DLTH stock rose on December 2, 2021, after the company reported earnings and revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... beats.
Duluth Holdings Inc. Announces Third Quarter 2021 Financial Results
MOUNT HOREB, Wis., Dec. 02, 2021 (GLOBE NEWSWIRE) — Duluth Holdings Inc. (dba, Duluth Trading Company) (“Duluth Trading” or the “Company”) (NASDAQ: DLTH), a growing lifestyle brand of men’s and women’s workwear, casual wear, outdoor apparel and accessories, today announced its financial results for the fiscal third quarter ended October 31, 2021.
Duluth Holdings reported Q3 EPS of 9c versus the consensus estimate of (19c). The company reported Q3 revenue of $145M versus the consensus estimate of $142.52M.
Highlights for the Third Quarter Ended October 31, 2021
- Net sales increased 7.2% to $145.3 million compared to $135.5 million in the third quarter of 2020 and increased 21.3% when compared to the same period in 2019
- Gross margin improved 520 basis points to 57.6% compared to 52.4% in the prior year third quarter
- Operating income increased $2.0 million, to $4.9 million compared to $2.9 million in the prior year third quarter
- Net income was $2.8 million, or $0.09 per diluted share, compared to net income of $0.9 million, or $0.03 per diluted share in the prior year third quarter
- Adjusted EBITDA1 increased 15.3% to $13.2 million compared to $11.4 million in the prior year third quarter
- 1See Reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA in the accompanying financial tables.
Management Commentary
President and CEO, Sam Sato commented, “Our third quarter results reflect continued strength in customer demand for our core product offering and strong operating performance in the face of supply chain disruptions. Despite the congestion in the transportation networks, our business was able to maneuver and generate healthy sales growth of 7.2% and net income growth of over 200%, led by significant gross profit margin improvement. We are encouraged with the holiday selling trends to date and expect to end the year strong.”
“As we near the end of 2021 and look into 2022 and beyond, I’m excited with the progress we’ve made on developing our long-range Big Dam Blueprint and the insights that will inform our strategic growth opportunities. The building blocks of the blueprint will inform critical long-term investments in our business, many of which are underway today and will be embedded in our near-term plans. Importantly, the investments we make will be thoughtful and purposeful, matching the growth and needs of the business. The core pillars of our strategic plans are:
- Lead with a digital and customer first mindset in all aspects of our strategic initiatives
- Intensify our efforts to optimize our owned DTC channels by truly understanding how our customer wants to engage with Duluth
- Evolve our multi-brand platform to enable long term growth through product development that meets our customer’s end use
- Continually test and learn in alternative channels that can lead to incremental growth on top of our goal of reaching $1 billion in sales by 2025
- Invest in the enablement and future proofing of our enterprise through thoughtful, value creating investments in supply chain and digital capabilities”
- Operating Results for the Third Quarter Ended October 31, 2021
Net sales increased 7.2% to $145.3 million, compared to $135.5 million in the same period a year ago and increased 21.3% versus the third quarter of 2019. Retail store net sales increased by 22.3% to $60.1 million, a significant increase over last year’s third quarter when store traffic was adversely affected by the pandemic. For a more normalized comparison, retail store sales were up 3.3% compared with the third quarter of 2019. Direct-to-consumer net sales decreased by 1.4% to $85.2 million compared to the third quarter last year when online shopping was boosted by heavier discounts and customer store traffic was light due to covid concerns. For a more normalized comparison, direct-to-consumer sales increased 38.4% compared to the third quarter of fiscal 2019.
Net sales in store markets increased 10.5% to $103.0 million, compared to $93.6 million in the same period a year ago. The increase was driven by a continued ramp up in store traffic and positive conversion trends as compared to the prior year. Net sales in non-store markets increased slightly by 0.7%, to $41.1 million.
Men’s apparel net sales growth increased 7.5% driven by growth in year-round workwear, while women’s apparel net sales increased 5.6% driven by strength in woven bottoms and flannels.
Gross profit increased 17.8% to $83.6 million, or 57.6% of net sales, compared to $71.0 million, or 52.4% of net sales, in the corresponding prior year period. The significant increase in gross profit was driven by a higher mix of full price sales due to lower clearance inventory and successfully dialing back promotional activity.
Selling, general and administrative expenses increased 15.5% to $78.8 million, compared to $68.2 million in the same period a year ago. As a percentage of net sales, selling, general and administrative expenses increased to 54.2%, compared to 50.3% in the corresponding prior year period.
The increase in selling, general and administrative expense was primarily due to higher personnel costs, coupled with increased advertising expense as we pulled back in the prior year due to our uncertainty about customer demand resulting from the pandemic.
The effective tax rate related to controlling interest was 25% compared to 29% in the corresponding prior year period.
DLTH stock technical analysis
Large players volume is starting to uptrend which is bullish; however, the technical rating of DLTH is bad and it also does not present a quality setup at the moment. Prices have been extended to the upside lately. For a nice entry it is better to wait for a consolidation. Click here to sign up for email alerts on when DLTH stock is a good entry.
