US' Duluth Holdings sees $15.3 mn Q1 loss, keeps FY25 outlook

Duluth Holdings Inc, operating as Duluth Trading Company, reported a 12 per cent drop in net sales to $102.7 million for the first quarter (Q1) of fiscal 2025 (FY25) ended May 4. The company posted a net loss of $15.3 million, widening from $7.9 million a year earlier. Adjusted net loss stood at $10.8 million, or $0.32 per diluted share.

Direct-to-consumer (DTC) sales declined by 17.1 per cent to $62.6 million due to reduced site traffic, while retail store sales fell by 2.6 per cent to $40.2 million, driven by slower in-store traffic, the company said in a media release.

The gross margin narrowed to 52 per cent from 52.8 per cent, impacted by a higher level of clearance activity, partially offset by improved product costs from direct sourcing. Gross profit dropped to $53.4 million, down from $61.6 million in the same period last year.

Operating expenses declined by 6.9 per cent to $65.7 million; however, as a percentage of sales, they increased to 64 per cent from 60.5 per cent due to the sharper fall in revenue. Adjusted EBITDA stood at negative $3.8 million, compared to $1.8 million in the prior year’s first quarter—a decrease of $5.6 million. The company ended the quarter with $8.6 million in cash and net liquidity of $44.6 million.

“Our operating performance over the past few years has been challenging as business complexity has increased. To capture the full potential of the brand and drive shareholder value, I am taking decisive actions to simplify the business and focus on the key areas of brand awareness, solution-based products and product innovation, and customer service. I will be conducting an in-depth review of our brand and product portfolio as we look to reinvigorate the Duluth brand,” stated president and CEO Stephanie Pugliese.

“I am committed to leveraging the foundational work on product sourcing, fulfilment centre network optimisation and store portfolio rationalisation, as well as streamlining our expense base across the organisation. I strongly believe that business simplification and a focus on Duluth Trading's core strengths will create shareholder value and return the company to profitable growth over time,” concluded Pugliese.

Duluth is maintaining its FY25 guidance, with leadership citing ongoing efforts to streamline operations amid a challenging retail landscape.

ALCHEMPro News Desk (HU)