On May 30, 2024, Destination XL Group Inc (DXLG, Financial) released its 8-K filing reporting financial results for the first quarter of fiscal 2024. Destination XL Group Inc is a retailer of branded and Tall men's clothing and shoes in the United States, also selling products globally under various trade names including Destination XL, DXL, DXL Men's Apparel, and Casual Male XL.
First Quarter Financial Highlights
Destination XL Group Inc (DXLG, Financial) reported total sales of $115.5 million for the first quarter, a 7.9% decrease from $125.4 million in the same period last year. Comparable sales dropped by 11.3%. Net income was $0.06 per diluted share, down from $0.11 per diluted share in the first quarter of fiscal 2023. Adjusted EBITDA was $8.2 million, or 7.1% of sales, compared to $12.6 million, or 10.1% of sales, in the previous year.
Performance Analysis
The company's performance was impacted by persistent macroeconomic pressures, which led to decreased store traffic and lower online conversion rates. Despite these challenges, Destination XL Group Inc (DXLG, Financial) managed to maintain better-than-expected gross margins, inventory levels, and operating expenses.
“We expected fiscal 2024 to be challenging, but our first quarter sales results were disappointing. Our guidance for fiscal 2024 assumed an improvement in first quarter sales; however, the macroeconomic pressures we observed in the second half of fiscal 2023 persisted, continuing to negatively impact store traffic and online conversion,” said Harvey Kanter, President and Chief Executive Officer.
Financial Achievements and Strategic Initiatives
Destination XL Group Inc (DXLG, Financial) completed its $25.0 million stock repurchase program during the first quarter. The company also launched a new brand advertising campaign and opened new stores to address customer access issues. Additionally, DXLG is transitioning to a new eCommerce platform and has formed an alliance with Nordstrom to expand its market reach.
Income Statement Highlights
| For the three months ended | May 4, 2024 | April 29, 2023 |
|---|---|---|
| Sales | $115,489 | $125,442 |
| Cost of goods sold including occupancy | $59,807 | $64,526 |
| Gross profit | $55,682 | $60,916 |
| Net income | $3,793 | $6,967 |
| Net income per share (diluted) | $0.06 | $0.11 |
Balance Sheet and Cash Flow
As of May 4, 2024, Destination XL Group Inc (DXLG, Financial) had cash and investments totaling $53.2 million, up from $46.0 million as of April 29, 2023, with no outstanding debt. The company reported a free cash flow of $(7.0) million for the first three months of fiscal 2024, compared to $(5.9) million in the same period last year.
Outlook
Given the ongoing macroeconomic challenges, Destination XL Group Inc (DXLG, Financial) has adjusted its full-year guidance to the lower end, expecting sales of $500 million with a mid-single-digit decrease in comparable sales. The company aims to achieve a 7% adjusted EBITDA margin for fiscal 2024.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Destination XL Group Inc for further details.
