Duluth (DLTH)2024-12-05 13:01Financial Performance - Net sales for the third quarter decreased by 8.1% to $127.1 million, down from $138.2 million in the same period last year[5] - The company reported a net loss of $28.5 million, with an adjusted net loss of $13.8 million, compared to a net loss of $10.5 million in the prior year[3] - Direct-to-consumer net sales decreased by 8.3% to $79.8 million, primarily due to lower site conversion rates[5] - Net sales for the three months ended October 27, 2024, were $127,056, a decrease of 8.3% compared to $138,210 for the same period in 2023[24] - The company reported a net loss of $28,524 for the three months ended October 27, 2024, compared to a net loss of $10,474 for the same period in 2023, representing a significant increase in losses[24] - Net loss for the three months ended October 27, 2024, was $(28,524) thousand, compared to $(10,474) thousand for the same period in 2023, representing a 172% increase in losses[28] - Adjusted net loss attributable to controlling interest for the three months ended October 27, 2024, was $(13,751) thousand, translating to an adjusted EPS of $(0.41)[30] Profitability Metrics - Gross profit margin increased by 210 basis points to 52.3%, driven by successful sourcing initiatives[6] - Gross profit for the nine months ended October 27, 2024, was $202,031, down from $206,538 in the prior year, reflecting a decrease of 2.4%[24] - Adjusted EBITDA for the nine months ended October 27, 2024, was $5,662 thousand, down from $12,270 thousand in the same period of 2023, indicating a decline of 53.8%[28] - EBITDA for the three months ended October 27, 2024, was $(13,907) thousand, a significant decrease from $(2,588) thousand in the prior year[28] Expenses and Liabilities - Selling, general and administrative expenses rose by 1.2% to $82.9 million, resulting in a deleveraged SG&A as a percentage of net sales to 65.2%[7] - The company incurred restructuring expenses of $6,152 during the three months ended October 27, 2024, which were not present in the same period last year[24] - Restructuring expenses related to lease amendments totaled $7.7 million, with projected annual savings of approximately $5.0 million[10] - Total liabilities rose to $347,994 as of October 27, 2024, compared to $312,139 a year prior, indicating an increase of 11.5%[21] Cash Flow and Liquidity - The company ended the quarter with approximately $165 million in liquidity and $9.3 million in cash and cash equivalents[11] - Cash and cash equivalents decreased to $9,335 at the end of the period from $32,157 at the beginning, reflecting a decline of 71%[26] - The company reported a net cash used in operating activities of $58,125 for the nine months ended October 27, 2024, compared to $31,006 for the same period in 2023, indicating a worsening cash flow situation[26] - Net borrowings on the line of credit amounted to $44,000 during the nine months ended October 27, 2024, compared to $36,000 in the prior year, showing an increase in reliance on credit[26] Strategic Initiatives - The company is focused on enhancing operational and financial performance through strategic initiatives and improved inventory management[4] - The Adairsville fulfillment center processed over 65% of total network volume, significantly reducing fulfillment costs to 27% of the legacy centers' costs[9] Future Outlook - For fiscal 2024, the company expects net sales of approximately $640 million and a gross margin reduction of about 125 basis points compared to the prior year[12]