Duluth (DLTH)

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Duluth (DLTH) - 2023 Q4 - Earnings Call Transcript
2024-03-07 18:07
Financial Data and Key Metrics Changes - For the full year 2023, net sales were $646.7 million, down 1% year-over-year, while Q4 net sales grew 1.6% to $245.6 million, driven by women's and AKHG brands [16][21] - Full year adjusted EBITDA was $33.4 million, with Q4 adjusted EBITDA at $21.1 million, an increase of 2.4% over last year [21][23] - Full year gross margin contracted 230 basis points to 50.3%, with Q4 gross margin at 48.2%, down 300 basis points [22] Business Line Data and Key Metrics Changes - The women's business registered year-over-year growth of 12%, with AKHG women's business growing over 20% [3][16] - Men's apparel business was flat year-over-year, with growth in AKHG and core categories offset by declines in cold weather categories due to warmer weather [16][57] - New product innovations in women's categories, such as flannels and bras, contributed to strong double-digit growth [55][56] Market Data and Key Metrics Changes - Retail channel sales declined 12%, while direct channel sales grew 9%, with mobile sales increasing over 20% and becoming the largest channel for consumer interaction [39][6] - The company experienced a significant portion of holiday sales during the Thanksgiving to mid-Cyber Week period, achieving the strongest Black Friday sales in its history [59][72] Company Strategy and Development Direction - The company aims to accelerate operational improvements by expanding its pipeline of innovative products, optimizing marketing, and improving gross margins through sourcing initiatives [7][78] - The strategic focus includes targeting a younger consumer demographic, with new consumers averaging 5 years younger than existing ones [14][15] - The "Big Dam Blueprint" outlines five pillars for growth, including a digital mindset and optimizing DTC channels [33][34] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2024, expecting low to mid-single-digit declines in the first half due to a dynamic macro environment, but anticipating gross margin improvements of 200 basis points for the full year [17][43] - The company is focused on managing expenses and inventories prudently while navigating ongoing consumer headwinds [45][78] Other Important Information - The company ended the year with $32.2 million in cash and no outstanding debt, with inventory down 19% [41] - Capital expenditures for 2023 were $53.2 million, primarily for strategic infrastructure initiatives [41] Q&A Session Summary Question: What are the expectations for gross margin improvement? - Management expects a 200 basis point improvement in gross margin for 2024, primarily driven by sourcing initiatives, while being prudent about promotions and consumer behavior [28][46] Question: Can you elaborate on the promotional strategy and its impact on margins? - Management acknowledged ongoing consumer headwinds and a heavily promotional environment but emphasized that strategic initiatives in product development and sourcing are expected to drive more full-price sales [45][72] Question: What is the focus for product development and pricing strategy? - The focus is on creating more new products frequently to drive full-price sell-throughs, which will contribute to bottom-line profits [76][77]
Duluth Holdings Inc. Announces Fourth Quarter and Fiscal 2023 Financial Results
Newsfilter· 2024-03-07 10:45
Fourth quarter Net Sales increased 1.6% year-over-year to $245.6 million; diluted EPS of $0.21 Women's business grew double digits in the fourth quarter across both Duluth and AKHG brands Strong financial position with $232.2 million of liquidity MOUNT HOREB, Wis., March 07, 2024 (GLOBE NEWSWIRE) -- Duluth Holdings Inc. (dba, Duluth Trading Company) ("Duluth Trading" or the "Company") (NASDAQ:DLTH), a lifestyle brand of men's and women's workwear, casual wear, outdoor apparel and accessories, today announce ...
Duluth (DLTH) - 2024 Q4 - Annual Results
2024-03-06 16:00
Exhibit 99.1 Duluth Holdings Inc. Announces Fourth Quarter and Fiscal 2023 Financial Results Fourth quarter Net Sales increased 1.6% year-over-year to $245.6 million; diluted EPS of $0.21 Women's business grew double digits in the fourth quarter across both Duluth and AKHG brands Strong financial position with $232.2 million of liquidity MOUNT HOREB, WI - March 7, 2024 – Duluth Holdings Inc. (dba, Duluth Trading Company) ("Duluth Trading" or the "Company") (NASDAQ: DLTH), a lifestyle brand of men's and wome ...
Duluth Holdings Inc. to Report Fourth Quarter and Fiscal Year 2023 Financial Results on March 7
Globenewswire· 2024-02-22 10:45
MOUNT HOREB, Wis., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Duluth Holdings Inc. (dba, Duluth Trading Company) (“Duluth Trading”) (NASDAQ: DLTH), a lifestyle brand of men’s and women’s casual wear, workwear and accessories, today announced that it will report fourth quarter 2023 financial results before market on Thursday, March 7, 2024. A conference call and audio webcast with analysts and investors will be held on Thursday, March 7, 2024 at 9:30 am Eastern Time, to discuss the results and answer questions. Live ...
Duluth Holdings Inc. to Report Fourth Quarter and Fiscal Year 2023 Financial Results on March 7
Newsfilter· 2024-02-22 10:45
MOUNT HOREB, Wis., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Duluth Holdings Inc. (dba, Duluth Trading Company) (“Duluth Trading”) (NASDAQ: DLTH), a lifestyle brand of men’s and women’s casual wear, workwear and accessories, today announced that it will report fourth quarter 2023 financial results before market on Thursday, March 7, 2024. A conference call and audio webcast with analysts and investors will be held on Thursday, March 7, 2024 at 9:30 am Eastern Time, to discuss the results and answer questions. Live ...
Duluth Holdings Inc. Announces Inducement Grant Under NASDAQ Listing Rule 5635(c)(4)
Newsfilter· 2024-02-12 23:12
MOUNT HOREB, Wis., Feb. 12, 2024 (GLOBE NEWSWIRE) -- Duluth Holdings Inc. (dba, Duluth Trading Company) ("Duluth Trading" or the "Company") (NASDAQ:DLTH), a lifestyle brand of men's and women's workwear, casual wear, outdoor apparel and accessories, today announced that it made an inducement grant to Ms. Heena Agrawal in connection with her employment as the Company's new Senior Vice President and Chief Financial Officer, effective February 12, 2024. The Company granted 94,000 shares of restricted stock wit ...
Duluth (DLTH) - 2023 Q3 - Earnings Call Transcript
2023-11-30 18:44
Duluth Holdings Inc. (NASDAQ:DLTH) Q3 2023 Results Conference Call November 30, 2023 9:30 AM ET Company Participants Nitza McKee - IR Sam Sato - President, CEO and Director Mike Murphy - VP, Chief Accounting Officer & Interim CFO Conference Call Participants Janine Stichter - BTIG Jonathan Komp - Baird Dylan Carden - William Blair Operator Good morning, and welcome to the Duluth Holdings Inc Third Quarter 2023 Earnings Conference Call. All participants are in a listen only mode. [Operator Instructions] Afte ...
Duluth (DLTH) - 2024 Q3 - Quarterly Report
2023-11-30 16:00
Part I—Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended October 29, 2023, show a decrease in net sales and an increase in net loss compared to the prior year, with key balance sheet changes including a significant drop in cash, an increase in inventory, and the utilization of the line of credit [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of October 29, 2023, total assets were $526.0 million, a slight decrease from $527.5 million at January 29, 2023, with key changes including a decrease in cash and cash equivalents from $45.5 million to $8.2 million, and an increase in inventory from $154.9 million to $174.0 million, alongside a $36.0 million draw on the Duluth line of credit | (Amounts in millions) | October 29, 2023 | January 29, 2023 | | :--- | :--- | :--- | | **Total current assets** | $203.5 | $221.7 | | **Total assets** | **$526.0** | **$527.5** | | **Total current liabilities** | $141.2 | $118.3 | | **Total liabilities** | $312.1 | $300.3 | | **Total shareholders' equity** | $213.9 | $227.2 | | **Total liabilities and shareholders' equity** | **$526.0** | **$527.5** | - Cash and cash equivalents decreased significantly to **$8.2 million** from **$45.5 million** at the beginning of the fiscal year[9](index=9&type=chunk) - Inventory increased to **$174.0 million** from **$154.9 million**, while a **$36.0 million** balance appeared on the Duluth line of credit[9](index=9&type=chunk)[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the third quarter ended October 29, 2023, net sales decreased to $138.2 million from $147.1 million year-over-year, resulting in a net loss of $10.5 million, compared to a $6.2 million loss in the same period last year, with the nine-month period showing net sales falling to $401.1 million from $411.5 million and the net loss widening to $16.4 million from $5.2 million year-over-year | (Amounts in millions) | Three Months Ended Oct 29, 2023 | Three Months Ended Oct 30, 2022 | Nine Months Ended Oct 29, 2023 | Nine Months Ended Oct 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $138.2 | $147.1 | $401.1 | $411.5 | | **Gross profit** | $69.4 | $76.9 | $206.5 | $219.6 | | **Operating loss** | $(12.4) | $(7.4) | $(18.4) | $(4.5) | | **Net loss attributable to controlling interest** | $(10.5) | $(6.2) | $(16.3) | $(5.1) | | **Net loss per share (Basic & Diluted)** | $(0.32) | $(0.19) | $(0.50) | $(0.16) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended October 29, 2023, net cash used in operating activities was $31.0 million, a significant outflow driven by a net loss of $16.4 million and a $19.0 million increase in inventory, while net cash used in investing activities was $39.8 million, primarily for property and equipment purchases, and net cash provided by financing activities was $33.5 million, largely from proceeds from the line of credit, resulting in a decrease in cash and cash equivalents of $37.4 million | (Amounts in millions) | Nine Months Ended Oct 29, 2023 | Nine Months Ended Oct 30, 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(31.0) | $(51.0) | | **Net cash used in investing activities** | $(39.8) | $(24.1) | | **Net cash provided by financing activities** | $33.5 | $7.5 | | **Decrease in cash and cash equivalents** | $(37.4) | $(67.6) | | **Cash and cash equivalents at end of period** | $8.2 | $9.4 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, business operations, and financial arrangements, including the disaggregation of revenue by channel showing declines in both direct-to-consumer and store sales, and outlining its debt structure, including a $200 million revolving credit facility with $36 million drawn as of the reporting date - The company operates as a single reportable segment with an omnichannel business approach, selling men's and women's casual wear, workwear, and accessories[29](index=29&type=chunk)[30](index=30&type=chunk) | (Amounts in millions) | Three Months Ended Oct 29, 2023 | Three Months Ended Oct 30, 2022 | | :--- | :--- | :--- | | Direct-to-consumer | $87.0 | $91.0 | | Stores | $51.2 | $56.1 | | **Total** | **$138.2** | **$147.1** | - The company's credit agreement provides for borrowings up to **$200.0 million**; as of October 29, 2023, the company had **$36.0 million** outstanding on its line of credit and was in compliance with all covenants[55](index=55&type=chunk)[56](index=56&type=chunk)[51](index=51&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 6.1% decrease in Q3 net sales to declines in store traffic, partially offset by improved online conversion rates, with gross margin contracting from 52.3% to 50.2% due to a lower mix of full-price sales, and SG&A expenses decreasing slightly due to lower advertising spend, resulting in a net loss of $10.5 million for the quarter and an Adjusted EBITDA of negative $1.6 million, while liquidity relies on cash from operations and its credit facility, with approximately $55.0 million in capital expenditures planned for fiscal 2023 [Results of Operations](index=23&type=section&id=Results%20of%20Operations) For the third quarter of fiscal 2023, net sales fell 6.1% to $138.2 million, driven by lower store traffic, with gross margin declining by 210 basis points to 50.2% due to increased promotional activity, and SG&A expenses decreasing by 2.9% to $81.8 million, leading to a net loss of $10.5 million for the quarter and $16.3 million for the nine months - Q3 net sales decreased by **$8.9 million** (6.1%) to **$138.2 million**, primarily due to declines in store traffic[112](index=112&type=chunk) - Q3 gross margin decreased to **50.2%** from **52.3%** in the prior year, driven by a lower mix of full-price sales compared to promotional sales[114](index=114&type=chunk) - Q3 SG&A expenses decreased by **$2.5 million** (2.9%) due to reduced advertising spending and fulfillment efficiencies, partially offset by higher personnel costs and depreciation[115](index=115&type=chunk)[116](index=116&type=chunk) [Reconciliation of Net Loss to Adjusted EBITDA](index=25&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) Adjusted EBITDA, a non-GAAP measure, decreased to a loss of $1.6 million in the third quarter of 2023 from a positive $1.7 million in the same period of 2022, and for the nine-month period, Adjusted EBITDA fell to $12.3 million from $22.9 million year-over-year, reflecting lower sales and gross profit | (Amounts in millions) | Three Months Ended Oct 29, 2023 | Three Months Ended Oct 30, 2022 | Nine Months Ended Oct 29, 2023 | Nine Months Ended Oct 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net loss** | $(10.5) | $(6.2) | $(16.4) | $(5.2) | | **EBITDA** | $(2.6) | $1.0 | $9.0 | $20.9 | | **Adjusted EBITDA** | **$(1.6)** | **$1.7** | **$12.3** | **$22.9** | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash from operations and its credit facility, with working capital at $62.3 million as of October 29, 2023, including $8.2 million in cash, and net cash used in operating activities for the first nine months of fiscal 2023 totaling $31.0 million, while capital expenditures for fiscal 2023 are expected to be approximately $55.0 million, focused on logistics and IT investments - The company's primary sources of liquidity are cash from operating activities and its credit facility[130](index=130&type=chunk) - Capital expenditures for fiscal 2023 are expected to be approximately **$55.0 million**, primarily for investments in logistics optimization and information technology[131](index=131&type=chunk) - For the nine months ended October 29, 2023, net cash used in operating activities was **$31.0 million**, while net cash provided by financing activities was **$33.5 million**, mainly from **$36.0 million** in net borrowings under the revolving line of credit[134](index=134&type=chunk)[136](index=136&type=chunk)[140](index=140&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no significant changes in the market risks described in its Annual Report on Form 10-K for the fiscal year ended January 29, 2023, with the primary market risk relating to interest rate fluctuations on borrowings under its credit agreement - There have been no significant changes in the market risks from those disclosed in the company's 2022 Form 10-K[147](index=147&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of the end of the quarter, the Chief Executive Officer and Interim Chief Financial Officer concluded that the company's disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - Management, including the CEO and Interim CFO, concluded that as of October 29, 2023, the company's disclosure controls and procedures were effective[148](index=148&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[149](index=149&type=chunk) Part II—Other Information [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently party to any legal proceedings that it believes would have a material adverse effect on its business, financial condition, or results of operations - The company is not presently a party to any legal proceedings expected to have a material adverse effect on its business[150](index=150&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as previously disclosed in its Annual Report on Form 10-K for the fiscal year 2022 - No material changes to the company's risk factors have occurred since the filing of its fiscal 2022 Annual Report on Form 10-K[151](index=151&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell any unregistered equity securities during the quarter, but did acquire 1,702 shares from employees at an average price of $6.10 per share to satisfy minimum tax withholding requirements upon the vesting of restricted stock - During the three months ended October 29, 2023, the company acquired a total of **1,702 shares** from employees to satisfy tax withholding obligations related to vested restricted stock[152](index=152&type=chunk)[153](index=153&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes certifications from the CEO and Interim CFO as required by the Sarbanes-Oxley Act, as well as XBRL financial data[155](index=155&type=chunk)
Duluth (DLTH) - 2023 Q2 - Earnings Call Transcript
2023-08-31 18:37
Duluth Holdings Inc. (NASDAQ:DLTH) Q2 2023 Results Conference Call August 31, 2023 9:30 AM ET Company Participants Nitza McKee - IR Sam Sato - President and CEO Dave Loretta - SVP and CFO Conference Call Participants Janine Stichter - BTIG Jonathan Komp - Baird Jim Duffy - Stifel Dylan Carden - William Blair Operator Good morning, and welcome to the Duluth Holdings Second Quarter 2023 Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference ...
Duluth (DLTH) - 2024 Q2 - Quarterly Report
2023-08-31 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________ 201 East Front Street Mount Horeb, Wisconsin 53572 (Address of principal executive offices) (Zip Code) FORM 10-Q _________________________________________ þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transi ...