News Release
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Net sales of
Inventory composition is healthy with 93% in current products
Strong financial condition with
Updated Fiscal 2024 outlook for
Summary of the First Quarter Ended
- Net sales of
$116.7 million compared to$123.8 million in the prior year first quarter - Quarter-end inventory composition healthy, down 5.9% compared to prior year first quarter
- Net loss of
$7.9 million and Adjusted EBITDA¹ of$1.8 million
¹See Reconciliation of net loss to EBITDA and EBITDA to Adjusted EBITDA in the accompanying financial tables.
Management Commentary
President and CEO,
On a lighter note, during the quarter we furthered our emotional connection and awareness with both existing and new customers with the launch of a successful underwear trade up event, which drove a store traffic increase of 50% on the day of the event with more than one third of the trade ups coming from women. We also launched our #showusyourbibs social media campaign which garnered tremendous buzz and supported continued growth in women’s-only buyers.” Sato concluded, “I am pleased with the progress we’re making against our longer-term strategic initiatives. Our focus for 2024 remains on accelerating the operational improvements of the strategic roadmap, expanding our pipeline of new and innovative products, optimizing our marketing mix, improving gross profit margin rates, and controlling what we can control by prudently managing expenses and inventories.”
Operating Results for the First Quarter Ended
Net sales decreased 5.7% to
Gross profit decreased to
Selling, general and administrative expenses increased 0.6% to
Balance Sheet and Liquidity
The Company ended the quarter with
Updated Fiscal 2024 Outlook
The Company is updating its fiscal 2024 outlook as follows:
- Net sales of approximately
$640 million - Adjusted EBITDA¹ of approximately
$39 million - EPS of approximately (
$0.22 ) per diluted share - Capital expenditures, inclusive of software hosting implementation costs, of approximately
$25 million
¹See Reconciliation of forecasted net income to forecasted EBITDA and forecasted EBITDA to forecasted Adjusted EBITDA in the accompanying financial tables.
Conference Call Information
A conference call and audio webcast with analysts and investors will be held on
- Live conference call: 844-875-6915 (domestic) or 412-317-6711 (international)
- Conference call replay available through
June 7, 2024 : 877-344-7529 (domestic) or 412-317-0088 (international) - Replay access code: 2264991
- Live and archived webcast: ir.duluthtrading.com
Investors can pre-register for the earnings conference call to expedite their entry into the call and avoid waiting for a live operator. To pre-register for the call, please visit https://dpregister.com/sreg/10183402/fab2d33666 and enter your contact information. You will then be issued a personalized phone number and pin to dial into the live conference call. Investors can pre-register any time prior to the start of the conference call.
About Duluth Trading
Duluth Trading is a lifestyle brand for the Modern, Self-Reliant American. Based in
Non-GAAP Measurements
Management believes that non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Within this release, including the tables attached hereto, reference is made to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). See attached Table “Reconciliation of Net Loss to EBITDA and EBITDA to Adjusted EBITDA,” for a reconciliation of net loss to EBITDA and EBITDA to Adjusted EBITDA for the three months ended
Adjusted EBITDA is a metric used by management and frequently used by the financial community, which provides insight into an organization’s operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA excludes certain items that are unusual in nature or not comparable from period to period.
The Company provides this information to investors to assist in comparisons of past, present and future operating results and to assist in highlighting the results of on-going operations. While the Company’s management believes that non-GAAP measurements are useful supplemental information, such adjusted results are not intended to replace the Company’s GAAP financial results and should be read in conjunction with those GAAP results.
Forward-Looking Statements
This press release 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 business outlook, business trends and certain other information herein, including statements under the heading “Updated Fiscal 2024 Outlook” are forward-looking statements. You can identify forward-looking statements by the use of words such as “may,” ”might,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “believe,” “estimate,” “project,” “target,” “predict,” “intend,” “future,” “budget,” “goals,” “potential,” “continue,” “design,” “objective,” “forecasted,” “would” and other similar expressions. The forward-looking statements are not historical facts, and are based upon Duluth Trading's current expectations, beliefs, estimates, and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond Duluth Trading's control. Duluth Trading's expectations, beliefs and projections are expressed in good faith, and Duluth Trading believes there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, estimates, and projections will be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements, including, among others, the risks, uncertainties, and factors set forth under Part 1, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the
(Tables Follow)
| Condensed Consolidated Balance Sheets | ||||||||||||
| (Unaudited) | ||||||||||||
| (Amounts in thousands) | ||||||||||||
| ASSETS | ||||||||||||
| Current Assets: | ||||||||||||
| Cash and cash equivalents | $ | 6,799 | $ | 32,157 | $ | 9,210 | ||||||
| Receivables | 10,572 | 5,955 | 6,437 | |||||||||
| Income tax receivable | 84 | 617 | — | |||||||||
| Inventory, net | 136,434 | 125,757 | 144,969 | |||||||||
| Prepaid expenses & other current assets | 17,537 | 16,488 | 15,918 | |||||||||
| Total current assets | 171,426 | 180,974 | 176,534 | |||||||||
| Property and equipment, net | 126,526 | 132,718 | 122,812 | |||||||||
| Operating lease right-of-use assets | 117,400 | 121,430 | 128,436 | |||||||||
| Finance lease right-of-use assets, net | 38,432 | 40,315 | 46,474 | |||||||||
| Available-for-sale security | 4,798 | 4,986 | 5,416 | |||||||||
| Other assets, net | 9,629 | 9,020 | 8,591 | |||||||||
| Deferred tax assets | 3,172 | 1,010 | 136 | |||||||||
| Total assets | $ | 471,383 | $ | 490,453 | $ | 488,399 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Trade accounts payable | $ | 37,419 | $ | 51,122 | $ | 36,123 | ||||||
| Accrued expenses and other current liabilities | 26,366 | 30,930 | 30,921 | |||||||||
| Income taxes payable | — | — | 1,423 | |||||||||
| Current portion of operating lease liabilities | 16,619 | 16,401 | 15,713 | |||||||||
| Current portion of finance lease liabilities | 3,253 | 3,149 | 2,885 | |||||||||
| Duluth line of credit | 11,000 | — | — | |||||||||
| Current maturities of TRI long-term debt¹ | 867 | 847 | 787 | |||||||||
| Total current liabilities | 95,524 | 102,449 | 87,852 | |||||||||
| Operating lease liabilities, less current maturities | 102,188 | 106,413 | 114,019 | |||||||||
| Finance lease liabilities, less current maturities | 33,435 | 34,276 | 36,688 | |||||||||
| TRI long-term debt, less current maturities¹ | 24,933 | 25,141 | 25,726 | |||||||||
| Total liabilities | 256,080 | 268,279 | 264,285 | |||||||||
| Shareholders' equity: | ||||||||||||
| (2,121 | ) | (1,738 | ) | (1,732 | ) | |||||||
| Capital stock | 105,061 | 103,579 | 99,968 | |||||||||
| Retained earnings | 115,943 | 123,816 | 129,303 | |||||||||
| Accumulated other comprehensive loss, net | (532 | ) | (427 | ) | (207 | ) | ||||||
| Total shareholders' equity of |
218,351 | 225,230 | 227,332 | |||||||||
| Noncontrolling interest | (3,048 | ) | (3,056 | ) | (3,218 | ) | ||||||
| Total shareholders' equity | 215,303 | 222,174 | 224,114 | |||||||||
| Total liabilities and shareholders' equity | $ | 471,383 | $ | 490,453 | $ | 488,399 | ||||||
| ¹Represents debt of the variable interest entity, |
||||||||||||
| DULUTH HOLDING INC. | ||||||||
| Consolidated Statements of Operations | ||||||||
| (Unaudited) | ||||||||
| (Amounts in thousands, except per share figures) | ||||||||
| Three Months Ended | ||||||||
| Net sales | $ | 116,684 | $ | 123,759 | ||||
| Cost of goods sold (excluding depreciation and amortization) | 55,060 | 58,108 | ||||||
| Gross profit | 61,624 | 65,651 | ||||||
| Selling, general and administrative expenses | 70,595 | 70,200 | ||||||
| Operating loss | (8,971 | ) | (4,549 | ) | ||||
| Interest expense | 993 | 934 | ||||||
| Other income, net | 16 | 148 | ||||||
| Loss before income taxes | (9,948 | ) | (5,335 | ) | ||||
| Income tax benefit | (2,083 | ) | (1,458 | ) | ||||
| Net loss | (7,865 | ) | (3,877 | ) | ||||
| Less: Net income (loss) attributable to noncontrolling interest | 8 | (8 | ) | |||||
| Net loss attributable to controlling interest | $ | (7,873 | ) | $ | (3,869 | ) | ||
| Basic earnings per share (Class A and Class B): | ||||||||
| Weighted average shares of common stock outstanding | 33,087 | 32,865 | ||||||
| Net loss per share attributable to controlling interest | $ | (0.24 | ) | $ | (0.12 | ) | ||
| Diluted earnings per share (Class A and Class B): | ||||||||
| Weighted average shares and equivalents outstanding | 33,087 | 32,865 | ||||||
| Net loss per share attributable to controlling interest | $ | (0.24 | ) | $ | (0.12 | ) | ||
| Consolidated Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| (Amounts in thousands) | ||||||||
| Three Months Ended | ||||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (7,865 | ) | $ | (3,877 | ) | ||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 8,251 | 7,413 | ||||||
| Stock based compensation | 1,372 | 990 | ||||||
| Deferred income taxes | (2,127 | ) | (1,365 | ) | ||||
| Loss on disposal of property and equipment | 13 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | (4,617 | ) | (396 | ) | ||||
| Income taxes receivable | 533 | — | ||||||
| Inventory | (10,677 | ) | 9,953 | |||||
| Prepaid expense & other current assets | 871 | 84 | ||||||
| Software hosting implementation costs, net | (2,617 | ) | (746 | ) | ||||
| Trade accounts payable | (13,150 | ) | (21,080 | ) | ||||
| Income taxes payable | — | (338 | ) | |||||
| Accrued expenses and deferred rent obligations | (4,635 | ) | (4,475 | ) | ||||
| Other assets | 37 | (17 | ) | |||||
| Noncash lease impacts | 945 | (119 | ) | |||||
| Net cash used in operating activities | (33,666 | ) | (13,973 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (1,525 | ) | (21,392 | ) | ||||
| Principal receipts from available-for-sale security | 48 | 44 | ||||||
| Net cash used in investing activities | (1,477 | ) | (21,348 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from line of credit | 28,000 | 10,000 | ||||||
| Payments on line of credit | (17,000 | ) | (10,000 | ) | ||||
| Payments on TRI long term debt | (204 | ) | (186 | ) | ||||
| Payments on finance lease obligations | (737 | ) | (694 | ) | ||||
| Payments of tax withholding on vested restricted shares | (383 | ) | (273 | ) | ||||
| Other | 109 | 136 | ||||||
| Net cash provided by (used in) financing activities | 9,785 | (1,017 | ) | |||||
| Decrease in cash and cash equivalents | (25,358 | ) | (36,338 | ) | ||||
| Cash and cash equivalents at beginning of period | 32,157 | 45,548 | ||||||
| Cash and cash equivalents at end of period | $ | 6,799 | $ | 9,210 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid | $ | 993 | $ | 934 | ||||
| Income taxes paid | $ | 2 | $ | 216 | ||||
| Supplemental disclosure of non-cash information: | ||||||||
| Unpaid liability to acquire property and equipment | $ | 1,392 | $ | 1,832 | ||||
| Reconciliation of Net Loss to EBITDA and EBITDA to Adjusted EBITDA | ||||||||
| For the Fiscal Quarter Ended |
||||||||
| (Unaudited) | ||||||||
| (Amounts in thousands) | ||||||||
| Three Months Ended | ||||||||
| (in thousands) | ||||||||
| Net loss | $ | (7,865 | ) | $ | (3,877 | ) | ||
| Depreciation and amortization | 8,251 | 7,413 | ||||||
| Amortization of internal-use software hosting subscription implementation costs | 1,170 | 1,270 | ||||||
| Interest expense | 993 | 934 | ||||||
| Income tax benefit | (2,083 | ) | (1,458 | ) | ||||
| EBITDA | $ | 466 | $ | 4,282 | ||||
| Stock based compensation | 1,372 | 990 | ||||||
| Adjusted EBITDA | $ | 1,838 | $ | 5,272 | ||||
| Reconciliation of Forecasted Net Loss to Forecasted EBITDA and Forecasted EBITDA to Forecasted Adjusted EBITDA | ||||
| For the Fiscal Year Ending |
||||
| (Unaudited) | ||||
| (Amounts in thousands) | ||||
| Forecasted | ||||
| Net loss | $ | (7,400 | ) | |
| Depreciation and amortization | 34,000 | |||
| Amortization of internal-use software hosting subscription implementation costs | 5,000 | |||
| Interest expense | 5,550 | |||
| Income tax expense | (2,400 | ) | ||
| EBITDA | $ | 34,750 | ||
| Stock based compensation | 4,250 | |||
| Adjusted EBITDA | $ | 39,000 | ||
A photo accompanying this announcement is available at: https://www.globenewswire.com/NewsRoom/AttachmentNg/0bb2c713-2011-4d67-9451-7bac32b4163a
Investor Contacts:Tom Filandro ICR, Inc. (646) 277-1200 DuluthIR@icrinc.com
Underwear Trade-Up Event
By Duluth Trading
Source: Duluth Trading Company