Destination XL (DXLG)2025-05-29 16:07Financial Performance - Total sales for the first quarter of fiscal 2025 were $105.5 million, down from $115.5 million in the first quarter of fiscal 2024, reflecting a decrease in comparable sales of 9.4%[96] - The net loss for the first quarter was $(1.9) million, or $(0.04) per diluted share, primarily driven by the sales shortfall[96] - The company recorded a net loss of $1.9 million, or $(0.04) per diluted share, in Q1 fiscal 2025, compared to net income of $3.8 million, or $0.06 per diluted share, in Q1 fiscal 2024[115] - Cash flow from operations was $(12.0) million in Q1 fiscal 2025, a decrease from $(1.1) million in Q1 fiscal 2024, primarily due to decreased earnings and timing of payables[120] - Free cash flow was $(18.8) million in Q1 fiscal 2025, compared to $(7.0) million in Q1 fiscal 2024, reflecting increased capital expenditures[121] Sales and Comparable Sales - Comparable sales showed a gradual improvement over the quarter, with February down 13.9%, March down 8.2%, and April down 7.2%[97] - The direct business segment saw a comparable sales decrease of 16.2%, while store sales decreased by 6.6% in the first quarter of fiscal 2025[102] Margins and Expenses - The gross margin rate for the first quarter of fiscal 2025 was 45.1%, a decrease of 310 basis points from 48.2% in the first quarter of fiscal 2024[103] - Selling, general and administrative (SG&A) expenses as a percentage of sales increased to 45.0% in the first quarter of fiscal 2025, compared to 41.1% in the first quarter of fiscal 2024[107] - Customer Facing Costs represented 25.2% of sales in Q1 fiscal 2025, up from 23.0% in Q1 fiscal 2024; Corporate Support Costs increased to 19.8% from 18.1%[110] Cash and Investments - Cash and investments as of May 3, 2025, were $29.1 million, down from $53.2 million at May 4, 2024, with no debt outstanding[100] Tax and Interest - The effective tax rate increased to 39.7% in Q1 fiscal 2025 from 30.4% in Q1 fiscal 2024, primarily due to permanent book-to-tax differences[114] - Net interest income decreased to $0.3 million in Q1 fiscal 2025 from $0.6 million in Q1 fiscal 2024 due to a lower average balance of investments[112] Inventory and Depreciation - Inventory decreased by approximately $5.8 million to $85.5 million as of May 3, 2025, with clearance inventory at 9.5% of total inventory, down from 9.7%[116] - Depreciation and amortization rose to $3.6 million in Q1 fiscal 2025 from $3.3 million in Q1 fiscal 2024, driven by increased capital expenditures for new store openings and technology projects[111] Future Plans and Technology - The company plans to open six additional DXL stores during fiscal 2025, with capital expenditures expected to range from $19.0 million to $21.0 million[125] - FiTMAP Sizing Technology is currently in 52 DXL retail locations, with plans to expand to 85 stores by the end of fiscal 2025 and up to 200 stores by the end of fiscal 2027[126] - The company has an exclusive license for the FiTMAP Sizing Technology until 2030, aimed at enhancing customer engagement and personalization[97] Marketing Costs - Marketing costs were 6.1% of sales for the first quarter of fiscal 2025, slightly down from 6.3% in the first quarter of fiscal 2024, with expectations of approximately 5.9% for fiscal 2025[109] Tariffs Impact - The company expects the impact of current tariffs on financial results for fiscal 2025 could be an increase in costs of less than $2.0 million, or approximately 40 basis points as a percentage of sales[106]