Sato said, “We front-loaded inventory receipts to de-risk supply chain challenges by taking early delivery of Q4 goods in Q3. Inventories in core year-round goods were down 4 percent compared to the Q3 of fiscal 2020. Inventories were up 24.0 percent year over year. Sato said demand for the Duluth Trading product “has remained strong” as evidenced by the 9 percent increase in units sold in the third quarter. Wall Street’s consensus estimate had called for a loss of 11 cents. The net loss came to $6.2 million, or 19 cents a share, against $2.8 million, or 9 cents, a year ago. The operating loss was $7.39 million in the quarter against an operating income of $4.9 million a year ago. SG&A expenses increased to 57.3 percent of sales compared to 54.2 percent a year ago. Gross margins eroded to 52.3 percent from 57.6 percent a year ago, driven by the increased promotional activity during the current period. Retail store sales decreased 6.6 percent to $56.1 million due to continued slower store traffic, which was partially offset by continued strong conversion rates. DTC sales were down 6 percent In the first half of the year. Wall Street’s consensus estimate had been $144.3 million.ĭTC sales climbed 6.8 percent to $91.0 million due to growth in website visits, coupled with increased promotional activity during the current quarter. In the third quarter ended October 30, sales increased 1.3 percent to $147.1 million, representing a sequential improvement of 770 basis points when compared to the first half of the year. In response to the inflationary environment, Duluth has strategically and selectively increased its mix of discounted offers and extended some sale event periods, resulting in gross margin pressures in the third quarter. EPS is now expected in the range of 5 cents to 20 cents versus 61 cents to 71 cents under prior guidance.Ĭapital expenditures are now expected to reach approximately $35 million, down from $40 million previously Adjusted EBITDA is now projected in the range of $42 million to $49 million, down from prior guidance between $69 million to $73 million. “The good news is we saw consistent and strong shopper conversion, a clear indication our brand, sub-brands and products are resonating.”ĭuluth’s updated guidance calls for sales in the range of $650 million to $680 million, down from previous guidance in the range of $680 million to $705 million. “We’re seeing the impacts of the inflationary environment on our core consumer with a higher level of price sensitivity, resulting in a reduction in the overall basket size and lower levels of full-price selling in both our direct and retail channels.,” said Sam Sato, president and CEO, on a call with analysts. However, more value-conscious customers have led to a recent deceleration in sales, prompting the company to reduce its outlook for the year. Duluth Holdings, Inc., the parent of Duluth Trading, returned to growth in the third quarter on an encouraging response to its updated brand positioning.
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