Destination XL posts marginal decline in Q1 sales

For its first quarter, Destination XL Group Inc. said total sales decreased 0.3 percent to 113 million dollars. The company said, decrease of 0.3 million dollars in total sales was primarily due to a comparable sales decrease of 1.2 percent or 1.3 million dollars and a decrease of 1.6 million dollars from closed stores partially offset by increases in wholesale revenue of 2.4 million dollars and other revenue of 0.1 million dollars.

Commenting on the first quarter trading, the company’s new President and CEO Harvey S. Kanter said in a statement: “I’ve spent the past eight weeks carefully listening and learning about how DXL delights our big and tall guests and I’m absolutely thrilled with the opportunities ahead. We saw declines in traffic in both stores and on the web, which we primarily attributed to severe winter weather in the first half of the quarter and the delayed arrival of warm spring weather in the second half of the quarter.”

Review of Destination XL’s Q1 performance

For the first three months of fiscal 2019, the company’s direct sales increased to 21.6 percent of retail segment sales as compared to 21.2 percent for the first three months of fiscal 2018. On a trailing 12 month-period ending May 4, 2019, the company said, direct sales were 21.7 percent of retail segment sales as compared to 21.1 percent for the trailing 12-month period ending May 5, 2018.

Gross margin rate, inclusive of occupancy costs, was 43.7 percent compared to 44.7 percent for the first quarter of fiscal 2018, a 100 basis point decrease. Net loss for the quarter was 3.1 million dollars or 6 cents per diluted share compared with 3.1 million dollars or 6 cents per diluted share, in 2018. On a non-GAAP basis, adjusted net loss per share was 4 cents per diluted share compared to 4 cents per diluted share for the first quarter of fiscal 2018. Adjusted EBITDA were 4.8 million dollars compared to 5.3 million dollars for the same quarter of fiscal 2018.

The company expects to deliver comparable sales growth in its omni-channel retail business and to generate free cash flow in fiscal 2019. In fiscal 2019, Destination XL plans to open two new DXL retail stores, rebrand 12 Casual Male XL retail stores to DXL retail stores, and rebrand one Casual Male XL outlet to a DXL outlet store and also plans to close five Casual Male XL retail stores, one DXL store and all five Rochester Clothing stores.

Picture:Facebook/DXL Men's Apparel

 

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