taxes, and retained earnings on the Condensed Consolidated Balance Sheets and other financial statements - The Company revised its prior period financial statements for an accounting correction related to sales tax collections[24](index=24&type=chunk) - The impacts of these revisions were not material to the Company's previously filed financial statements and primarily related to accrued expenses and other current liabilities, deferred taxes, and retained earnings[24](index=24&type=chunk) [Investor Contacts](index=5&type=section&id=10.%20Investor%20Contacts) Investor inquiries can be directed to Heena Agrawal, Senior Vice President and Chief Financial Officer, or Chris Steffes, Senior Director of FP&A, via email - Investor contacts are Heena Agrawal (Senior Vice President and Chief Financial Officer) and Chris Steffes (Senior Director of FP&A)[25](index=25&type=chunk) - Investor inquiries can be sent to IR@duluthtrading.com[25](index=25&type=chunk) [Financial Statements](index=6&type=section&id=11.%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=6&type=section&id=11.1%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of **$433.8 million** as of August 3, 2025, a decrease from **$488.6 million** in July 2024, with total liabilities also decreasing to **$266.7 million** from **$276.6 million**, while total shareholders' equity declined to **$167.1 million** from **$212.0 million** over the same period, with key changes including a decrease in inventory and an increase in the line of credit balance Condensed Consolidated Balance Sheets (Amounts in thousands) | Metric | August 3, 2025 | July 28, 2024 | Change (YoY) | | :-------------------------- | :------------- | :------------ | :----------- | | Total Assets | $433,800 | $488,609 | -$54,809 | | Total Liabilities | $266,742 | $276,618 | -$9,876 | | Total Shareholders' Equity | $167,058 | $211,991 | -$44,933 | | Inventory, net | $148,051 | $168,718 | -$20,667 | | Line of credit | $32,457 | $0 | +$32,457 | [Consolidated Statements of Operations](index=7&type=section&id=11.2%20Consolidated%20Statements%20of%20Operations) For the three months ended August 3, 2025, net sales decreased by **7.0%** to **$131.7 million**, but the company returned to a net income of **$1.3 million** compared to a net loss of **$2.0 million** in the prior year, with gross profit slightly decreasing but operating income turning positive, while for the six months, net loss increased Consolidated Statements of Operations (Three Months Ended, Amounts in thousands) | Metric | August 3, 2025 | July 28, 2024 | Change (YoY) | | :------------------------------------ | :------------- | :------------ | :----------- | | Net sales | $131,716 | $141,619 | -$9,903 | | Gross profit | $72,019 | $73,996 | -$1,977 | | Operating income (loss) | $2,402 | $(1,597) | +$3,999 | | Net income (loss) | $1,293 | $(1,970) | +$3,263 | | Basic earnings per share | $0.04 | $(0.06) | +$0.10 | Consolidated Statements of Operations (Six Months Ended, Amounts in thousands) | Metric | August 3, 2025 | July 28, 2024 | Change (YoY) | | :------------------------------------ | :------------- | :------------ | :----------- | | Net sales | $234,420 | $258,303 | -$23,883 | | Net income (loss) | $(13,971) | $(9,835) | -$4,136 | | Basic earnings per share | $(0.41) | $(0.30) | -$0.11 | [Consolidated Statements of Cash Flows](index=8&type=section&id=11.3%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended August 3, 2025, net cash used in operating activities increased to **$24.4 million** from **$17.1 million** in the prior year, primarily due to changes in inventory and trade accounts payable, with net cash provided by financing activities significantly increasing to **$30.3 million**, mainly from proceeds from the line of credit, leading to an overall increase in cash and cash equivalents Consolidated Statements of Cash Flows (Six Months Ended, Amounts in thousands) | Metric | August 3, 2025 | July 28, 2024 | Change (YoY) | | :------------------------------------ | :------------- | :------------ | :----------- | | Net cash used in operating activities | $(24,436) | $(17,052) | -$7,384 | | Net cash used in investing activities | $(3,465) | $(3,086) | -$379 | | Net cash provided by (used in) financing activities | $30,304 | $(2,232) | +$32,536 | | Increase (decrease) in cash and cash equivalents | $2,403 | $(22,370) | +$24,773 | | Cash and cash equivalents at end of period | $5,738 | $9,787 | -$4,049 | - Net cash provided by financing activities significantly increased, primarily due to proceeds from the line of credit (**$76.2 million** in 2025 vs. **$40.5 million** in 2024)[32](index=32&type=chunk) [Non-GAAP Reconciliations](index=9&type=section&id=12.%20Non-GAAP%20Reconciliations) [Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA](index=9&type=section&id=12.1%20Reconciliation%20of%20Net%20Income%20(Loss)%20to%20EBITDA%20and%20Adjusted%20EBITDA) For Q2 2025, EBITDA was **$10.0 million**, and Adjusted EBITDA was **$12.0 million**, showing an increase from the prior year's **$7.9 million** and **$10.5 million**, respectively, with adjustments primarily including long-term incentive expense and restructuring expense EBITDA and Adjusted EBITDA (Three Months Ended, Amounts in thousands) | Metric | August 3, 2025 | July 28, 2024 | Change (YoY) | | :-------------------- | :------------- | :------------ | :----------- | | Net income (loss) | $1,293 | $(1,970) | +$3,263 | | EBITDA | $9,976 | $7,886 | +$2,090 | | Adjusted EBITDA | $11,999 | $10,493 | +$1,506 | EBITDA and Adjusted EBITDA (Six Months Ended, Amounts in thousands) | Metric | August 3, 2025 | July 28, 2024 | Change (YoY) | | :-------------------- | :------------- | :------------ | :----------- | | Net income (loss) | $(13,971) | $(9,835) | -$4,136 | | EBITDA | $5,341 | $8,352 | -$3,011 | | Adjusted EBITDA | $8,206 | $12,331 | -$4,125 | [Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Adjusted EPS](index=9&type=section&id=12.2%20Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20Net%20Income%20(Loss)%20and%20Adjusted%20EPS) For Q2 2025, adjusted net income attributable to controlling interest was **$1.1 million**, resulting in an adjusted EPS of **$0.03**, a significant improvement from an adjusted net loss of **$0.8 million** and adjusted EPS of **$(0.02)** in the prior year, with adjustments including restructuring expenses and a tax valuation allowance Adjusted Net Income (Loss) and Adjusted EPS (Three Months Ended, Amounts in thousands, except per share) | Metric | August 3, 2025 | July 28, 2024 | Change (YoY) | | :------------------------------------ | :------------- | :------------ | :----------- | | Net income (loss) attributable to controlling interest | $1,261 | $(1,981) | +$3,242 | | Adjusted net income (loss) attributable to controlling interest | $1,061 | $(752) | +$1,813 | | Adjusted EPS | $0.03 | $(0.02) | +$0.05 | Adjusted Net Income (Loss) and Adjusted EPS (Six Months Ended, Amounts in thousands, except per share) | Metric | August 3, 2025 | July 28, 2024 | Change (YoY) | | :------------------------------------ | :------------- | :------------ | :----------- | | Net income (loss) attributable to controlling interest | $(14,032) | $(9,854) | -$4,178 | | Adjusted net income (loss) attributable to controlling interest | $(9,695) | $(8,625) | -$1,070 | | Adjusted EPS | $(0.28) | $(0.26) | -$0.02 |

分组1 - Duluth Holdings reported quarterly earnings of $0.03 per share, exceeding the Zacks Consensus Estimate of a loss of $0.05 per share, and compared to a loss of $0.02 per share a year ago, representing an earnings surprise of +160.00% [1] - The company posted revenues of $131.72 million for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 1.95%, but down from $141.62 million in the same quarter last year [2] - Duluth Holdings shares have declined approximately 23.6% since the beginning of the year, while the S&P 500 has gained 9.6% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is -$0.34 on revenues of $118.4 million, and for the current fiscal year, it is -$0.58 on revenues of $579.5 million [7] - The Zacks Industry Rank for Textile - Apparel is currently in the top 37% of over 250 Zacks industries, indicating that the industry outlook can significantly impact stock performance [8] - Duluth Holdings has a Zacks Rank of 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]

Financial Performance - The company reported a net income of $1.3 million for the second quarter, a significant improvement from a net loss of $2.0 million in the same period last year [7] - Adjusted EBITDA increased by $1.5 million year-over-year to $12.0 million, representing 9.1% of net sales [7][10] - Net sales decreased by $9.9 million, or 7.0%, to $131.7 million compared to $141.6 million in the prior year [10] Operational Highlights - Gross margin improved to 54.7% of net sales, up from 52.3% in the previous year, driven by reduced promotional activity and better product costs [11] - Selling, general and administrative expenses decreased by $5.2 million, or 7.1%, to $68.8 million, with expenses as a percentage of net sales slightly decreasing to 52.2% [12] - Inventory levels were reduced by $20.7 million, or 12.2%, compared to the previous year [7][13] Management Insights - The President and CEO highlighted positive momentum in turnaround efforts, including promotional resets and expense management [5] - The company aims to simplify operations, reduce expenses, and mitigate tariff impacts as it approaches the peak selling season [8] - Future strategies include refocusing marketing and product assortment to align with consumer values [9] Balance Sheet and Liquidity - The company ended the quarter with $5.7 million in cash and cash equivalents and $73.3 million in net liquidity [7][13] - Outstanding debt on the revolving line of credit was $32.5 million [13] Market Trends - Direct-to-consumer net sales decreased by 13.7% to $79.1 million, attributed to lower traffic, although higher average order values provided some offset [10] - Retail store net sales increased by 5.3% to $52.6 million, primarily due to higher average order values [10]

Company Overview - Duluth Trading Company is a lifestyle brand offering men's and women's casual wear, workwear, and accessories, based in Mount Horeb, Wisconsin [2] - The company focuses on high-quality, solution-based products for individuals who lead a hands-on lifestyle and value a job well done [2] Financial Results Announcement - Duluth Trading will report its second quarter 2025 financial results before the market opens on September 4, 2025 [1] - A conference call and audio webcast for analysts and investors will take place on the same day at 9:30 AM Eastern Time to discuss the results and address questions [1] Investor Relations - Investors can access the live conference call at 1-844-875-6915 (domestic) or 1-412-317-6711 (international) [2] - A replay of the conference call will be available until September 10, 2025 [2] - Investors are encouraged to pre-register for the call to expedite entry [3]