Duluth Holdings, a US-based lifestyle brand of men's and women's casual wear, workwear, and accessories, has reported a 1.8 per cent increase in net sales for the second quarter of fiscal 2024 (Q2 FY24), reaching $141.6 million, compared to $139.1 million in the same period last year. This growth was primarily driven by a strong performance in the direct-to-consumer segment, despite challenges in retail store sales.

Direct-to-consumer net sales increased by 5.6 per cent to $91.7 million, primarily due to higher site conversion rates compared to the previous year. However, retail store net sales decreased by 4.4 per cent to $49.9 million, attributed to slower in-store traffic, which was partially offset by strong conversion rates in stores, the company said in a press release.

Duluth Holdings saw an improvement in gross profit, which increased to $74.0 million, or 52.3 per cent of net sales, up 90 basis points from the prior year's 51.4 per cent. This improvement was driven by the company’s successful sourcing initiative. However, the company reported a net loss of $3.7 million, with an adjusted net loss of $0.6 million, compared to a net loss of $2 million in the same quarter last year.

Earnings per diluted share were reported at minus $0.11, with an adjusted EPS of minus $0.02. Despite the net loss, adjusted EBITDA increased by $2.0 million from the previous year, reaching $10.6 million, representing 7.5 per cent of net sales. Selling, general, and administrative expenses rose by 4.6 per cent to $76.3 million, up from $72.9 million in the same period last year.

“We are pleased to have returned to top-line growth in the second quarter, while also expanding our gross margin as we begin to see the benefits of our product development and sourcing initiatives. During the quarter we saw a trend line improvement in both traffic and transactions with healthy shopper conversion, fuelling 1.8 per cent year-over-year net sales growth,” said president and CEO, Sam Sato.

Fibre2Fashion News Desk (DP)