Financial Data and Key Metrics Changes - Net sales for Q3 Fiscal 2025 were $101.9 million, down from $107.5 million in Q3 of the previous year, primarily due to a 7.4% decrease in comparable sales, partially offset by new store sales [21][22] - Gross margin rate was 42.7%, compared to 45.1% in Q3 of last year, with occupancy costs contributing to a 210 basis points decline [22] - EBITDA for the quarter was a loss of $2 million, compared to earnings of $1 million in Q3 of the previous year [23] Business Line Data and Key Metrics Changes - The shift towards value-driven private brands was noted, as these brands sell at lower average unit retails but generate higher margins [21] - The add-to-sales ratio for Q3 increased slightly to 6% from 5.7% last year, indicating strong returns from paid search and social channels [23] Market Data and Key Metrics Changes - Comparable sales were negative 6.7% in August, negative 9.3% in September, and negative 5.8% in October, with October being the best month year-to-date [21] Company Strategy and Development Direction - The merger with FullBeauty aims to create a scaled, category-defining retailer for inclusive apparel, addressing the fragmented market for plus-size and Big and Tall customers [4][10] - The combined company expects to generate $25 million in annual run rate cost synergies by 2027, enhancing financial strength and operational efficiency [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the merger's potential to create long-term value for shareholders and improve customer experience through a broader range of products and services [4][9] - The focus will be on leveraging combined strengths to drive innovation and meet evolving customer needs [8][12] Other Important Information - The merger is structured as a 100% stock-for-stock transaction, with DXL shareholders owning 45% and FullBeauty shareholders owning 55% of the combined company [17] - The transaction is expected to close in the first half of fiscal 2026, subject to customary closing conditions [19] Q&A Session Summary Question: Can you provide clarity on the expected capital structure post-closing? - The total debt expected upon closing is $172 million, with more information to be provided in the proxy statement [29][30] Question: What are the expectations for ongoing CapEx for the combined entity? - The focus will be on commercial synergies and maintaining infrastructure, with specific plans to be developed as the teams integrate [35][36] Question: What trends has FullBeauty seen in sales over the past year? - FullBeauty has experienced similar comp trends to DXL, focusing on cost structure and marketing efficiency to maintain EBITDA flow-through [55][56] Question: How will the two organizations create synergy in marketing and pricing? - The companies will explore cross-selling opportunities and leverage their respective strengths in private and national brands to enhance customer engagement [42][46]