US' Destination XL's Q2 sales down by 3.2% to $140 million

Net income for the second quarter was $0.18 per diluted share, as compared to net income of $0.85 per diluted share in the second quarter of fiscal 2022. Results for the second quarter of fiscal 2023 included a pre-tax charge of $4.2 million, in connection with the decision to terminate the frozen pension plan. Results for the second quarter of fiscal 2022 included an income tax benefit of $35.5 million, related to the release of the valuation allowance against deferred taxes, the company said in a press release.

“Our second quarter comparable sales decrease of 1.4 per cent was in line with our expectations. Despite achieving our quarterly forecast, our consumer is battling ongoing, adverse economic headwinds, and we are trimming our financial outlook for the remainder of the year. We now expect our sales to range from $535.0 million to $545.0 million with an adjusted EBITDA margin of 11.0 per cent to 12.0 per cent,” said Harvey Kanter, president and chief executive officer.

“Beyond fiscal 2023, I’m eager to share with you where we see the company heading in the next three to five years. We have begun a long-range strategic growth plan to meaningfully accelerate the trajectory of the company through three specific growth initiatives: marketing and brand-building, store development, and alliances/collaborations. We believe the plans we have developed to continue DXL’s growth to be further transformative and I have extended my employment agreement through August 2026 to lead the execution of these plans. I’m highly motivated to see it through, and I look forward to sharing with you how we expect to get there,” Kanter continued.

“It is important to note that DXL is in a fundamentally different position today than it was pre-pandemic. We have recapitalised our balance sheet to provide a greater level of financial flexibility, we have invested in our technical capabilities, and we have upgraded our leadership team to drive a heightened level of operational excellence. This all provides us with the opportunity to invest significantly in brand and awareness building that we lack today and that will be critical in helping us reach the underserved big & tall consumers. We have been buying back stock because we believe in our future. Let me be clear about this: We believe we are a growth company and greater growth is yet to come,” Kanter concluded.

The company sees potential for at least 50 net new store openings as a crucial aspect of its growth strategy. Despite having a presence in every significant metropolitan area in the United States, the firm acknowledges gaps in markets where big & tall consumers are currently underserved by their brand, DXL. According to recent research involving 2,500 big + tall men—comprising both customers and non-customers—49 per cent revealed that the absence of a nearby store was the reason they did not shop with DXL. Another 37 per cent cited inconvenient store locations. To address this, the company plans to inaugurate its first three new stores since fiscal 2018 this year. It also intends to launch another 10 stores in fiscal 2024, followed by 15 to 20 new stores in fiscal 2025.

Fibre2Fashion News Desk (RR)