Destination XL Group Reports Q2 Fiscal 2024 Financial Results

Destination XL Group Reports Q2 Fiscal 2024 Financial Results

CANTON, Mass., Aug. 29, 2024 (GLOBE NEWSWIRE) -- Destination XL Group, Inc. (NASDAQ:DXLG), the leading integrated-commerce specialty retailer of Big + Tall men's clothing and shoes, today announced its operating results for the second quarter of fiscal 2024, which ended on August 3rd.

Key Financial Metrics

In the latest quarter, DXLG’s total revenue saw a 10.9% decline compared to the same period last year, falling short of Wall Street consensus estimates. The earnings per share also dropped dramatically from $0.18 in Q2 FY2023 to $0.04 this quarter. Adjusted EBITDA contracted to $6.5 million, signifying a significant decline from the prior year's $22.9 million.

Segment Performance

Both retail and direct segments witnessed declines in revenue. The retail segment revenue dropped by 9.9%, while the direct segment revenue fell by 13.1%.

Operational Highlights

• Marketing & Brand Building: Launched a new brand campaign on May 13th in three test markets showing positive results in traffic and customer acquisition.
• Store Development: Opened three new DXL stores during the quarter and plans to scale back the store openings in 2025 from 15 to 10 stores.
• New Website Platform: Continued transition to a new eCommerce platform with the second phase expected to be completed by end of September.
• Alliances & Collaborations: Launched DXL's assortment on Nordstrom’s digital marketplace on May 28th.

Management Comments

Harvey Kanter, President and CEO, stated, "Our second-quarter results reflect a challenging retail apparel market, with a decrease in foot traffic and lower conversion rates in our direct business. Despite reduced sales, we maintained flat merchandise margins and a strong balance sheet. We are making strategic adjustments to our advertising spend and scaling back new store developments to prioritize profitability and free cash flow."

Forward Guidance

For fiscal 2024, DXLG has revised its full-year sales guidance downwards to a range of $470 million to $490 million from the previous guidance of $500 million. The adjusted EBITDA margin is now expected to be around 6%, down from the earlier guidance of 7%. Comparable sales are expected to decrease between 6% and 10%.

Stock Price Movement

The company’s stock price remained unchanged following the earnings release, showing a 0.0% change after the event.

Summary

Destination XL Group faced significant challenges in the second quarter of fiscal 2024, attributed primarily to macroeconomic pressures affecting consumer spending. While the company has taken measures to adjust its expenditures and optimize operations, disappointing sales led to a downward revision of its full-year financial outlook. The management remains focused on profitability and maintaining a strong balance sheet amid ongoing economic uncertainties.

The report has been organized into a more readable format, and unnecessary columns have been removed from the financial metrics table.