Duluth (DLTH) - 2025 Q4 - Annual Report

Financial Performance - Net sales in fiscal 2024 decreased by $20.1 million, or 3.1$626.6 million compared to $646.7 million in fiscal 2023[166] - Net loss in fiscal 2024 was ($43.6) million compared to a net loss of ($9.9) million in the prior year[153] - Adjusted EBITDA in fiscal 2024 decreased by$18.0 million to $14.6 million, representing 2.3$16.5 million, or 5.1%, to $308.5 million, with a gross margin of 49.2$3.1 million, or 0.9%, to $337.6 million, representing 53.9$43.6 million, compared to a net loss of $9.9 million for the previous fiscal year[240] - The operating loss for the fiscal year ended February 2, 2025, was$(36,861,000), compared to an operating loss of $(9,569,000) in the prior year[345] Cash Flow and Working Capital - Free cash flow decreased by$14.8 million to ($25.2) million in fiscal 2024 compared to ($10.4) million in fiscal 2023, primarily due to higher inventory levels[178] - Net cash used in operating activities was ($16.9) million for fiscal 2024, compared to$38.7 million provided in fiscal 2023[186] - As of February 2, 2025, working capital was $63.1 million, including cash and cash equivalents of$3.3 million[179] - The company expects cash flow from operating activities and credit availability to cover working capital and capital expenditure needs for the foreseeable future[181] Inventory and Assets - Inventory increased by $40.8 million in fiscal 2024, while trade accounts payable increased by$22.9 million[186] - Total current assets increased to $191,631 thousand as of February 2, 2025, compared to$180,974 thousand at the end of the previous fiscal year[229] - Inventory levels rose to $166,545 thousand, up from$125,757 thousand, suggesting potential overstock issues[229] - The inventory reserve for excess, obsolete items and shrinkage increased to $2.1 million as of February 2, 2025, from$1.4 million in the previous year[264] Expenses and Liabilities - Interest expense increased by $0.4 million to$4.6 million in fiscal 2024 due to higher interest rates on outstanding debt[171] - Income tax expense was $2.4 million in fiscal 2024 compared to an income tax benefit of$2.9 million in fiscal 2023[172] - Total liabilities increased slightly to $272,763 thousand from$271,460 thousand, indicating stable leverage[229] - Total accrued expenses and other current liabilities increased to $35.684 million as of February 2, 2025, from$34.111 million as of January 28, 2024[315] Capital Expenditures and Investments - Capital expenditures for fiscal 2024 were $17.4 million, with an expected increase to approximately$20.0 million in fiscal 2025[180] - Net cash used in investing activities was $8.1 million in fiscal 2024, down from$48.7 million in fiscal 2023[189] - The company has a credit facility with a revolving commitment of $100.0 million following amendments made in January 2025[194] Shareholder Equity and Stock - The company’s total shareholders' equity decreased to$179,679 thousand from $219,750 thousand, indicating a decline in net worth[229] - The weighted average shares of common stock outstanding increased to 33,368 thousand from 32,955 thousand, reflecting potential dilution[231] - Total stock compensation expense associated with restricted stock was$4.0 million for fiscal 2024, a decrease of 4.76% from $4.2 million in fiscal 2023[283] Tax and Valuation - Total income tax expense for the fiscal year ended February 2, 2025, was$2,370,000, compared to a tax benefit of $(2,862,000) for the previous year[330] - The company recognized a valuation allowance of$11.8 million against deferred tax assets as of February 2, 2025, due to cumulative losses over the past 36 months[332] Operational Metrics - Direct-to-consumer revenue for the fiscal year ended February 2, 2025, was $419.860 million, down from$425.562 million in the previous year[325] - Store revenue for the fiscal year ended February 2, 2025, was $206.769 million, a decline from$221.119 million in the prior year[327] - The company incurred advertising and catalog expenses of $67.5 million for fiscal 2024, down from$69.0 million in fiscal 2023, reflecting a decrease of approximately 2.2%[255] - Shipping and processing expenses were $43.7 million for fiscal 2024, compared to$47.2 million in fiscal 2023, indicating a reduction of about 9.4%[258]