Duluth Holdings Inc. Announces Second Quarter 2024 Financial Results

Core Viewpoint - Duluth Holdings Inc. reported a year-over-year net sales growth of 1.8% to $141.6 million for the second quarter of fiscal 2024, while also expanding its gross margin and maintaining a strong financial position with no debt and approximately $210 million in liquidity [1][2][13]. Financial Performance - Net sales increased by 1.8% to $141.6 million compared to $139.1 million in the same period last year [6]. - The company reported a net loss of $3.7 million, with an adjusted net loss of $0.6 million, which excludes $1.6 million in restructuring expenses and a $2.4 million non-recurring sales tax expense accrual [2][10]. - Adjusted EBITDA rose by $2.0 million to $10.6 million, representing 7.5% of net sales [2][29]. - Earnings per diluted share were reported at ($0.11), with an adjusted EPS of ($0.02) [2][32]. Operational Highlights - The company experienced a 5.6% increase in direct-to-consumer net sales, totaling $91.7 million, driven by higher site conversion rates, while retail store net sales decreased by 4.4% to $49.9 million due to slower store traffic [6][8]. - Gross profit increased to $74.0 million, or 52.3% of net sales, up 90 basis points from the previous year, attributed to sourcing initiatives [7]. - Selling, general and administrative expenses rose by 4.6% to $76.3 million, including a $2.4 million non-recurring sales tax expense [8]. Strategic Initiatives - The company is in phase two of its fulfillment center network plan, which aims to maximize productivity and capacity, with a successful automated fulfillment center in Adairsville, Georgia, processing 58% of total company volume [5][12]. - Duluth Trading has expanded its product offerings, including new lines such as Duluth Reserve and Bullpen 3D, and successfully hosted a trade-up event that increased customer engagement and sales [4][3]. Financial Outlook - The company reaffirmed its fiscal 2024 outlook, projecting net sales of approximately $640 million, an adjusted EPS of approximately ($0.22), and adjusted EBITDA of around $39 million [14].