Q1 2024 Destination XL Group Inc Earnings Call Transcript
Key Points
- Destination XL Group Inc (DXLG) launched a new brand advertising campaign for the first time since 2017, aiming to increase brand awareness and drive traffic.
- The company opened new stores in Coon Rapids, Minnesota, and Thousand Oaks, California, with plans to open more throughout the year, addressing gaps in their store footprint.
- DXLG is transitioning to a new and improved e-commerce platform, expected to enhance customer experience and operational capabilities.
- The collaboration with Nordstrom allows DXLG to reach new customers through Nordstrom's digital marketplace, potentially expanding their market reach.
- Despite sales challenges, DXLG maintained strong merchandise margins and careful expense management, contributing to a fortress balance sheet with no outstanding debt.
- First quarter sales performance was disappointing, with a comparable sales decrease of 11.3%, primarily due to lower traffic levels and conversion rates.
- The company faces ongoing macroeconomic challenges, including inflation, which is impacting consumer discretionary spending on apparel.
- DXLG's store traffic accounted for approximately 90% of the comp sales decline, indicating significant challenges in attracting in-store customers.
- The number of new whitespace stores and the timeline for their development is behind plans, with fewer stores opened than initially expected.
- The shift in consumer behavior towards lower-priced goods has pressured DXLG's sales, as their product offerings are typically in the moderate to upper-moderate price points.
Good day, and thank you for standing by. Welcome to the Q1 2024 Destination XL Group, Incorporated earnings call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, [Shelly Mokas], Vice President of Investor Relations. Please go ahead.
Thank you, operator, and good morning, everyone. Thank you for joining us on Destination XL Group's First Quarter Fiscal 2024 earnings call. On our call today are our President and Chief Executive Officer, Harvey Kanter, and our Chief Financial Officer, Peter Stratton.
During today's call, we will discuss some non-GAAP metrics to provide investors with useful information about our financial performance. Please refer to our earnings release, which was filed this morning and is available on our Investor Relations website at investor.dxl.com for an explanation and reconciliation of such measures.
Today's discussion also contains certain forward-looking statements
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