US' Destination XL Group posts sales of $124.8 mn in Q2 FY24

Destination XL Group, a US-based retailer specialising in big and tall men's apparel, has reported total sales of $124.8 million for the second quarter of fiscal 2024 (Q2 FY24), down from $140 million in Q2 FY23. This 10.9 per cent decrease in comparable sales was the primary driver behind the drop in total revenue. The decrease in sales included a 10 per cent decline in store sales and a 12.8 per cent drop in the company's direct business.

The gross margin rate for Q2 FY24, inclusive of occupancy costs, was 48.2 per cent, down from 50.3 per cent in the same quarter last year. The 210-basis-point decline in gross margin highlights the impact of reduced sales volume on the company’s overall profitability, the company said in a press release.

Selling, general, and administrative expenses rose significantly as a percentage of sales, reaching 43 per cent in Q2 FY24, compared to 33.9 per cent in Q2 FY23. The increase in selling, general, and administrative expenses was driven in part by higher marketing costs, which represented 8.8 per cent of sales in Q2 FY24, up from 5 per cent in the previous year.

Net income for the second quarter of FY24 was $2.4 million, or $0.04 per diluted share, a sharp decline from the $11.6 million, or $0.18 per diluted share, reported in the same period last year. Adjusted EBITDA, a non-GAAP measure, also saw a substantial decrease, coming in at $6.5 million for Q2 FY24, compared to $22.9 million in Q2 FY23.

“Our second quarter results reflect a challenging retail apparel market punctuated by a lack of foot traffic to our stores and lower conversion rates in our direct business,” said Harvey Kanter, president and CEO. “During the quarter, our customers continued to feel the impact of inflationary pressures and macro-economic uncertainty on their discretionary spending. Despite a disappointing sales performance, we maintained a flat merchandise margin, with meaningfully less inventory and a strong balance sheet."

Fibre2Fashion News Desk (DP)