However, the company saw a 0.6 per cent year-on-year (YoY) increase in comparable sales for the quarter, driven by a 1.5 per cent increase in store sales. Meanwhile, direct business sales dipped by 1.6 per cent YoY. The uptick in comparable sales was balanced out by sales from shuttered stores and a decrease in non-comparable sales, the company said in its operating results for Q1 FY23.

Gross margin for Q1 FY23 was reported at 48.6 per cent, marking a 140-basis points YoY decrease from the 50 per cent gross margin rate of Q1 FY22. This reduction was attributed to a 110-basis points decline in merchandise margin and a 30-basis points increase in occupancy costs, primarily due to sales deleveraging.

Selling, general, and administrative expenses, as a percentage of sales, were reported at 38.5 per cent in Q1 FY23, compared to 36.5 per cent in Q1 FY22. On a dollar basis, selling, general, and administrative expenses increased by $1.7 million as compared to the same quarter of the prior fiscal.

Net income for Q1 FY23 was reported at $7 million, or $0.11 per diluted share, compared to a net income of $13.4 million, or $0.20 per diluted share, in Q1 FY22.

Destination XL Group also reported adjusted EBITDA, a non-GAAP measure, of $12.6 million for Q1 FY23, compared to $17.3 million for the first quarter of FY22.

“We are pleased to report our 9^th consecutive quarter of positive comp sales growth. While this has been a more challenging growth quarter affected by broader macro headwinds that have impacted consumer spending, we remain focused on our vision to provide big plus tall men the freedom to choose their own style. Our brand’s positioning campaign to the big plus tall consumer is ‘Wear what you want.’ This campaign is driven by DXL’s competitively differentiated position in fit, assortment, and experience. We remain incredibly excited and enthusiastic about our ability to be the haven for the big plus tall customer whether he is shopping online or in-store. After all, big plus tall is all that we do!” said Harvey Kanter, president, and chief executive officer.

Fibre2Fashion News Desk (DP)