Q1 2024 Duluth Holdings Inc Earnings Call Transcript
Key Points
- Duluth Holdings Inc (DLTH) successfully tested an underwear trade-up event, which increased store traffic by more than 50% and contributed a 120-basis-point benefit for the quarter.
- The Adairsville fulfillment center reduced unit fulfillment costs by 56% compared to the prior year and processed 60% of total volume in the first quarter.
- The company diversified its carrier base in mid-April, lowering outbound shipping costs.
- Mobile penetration continued to grow, accounting for over half of digital sales and more than two-thirds of site visits.
- The women's first layer business grew by 8%, driven by popular products like Armachillo, Buck Naked, and Lost Lake.
- First-quarter net sales declined by 5.7%, impacted by lower traffic and in-stock levels.
- The men's apparel business declined by 7.1%, with significant softness in Dry on the Fly bottoms, Longtail, and AKHG.
- Retail store sales declined by 7% due to challenging traffic conditions.
- Direct channel sales saw a decline of 10%, driven by lower traffic and reduced in-stock levels.
- Gross margin contracted by 20 basis points to 52.8%, with a delay in the impact of new product costs due to older, higher-cost inventory.
Good morning, everyone, and welcome to the Duluth Holdings Incorporated first-quarter 2024 conference call. (Operator instructions) Please also note today's event is being recorded.
At this time, I'd like to turn the floor over to Nitza McKee. Ma'am, please go ahead.
Thank you and welcome to today's call to discuss Duluth Trading's first-quarter financial results. Our earnings release, which was issued this morning is available on our Investor Relations website at ir.duluthtrading.com, under Press Releases.
I'm here today with Sam Sato, President and Chief Executive Officer; and Heena Agrawal, Senior Vice President and Chief Financial Officer. On today's call, management will provide prepared remarks and then we will open the call to your questions.
Before we begin, I would like to remind you that the comments on today's call will include forward-looking statements, which can be identified by the use of words such as estimates, anticipate, expect, and similar phrases. Forward-looking statements by their
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