Destination XL sales up 1.8 percent in FY16

For the fourth quarter, total sales at Destination XL (DXL) declined 1.1 percent to 122.6 million dollars from 124 million dollars in the fourth quarter of fiscal 2015. For fiscal 2016, total sales increased 1.8 percent to 450.3 million dollars from 442.2 million dollars in fiscal 2015.

"Despite the 2016 retail environment being one of the most challenging in recent memory, we were very pleased to deliver strong growth in EBITDA and free cash flow. In 2016, we fully funded our DXL store expansion from free cash flow and grew EBITDA nearly 36 percent," said President and CEO David Levin in a statement, adding, "Six out of ten big and tall guys still do not know who we are and, therefore, our top priority in 2017 is customer retention and acquisition. We intend to fuel that objective with a marketing dollar increase of approximately 40 percent this year."

Q4 comparable sales down 2.7 percent

The company said, the decrease of 1.4 million dollars in total sales was primarily driven by a comparable sales decrease of 2.7 million dollars or 2.4 percent, which included a comparable sales decrease of 1.9 percent from our DXL stores. This decrease, the company said, was partially offset by sales from new DXL stores. DXL added that sales for the quarter were negatively impacted by the overall weakness in the retail environment and its decision to eliminate the fall marketing campaign.

The increase in sales of 8.1 million dollars in 2016, the company added, was primarily due to the comparable DXL store sales growth of 2.4 percent or 5.4 million dollars. In addition, new DXL store growth was partially offset by sales from closed Casual Male XL stores and comparable store decreases from the company’s other store formats. Sales per square foot for the DXL retail stores, on a rolling 12-month basis, increased to 180 dollars for fiscal 2016 from 177 dollars for the prior year.

Net income reaches 1.8 mn dollars in Q4

For the fourth quarter, gross margin, inclusive of occupancy costs, was 44.9 percent, compared with gross margin of 45.8 percent for the same quarter of fiscal 2015. For the fiscal year, gross margin, inclusive of occupancy costs, was 45.5 percent compared to 46.1 percent for fiscal 2015, a decrease of 60 basis points.

Net Income for the quarter was 1.8 million dollars or 0.04 dollar per diluted share, compared with a net loss of 1.4 million dollars or 0.03 dollar per diluted share, for the fourth quarter of fiscal 2015. On a non-GAAP basis, assuming a normalized tax rate of 40 percent, adjusted net income was 0.02 dollar per diluted share compared with a net loss of 0.02 dollars in fiscal 2015.

The net loss for fiscal 2016 was 2.3 million dollars or 0.05 dollars per diluted share, compared with a net loss of 8.4 million dollars or 0.17 dollar per diluted share, in fiscal 2015. On a non-GAAP basis, the adjusted net loss was 0.03 dollar per diluted shares as compared to 0.10 dollars per diluted share for fiscal 2015.

EBITDA, a non-GAAP measure, for the quarter were 10.8 million dollars, compared with 7.3 million dollars for the fourth quarter of fiscal 2015. The improvement, the company said, was driven by a decrease in SG&A expenses. EBITDA for fiscal 2016 was 31.6 million dollars compared with 23.3 million dollars for the fiscal 2015. For fiscal 2016, the company opened 30 new DXL stores, which included four outlets.

Comparable store sales to increase 1 to 4 percent in FY17

The company’s fiscal 2017 outlook, based on a 53-week year, includes sales in the range of 470 million dollars 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, of 5.7 dollars to 11.7 million dollars, or 0.11 dollar to 0.23 dollars per diluted share and EBITDA of 24 to 30 million dollars. Adjusted net loss, on a non-GAAP basis, is expected to be of 0.06 dollar to 0.14 dollar per diluted share, assuming a normal tax rate of 40 percent.

DXL expects to open 19 DXL retail stores and one DXL outlet store in fiscal 2017, while closing 16 Casual Male XL retail stores and three Casual Male XL outlet stores.

Picture:DXL website