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Net Sales: $107.5 million, down from $119.2 million in the previous year.
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Comparable Sales: Declined 11.3% for the quarter.
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Gross Margin: 45.1%, down from 47.5% last year.
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SG&A Expenses: Increased to 44.1% of sales from 40.2% last year.
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Adjusted EBITDA Margin: 1% of sales, down from 7.3% last year.
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Inventory: $89.1 million, a decrease of over 10% from last year.
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Store Openings: Two new stores opened in Q3, with four more planned by year-end.
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Cash and Investments: $43 million at the end of the quarter.
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Share Repurchase: 3.6 million shares repurchased for approximately $10.2 million.
Release Date: November 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Destination XL Group Inc (NASDAQ:DXLG) maintained a disciplined operating regimen, avoiding material erosion in merchandise margin despite consumer spending headwinds.
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The company successfully managed inventory, reducing it by over 10% compared to the previous year, and kept clearance penetration in line with long-term targets.
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DXLG opened two new stores in the third quarter, with plans for four more by the end of the fiscal year, aiming to address ease of access for customers.
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The company has transitioned to a new e-commerce platform, which is expected to enhance the online customer experience and drive growth.
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DXLG is launching a new loyalty program designed to enhance customer engagement and drive long-term growth through more compelling benefits.
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Comparable sales declined by 11.3% for the quarter, with in-store sales down 9.9% and direct sales down 14.7%.
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The company faced ongoing macroeconomic challenges, with big and tall customers demonstrating price sensitivity and stretching time between shopping trips.
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Gross margin decreased by 240 basis points due to increased store occupancy costs as a percentage of net sales.
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SG&A expenses as a percentage of sales increased to 44.1%, driven by lower sales and increased costs in employee healthcare, technology, and professional services.
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DXLG revised its sales outlook to the lower end of its range, with an adjusted EBITDA margin of approximately 4.5%, down from previous expectations.
Q: Can you elaborate on the fourth quarter guidance and whether recent trends indicate improvement? A: Peter Stratton, CFO, explained that while it’s early in the quarter, there has been some improvement. The guidance reflects better comparables against last year and optimism about planned initiatives and improved consumer sentiment.