Destination XL Group, Inc. (NASDAQ:DXLG), the largest omni-channel specialty retailer of big and tall men’s apparel, today reported operating results for the third quarter of fiscal 2017.
Fiscal 2017 Third Quarter Highlights
•Total sales increased 1.8% to $103.7 million compared to $101.9 million in the prior-year quarter.
•Comparable sales decreased 0.1%.
•Net loss of $5.7 million vs. net loss of $4.5 million in the prior year quarter.
•EBITDA of $2.8 million compared to $3.9 million in the prior year quarter.
“Our third quarter results reflect the difficult retail apparel environment that has persisted for most of 2017,” said President and CEO David Levin. “Unseasonably warm weather, disruption from Hurricanes Irma and Harvey, and no incremental marketing support all contributed to a 5% decline in store traffic. However, improvements in conversion and average transaction value allowed us to deliver essentially a flat comp for the quarter. On a positive note, store traffic has picked up considerably in the last two weeks of October and the first two weeks in November.”
Levin further commented, “Despite the soft results for the third quarter, we are optimistic regarding the fourth quarter. Earlier this month we launched our new advertising campaign, which we call Time to XL. I am confident that this campaign signals a new chapter for the DXL brand. It is time to change the conversation around men’s XL apparel and celebrate the style of our customer base. It is time for us to embrace our position as the industry champion for the XL community.”
“The new campaign will be delivered through social, digital, radio and television, and features brand ambassadors including 10-time MLB All-Star David Ortiz, producer and artist DJ Khaled, singer and songwriter Sundance, NHL Stanley Cup winner Hal Gill and fashion blogger Kelvin Davis – five celebrities with larger than life personalities, each with his own sense of #XLstyle. Please join us at investor.destinationxl.com to experience the new campaign.”
Total sales for the third quarter increased 1.8% to $103.7 million from $101.9 million in the prior year’s third quarter. Comparable sales for the third quarter decreased 0.1%.
Gross margin, inclusive of occupancy costs, was 43.2%, compared with gross margin of 44.4% for the prior year’s third quarter. The decrease in gross margin was due to a decrease of 120 basis points in merchandise margin from the third quarter of last year, primarily due to more aggressive markdowns related to our inventory productivity initiatives. We expect markdowns to return to a more normalized level in the fourth quarter with a merchandise margin consistent with the prior year. Occupancy costs as a percentage of total sales were flat to the prior year.
SG&A expenses for the third quarter were 40.5% of sales, compared with 40.6% in the prior year’s third quarter. On a dollar basis, SG&A expense increased $0.6 million from the prior year quarter, partly due to increases in store payroll and other supporting costs associated with a greater DXL store base and e-commerce initiatives.
Net loss for the third quarter was $(5.7) million, or $(0.12) per diluted share, compared with a net loss of $(4.5) million, or $(0.09) per diluted share, for the prior year’s third quarter. On a non-GAAP basis, assuming a normalized tax rate of 40%, adjusted net loss for the third quarter was $(0.07) per diluted share compared with a net loss of $(0.05) per diluted share for the prior year’s third quarter.
more detail at: http://investor.destinationxl.com/releasedetail.cfm?ReleaseID=1049157