Q2 2024 Duluth Holdings Inc Earnings Call Transcript
Key Points
- Duluth Holdings Inc (DLTH) reported a 1.8% increase in top-line sales for Q2 2024.
- Gross margin expanded by 90 basis points to 52.3%, driven by improved product costs from direct-to-factory sourcing initiatives.
- The women's business grew nearly 6%, with significant strength in the first-layer business and popular collections like Armachillo and Dry on the Fly.
- The company successfully launched new products and collaborations, including the Bullpen 3D underwear and new Duluth footwear collections.
- Duluth Holdings Inc (DLTH) paid off $11 million of outstanding debt, ending the quarter debt-free with a strong liquidity position of $210 million.
- Retail store sales declined by 4.4% due to challenging traffic trends, despite sequential improvements.
- The company incurred $7.4 million in restructuring expenses related to the exit of a legacy fulfillment center.
- Clearance inventory levels increased to 11% from 7% last year, indicating higher-than-planned clearance sales.
- SG&A expenses increased by 4.6% to $76.3 million, including a nonrecurring $2.4 million estimated sales tax expense.
- The company reported an adjusted EPS loss of $0.02, although this was an improvement from the previous year's loss.
Good morning, and welcome to the Duluth Holdings Inc. second-quarter 2024 conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Nitza McKee.
Thank you, and welcome to today's call to discuss Duluth Trading's second-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 estimate, anticipate, expect, and similar phrases. Forward-looking statements, by their nature, involve estimates, projections, goals,
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