- Prachi Singh |
Total sales for the first quarter declined to 107.7 million dollars from 107.9 million dollars in the prior year's first quarter. The company said, decrease of 0.2 million dollars in total sales were due to a comparable sales decrease of 2.1 million dollars or 2.1 percent compared to a comparable sales increase of 2 percent last year. In the month of April, comparable sales increased to 6.4 percent, which coincided with the start of our spring television marketing campaign.
"We're pleased to report that our sales momentum has accelerated since the start of fiscal 2017," said President and CEO David Levin in a media statement, adding, "A recent report, which has been repeated by various media outlets, has called into question our ability to repay our debt. We ended fiscal 2016 with over 57 million dollars of unused, excess availability under our credit facility and a Debt to EBITDA ratio of 2.0x. We remain on track to generate free cash flow of 15 to 20 million dollars which will be used to repay our debt and repurchase our shares in the open market."
DXL posts net loss of 6.1 mn dollars
Gross margin, inclusive of occupancy costs, was 45.2 percent, compared with gross margin of 46.1 percent for the prior year's first quarter. Merchandise margins improved 10 basis points over first quarter of last year primarily due to fewer promotional markdowns.
Net loss for the quarter was 6.1 million dollars or 0.12 dollar per diluted share, compared with net income of 0.2 million dollars for the prior year's first quarter. On a non-GAAP basis, assuming a normalized tax rate of 40percent, adjusted net loss for the first quarter was 0.07 dollar per diluted share. The company said, this decline in earnings was driven primarily by a combination of higher planned marketing costs related to the company’s television advertising campaign as well as lower gross margin dollar contribution due to occupancy de-leverage.
EBITDA was 2.5 million dollars compared with 8.4 million dollars for the first quarter of fiscal 2016.
In the first quarter, the Company opened a total of 10 DXL retail stores, with two DXL retail stores opened in Ontario, Canada, and one DXL outlet store.
DXL reaffirms fiscal 2017 outlook
The company’s fiscal 2017 outlook, based on a 53-week year, includes sales in the range from 470 million to 480 million dollars, with a total company comparable sales increase of approximately 1 percent to 4 percent, gross margin rate of approximately 46 percent, an increase of 50 basis points from fiscal 2016.
Net loss, on a GAAP basis is expected to be in the range of 5.7 to 11.7 million dollars or 0.11 dollar to 0.23 dollar per diluted share, EBITDA of 24 to 30 million dollars and adjusted net loss, on a non-GAAP basis, of 0.06 dollar to 0.14 dollar per diluted share, assuming a normal tax rate of 40 percent.