Financial Performance - Net sales decreased by $14.0 million, or 12.0%, to $102.7 million in the first quarter of fiscal 2025 compared to $116.7 million in the same period of fiscal 2024[119]. - Gross profit decreased by $8.3 million, or 13.4%, to $53.4 million, with gross margin decreasing to 52.0% from 52.8% year-over-year[121]. - The net loss for the first quarter of fiscal 2025 was $15.3 million, compared to a net loss of $7.9 million in the prior year[111]. - Adjusted EBITDA decreased to ($3.8) million in the first quarter of fiscal 2025, down from $1.8 million in the same period of fiscal 2024[111]. - Net loss attributable to controlling interest was $15.3 million for the three months ended May 4, 2025, compared to a net loss of $7.9 million for the same period in 2024[125]. - Adjusted EBITDA decreased by $5.6 million to $(3.8) million in the three months ended May 4, 2025, compared to $1.8 million in the same period of 2024, representing a decrease to (3.7%) of net sales from 1.6%[127]. Sales Breakdown - Store market net sales decreased by $6.4 million, or 8.2%, to $71.6 million, while non-store market net sales decreased by $5.5 million, or 16.5%, to $28.0 million in the same period[120]. - The decrease in net sales was primarily driven by a decline in web traffic due to slower promotional activity[119]. Expenses and Cash Flow - Selling, general and administrative expenses decreased by $4.9 million, or 6.9%, to $65.7 million, but as a percentage of net sales, it increased to 64.0% from 60.5%[122]. - Net cash used in operating activities was $56.5 million for the three months ended May 4, 2025, compared to $33.7 million for the same period in 2024[134]. - Cash used in operating assets and liabilities was $50.3 million for the three months ended May 4, 2025, primarily due to a $28.2 million decrease in accounts payable and a $9.6 million increase in inventory[134]. - Income tax expense was $1.3 million for the three months ended May 4, 2025, compared to an income tax benefit of $2.1 million for the same period in 2024[124]. - Net cash used in investing activities was $1.3 million for the three months ended May 4, 2025, compared to $1.5 million for the same period in 2024[136]. Capital Expenditures and Financing - The company expects to spend approximately $17.0 million on capital expenditures in fiscal 2025, primarily for logistics optimization and information technology[129]. - Net cash provided by financing activities was $63.0 million for the three months ended May 4, 2025, compared to $9.8 million for the same period in 2024[137]. - The company believes that cash flow from operating activities and available cash under the credit facility will be sufficient to cover working capital requirements and anticipated capital expenditures for the foreseeable future[130]. Operational Overview - The company operated 62 retail stores and three outlet stores as of May 4, 2025, reflecting ongoing expansion efforts[103]. - The macroeconomic environment is experiencing inflation and recessionary concerns, impacting store traffic and consumer demand[108]. - The company continues to focus on direct-to-factory sourcing initiatives to improve product costs despite challenges in gross margin[121].

Financial Data and Key Metrics Changes - The company reported Q1 2025 net sales of $102.7 million, a decrease of 12% compared to the previous year [16] - Reported EPS loss was $0.45, while adjusted EPS loss was $0.32, with adjustments totaling $4.5 million [16] - Adjusted EBITDA for the quarter was negative $3.8 million [16] - Gross profit margin rate declined by 80 basis points year-over-year, but improved by over 300 basis points in March and April combined compared to last year [17][18] Business Line Data and Key Metrics Changes - Direct channel sales, excluding wholesale, fell by 14.6%, with web traffic declining but partially offset by higher average order value (AOV) [16] - Retail store sales declined by 2.6%, but profitability trends improved as promotions were reduced [17] - The company plans to reduce SKU count by at least 20% by spring 2026, focusing on core men's and women's workwear [9][23] Market Data and Key Metrics Changes - Mobile sales penetration increased by 200 basis points, with mobile conversion trending upwards [16] - Inventory levels increased by 29% year-over-year, with a current inventory mix of 91% core products and 9% clearance [19] Company Strategy and Development Direction - The company is focusing on three key areas: brand awareness, solution-based products, and customer service [6][9] - A significant expense savings initiative is expected to yield annualized savings of approximately $15 million, with at least $10 million realized in the current fiscal year [10] - The company is rationalizing its store portfolio, with nearly 25% of store leases up for renewal through 2026 [13][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment and emphasized the need to manage expenses prudently [25] - The company is maintaining its fiscal year 2025 financial guidance, with an adjusted EBITDA range of $20 million to $25 million [20] - Management is optimistic about the path forward, focusing on brand and product enablers to achieve profitable growth [14][42] Other Important Information - The company has transitioned its line of credit to an asset-based lending agreement, providing a $100 million limit with improved borrowing rates [20][25] - The company anticipates approximately $14 million in additional product costs due to tariffs, with minimal exposure to China [21][22] Q&A Session Summary Question: Can you elaborate on building brand awareness and marketing strategies? - Management is evaluating investments in the marketing funnel, particularly in upper funnel activities to drive brand awareness, with initial successes noted [30][31] Question: What are the consumer responses to the promotional reductions and potential price increases? - Management observed sequential improvement in gross margin rates and positive trends in conversion and full-price sales as promotions were refined [34][38]

Financial Data and Key Metrics Changes - The company reported Q1 2025 net sales of $102.7 million, a decline of 12% compared to the previous year [16] - Reported EPS loss was $0.45, while adjusted EPS loss was $0.32, with adjustments totaling $4.5 million [16] - Adjusted EBITDA for the quarter was negative $3.8 million [16] - Gross profit margin rate declined by 80 basis points year-over-year, but improved by over 300 basis points in March and April combined compared to last year [17][18] - Inventory increased by $39.7 million or 29% year-over-year, with a current inventory mix of 91% core products and 9% clearance [19] Business Line Data and Key Metrics Changes - Direct channel sales, excluding wholesale, fell by 14.6%, with web traffic declining but higher average order value (AOV) partially offsetting this [16][17] - Retail store sales declined by 2.6%, but profitability trends improved due to reduced promotions [17] Market Data and Key Metrics Changes - Mobile sales penetration increased by 200 basis points, with mobile conversion trending upwards [17] - The company is experiencing a shift in promotional strategy, reducing the number of promotional days by 35% and the depth of promotions from 25% to 20% on average [16] Company Strategy and Development Direction - The company is focusing on three key areas: brand awareness, solution-based products and product innovation, and customer service [6][14] - A significant reduction in SKU count by at least 20% is planned by spring 2026 to enhance efficiency in inventory purchases and marketing activities [9][24] - The company is implementing an expense savings initiative expected to yield annualized savings of approximately $15 million [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the need to restore financial health and is taking decisive actions to right-size the business [10][14] - The company is maintaining its fiscal year 2025 financial guidance, with adjusted EBITDA expected to range from $20 million to $25 million [20] - Management is aware of the uncertain macroeconomic environment and is focused on managing expenses and operational execution [26] Other Important Information - The company has transitioned its line of credit to an asset-based lending agreement, providing a $100 million limit with improved borrowing rates [20][26] - The company anticipates approximately $14 million in additional product costs due to tariffs, with minimal exposure to China [21][22] Q&A Session Summary Question: Can you elaborate on building brand awareness and marketing strategies? - Management is evaluating investments in the marketing funnel, particularly in upper funnel activities to drive brand awareness, with initial successes noted [31][33] Question: What are the consumer responses to the promotional reductions and potential price increases? - Management observed sequential improvement in gross margin rates and is balancing promotional activities while being cautious about pricing strategies to maintain customer retention [35][37]

Financial Performance - Net sales for the first quarter of fiscal 2025 were $102.7 million, a decrease of 12.0% compared to $116.7 million in the same period last year[6] - The company reported a net loss of $15.3 million, with an adjusted net loss of $10.8 million, compared to a net loss of $7.9 million in the prior year first quarter[6] - Adjusted EBITDA decreased by $5.6 million to ($3.8) million, representing (3.7%) of net sales[6] - Net sales for the three months ended May 4, 2025, were $102,704, a decrease of 12% compared to $116,684 for the same period in 2024[28] - Gross profit for the same period was $53,355, down 13% from $61,624 year-over-year[28] - The company reported a net loss of $15,264 for the three months ended May 4, 2025, compared to a net loss of $7,865 in the prior year[28] - Operating loss for the three months ended May 4, 2025, was $12,352, compared to an operating loss of $8,971 in the same period last year[28] - The company reported a net cash used in operating activities of $56,463 for the three months ended May 4, 2025, compared to $33,666 in the prior year[30] Sales Channels - Direct-to-consumer net sales decreased by 17.1% to $62.6 million, primarily due to lower site traffic[8] - Retail store net sales decreased by 2.6% to $40.2 million, attributed to slower store traffic[8] Profitability Metrics - Gross profit margin decreased by 80 basis points to 52.0%, with gross profit declining to $53.4 million from $61.6 million in the prior year[9] - Adjusted net loss attributable to controlling interest was $10,756, translating to an adjusted net loss per share of $0.32[35] Expenses and Liabilities - Selling, general and administrative expenses decreased by 6.9% to $65.7 million, representing 64.0% of net sales[10] - Total current assets increased to $211,124 as of May 4, 2025, from $191,631 a year earlier, reflecting a growth of 10%[25] - Total liabilities rose to $298,812, up 10% from $272,763 in the previous year[25] - The company experienced a significant increase in interest expense, which rose to $1,481 from $993 year-over-year[28] Cash Position - The company ended the quarter with $8.6 million in cash and cash equivalents and $44.6 million in total liquidity[11] - Cash and cash equivalents at the end of the period were $8,579, an increase from $6,799 at the end of the same period last year[30] Strategic Focus - The company is maintaining its previously issued fiscal 2025 financial guidance, with updates to be provided as macroeconomic conditions change[12] - Management is focused on business simplification and enhancing brand awareness, product innovation, and customer service to drive shareholder value[4]

Investor Presentation First Quarter 2025 June 5, 2025 Disclaimer Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts included in this press release, including statements concerning Duluth Trading's plans, objectives, goals, beliefs, business strategies, future events, business conditions, its results of operations, financial position and its bus ...

Core Insights - Duluth Trading Company reported a net loss of $15.3 million for the fiscal first quarter ended May 4, 2025, compared to a net loss of $7.9 million in the same period last year, indicating a significant decline in profitability [7][28] - The company is focusing on business simplification and enhancing brand awareness to drive shareholder value and return to profitable growth [8][5] Financial Performance - Net sales decreased by 12.0% to $102.7 million from $116.7 million in the prior year [9] - Direct-to-consumer net sales fell by 17.1% to $62.6 million, while retail store net sales decreased by 2.6% to $40.2 million [9] - Adjusted EBITDA decreased by $5.6 million to $(3.8) million, representing (3.7%) of net sales [7] - Gross profit margin decreased by 80 basis points to 52.0%, with gross profit declining to $53.4 million from $61.6 million [10] Cost Management - Selling, general and administrative expenses decreased by 6.9% to $65.7 million, but as a percentage of net sales, these expenses increased to 64.0% from 60.5% [11] - The company has initiated expense savings measures to right-size its business [7] Balance Sheet and Liquidity - The company ended the quarter with cash and cash equivalents of $8.6 million and net liquidity of $44.6 million [12] - Total current liabilities increased to $156.9 million from $128.6 million in the prior year [26] Management Strategy - The new CEO, Stephanie Pugliese, emphasized the need for decisive actions to simplify the business and focus on core strengths, including product innovation and customer service [8] - The company is committed to optimizing its product sourcing and fulfillment center network [8] Fiscal Outlook - Duluth Trading is maintaining its previously issued fiscal 2025 financial guidance, with updates to be provided as the macroeconomic environment changes [13]

Group 1 - Duluth Trading Company will report its first quarter 2025 financial results on June 5, 2025, before market opening [1] - A conference call and audio webcast for analysts and investors will take place on the same day at 9:30 am Eastern Time to discuss the results [1] - The company provides a unique customer experience through humor and storytelling in its marketing, emphasizing the quality of its casual wear and workwear [2] Group 2 - Duluth Trading is based in Mount Horeb, Wisconsin, and focuses on high-quality, solution-based apparel for a hands-on lifestyle [2] - The company operates through a content-rich website, catalogs, and distinctive retail locations, ensuring a strong customer service commitment with its "No Bull Guarantee" [2] - Investors can access the conference call replay until June 12, 2025, using specific domestic and international numbers [3]

Core Points - Duluth Trading Company announced the retirement of Francesca M. Edwardson from its Board of Directors [1][2] - Ms. Edwardson has been a board member since September 2015 and will continue until the 2025 Annual Meeting of Shareholders [2] - Stephen L. Schlecht, Chairman of Duluth Holdings, expressed gratitude for Ms. Edwardson's contributions and highlighted her expertise in corporate governance [3] Company Overview - Duluth Trading is a lifestyle brand offering high-quality workwear, casual wear, and outdoor apparel for men and women [4] - The company is based in Mount Horeb, Wisconsin, and focuses on providing a unique customer experience through humor and storytelling in its marketing [4] - Duluth Trading emphasizes outstanding customer service with its "No Bull Guarantee," ensuring customer satisfaction [4]

Financial Performance - Net sales in fiscal 2024 decreased by $20.1 million, or 3.1%, to $626.6 million compared to $646.7 million in fiscal 2023[166] - Net loss in fiscal 2024 was ($43.6) million compared to a net loss of ($9.9) million in the prior year[153] - Adjusted EBITDA in fiscal 2024 decreased by $18.0 million to $14.6 million, representing 2.3% of net sales compared to 5.1% in fiscal 2023[176] - Gross profit decreased by $16.5 million, or 5.1%, to $308.5 million, with a gross margin of 49.2% in fiscal 2024 compared to 50.3% in fiscal 2023[168] - Selling, general and administrative expenses increased by $3.1 million, or 0.9%, to $337.6 million, representing 53.9% of net sales in fiscal 2024[169] - The decrease in net sales was primarily driven by lower average unit retail prices and processing delays at a legacy fulfillment center[166] - For the fiscal year ended February 2, 2025, Duluth Holdings Inc. reported a net loss of $43.6 million, compared to a net loss of $9.9 million for the previous fiscal year[240] - The operating loss for the fiscal year ended February 2, 2025, was $(36,861,000), compared to an operating loss of $(9,569,000) in the prior year[345] Cash Flow and Working Capital - Free cash flow decreased by $14.8 million to ($25.2) million in fiscal 2024 compared to ($10.4) million in fiscal 2023, primarily due to higher inventory levels[178] - Net cash used in operating activities was ($16.9) million for fiscal 2024, compared to $38.7 million provided in fiscal 2023[186] - As of February 2, 2025, working capital was $63.1 million, including cash and cash equivalents of $3.3 million[179] - The company expects cash flow from operating activities and credit availability to cover working capital and capital expenditure needs for the foreseeable future[181] Inventory and Assets - Inventory increased by $40.8 million in fiscal 2024, while trade accounts payable increased by $22.9 million[186] - Total current assets increased to $191,631 thousand as of February 2, 2025, compared to $180,974 thousand at the end of the previous fiscal year[229] - Inventory levels rose to $166,545 thousand, up from $125,757 thousand, suggesting potential overstock issues[229] - The inventory reserve for excess, obsolete items and shrinkage increased to $2.1 million as of February 2, 2025, from $1.4 million in the previous year[264] Expenses and Liabilities - Interest expense increased by $0.4 million to $4.6 million in fiscal 2024 due to higher interest rates on outstanding debt[171] - Income tax expense was $2.4 million in fiscal 2024 compared to an income tax benefit of $2.9 million in fiscal 2023[172] - Total liabilities increased slightly to $272,763 thousand from $271,460 thousand, indicating stable leverage[229] - Total accrued expenses and other current liabilities increased to $35.684 million as of February 2, 2025, from $34.111 million as of January 28, 2024[315] Capital Expenditures and Investments - Capital expenditures for fiscal 2024 were $17.4 million, with an expected increase to approximately $20.0 million in fiscal 2025[180] - Net cash used in investing activities was $8.1 million in fiscal 2024, down from $48.7 million in fiscal 2023[189] - The company has a credit facility with a revolving commitment of $100.0 million following amendments made in January 2025[194] Shareholder Equity and Stock - The company’s total shareholders' equity decreased to $179,679 thousand from $219,750 thousand, indicating a decline in net worth[229] - The weighted average shares of common stock outstanding increased to 33,368 thousand from 32,955 thousand, reflecting potential dilution[231] - Total stock compensation expense associated with restricted stock was $4.0 million for fiscal 2024, a decrease of 4.76% from $4.2 million in fiscal 2023[283] Tax and Valuation - Total income tax expense for the fiscal year ended February 2, 2025, was $2,370,000, compared to a tax benefit of $(2,862,000) for the previous year[330] - The company recognized a valuation allowance of $11.8 million against deferred tax assets as of February 2, 2025, due to cumulative losses over the past 36 months[332] Operational Metrics - Direct-to-consumer revenue for the fiscal year ended February 2, 2025, was $419.860 million, down from $425.562 million in the previous year[325] - Store revenue for the fiscal year ended February 2, 2025, was $206.769 million, a decline from $221.119 million in the prior year[327] - The company incurred advertising and catalog expenses of $67.5 million for fiscal 2024, down from $69.0 million in fiscal 2023, reflecting a decrease of approximately 2.2%[255] - Shipping and processing expenses were $43.7 million for fiscal 2024, compared to $47.2 million in fiscal 2023, indicating a reduction of about 9.4%[258]

Group 1 - Duluth Holdings (DLTH) has experienced significant selling pressure, resulting in a 26.3% decline over the past four weeks, but it is now considered to be in oversold territory with expectations of better earnings ahead [1] - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold stocks, with a reading below 30 typically indicating oversold conditions [2] - The RSI reading for DLTH is currently at 29.58, suggesting that the heavy selling may be exhausting itself, indicating a potential bounce back towards equilibrium [5] Group 2 - There has been a strong consensus among sell-side analysts to raise earnings estimates for DLTH, with a 9.5% increase in the consensus EPS estimate over the last 30 days, which often correlates with price appreciation [6] - DLTH holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [7]