Duluth (US:DLTH)2025-12-17 16:21Financial Performance - Net sales decreased by 9.6% year-over-year in the third quarter to $114.9 million, and decreased by 9.4% in the first nine months to $349.3 million[114]. - Net loss for the third quarter of fiscal 2025 was $10.1 million, an improvement from a net loss of $28.2 million in the prior year; net loss for the first nine months was $24.0 million compared to $38.1 million in the same period last year[114]. - Adjusted EBITDA improved to ($0.7) million in the third quarter of fiscal 2025 from ($6.2) million in the prior year, and increased to $7.5 million in the first nine months compared to $6.1 million in the same period last year[114]. - Net sales decreased by $12.2 million, or 9.6%, to $114.9 million for the three months ended November 2, 2025, compared to $127.1 million for the same period in 2024[123]. - Gross profit decreased by $4.6 million, or 6.9%, to $61.8 million for the three months ended November 2, 2025, with a gross margin of 53.8%, up from 52.3% in the prior year[124]. - For the nine months ended November 2, 2025, net sales decreased by $36.1 million, or 9.4%, to $349.3 million compared to $385.4 million in the prior year[129]. - Gross profit for the nine months ended November 2, 2025, decreased by $14.8 million, or 7.3%, to $187.2 million, with a gross margin of 53.6%, up from 52.4%[130]. Expenses and Costs - Selling, general and administrative expenses decreased by $11.6 million, or 14.1%, to $70.1 million for the three months ended November 2, 2025, representing 61.5% of net sales, down from 64.8%[125]. - Selling, general and administrative expenses for the nine months ended November 2, 2025, decreased by $21.7 million, or 9.6%, to $205.1 million, representing 58.7% of net sales[131]. - Selling, general and administrative expenses are expected to be higher in lower-volume quarters due to fixed costs, affecting overall profitability[117]. Operational Insights - The company operated 63 retail stores and three outlet stores as of November 2, 2025, expanding its omnichannel platform since 2010[108]. - The company emphasizes the importance of Adjusted EBITDA as a key performance metric, excluding financing and investing activities to provide a clearer operational picture[118]. - Gross profit is calculated as net sales minus cost of goods sold, with expectations for growth aligned with net sales increases[116]. - The company has built strong brand awareness and a loyal customer base through a focus on quality and functional products[110]. Economic and Market Conditions - The macroeconomic environment is characterized by inflation and tariff concerns, which may impact merchandise costs and availability[112]. - Future performance is subject to various risks, including economic uncertainties and supply chain disruptions, which could materially affect results[105]. Cash Flow and Investments - Net cash used in operating activities was $31.1 million for the nine months ended November 2, 2025, compared to $58.1 million in the prior year[142]. - The company expects to spend approximately $17.0 million on capital expenditures in fiscal 2025, primarily for new stores and IT investments[139]. - For the nine months ended November 2, 2025, net cash used in investing activities was $5.7 million[147]. - Net cash provided by financing activities for the nine months ended November 2, 2025, was $41.6 million, an increase from $41.0 million for the same period in 2024[148]. Compliance and Reporting - There have been no significant changes to contractual obligations as described in the Annual Report on Form 10-K for the fiscal year ended February 2, 2025[149]. - The company is not a party to any material off-balance sheet arrangements[150]. - There have been no significant changes to critical accounting policies and estimates as described in the 2024 Form 10-K[152]. - There have been no significant changes in market risks as described in the 2024 Form 10-K[154].