Duluth Trading Company, a lifestyle brand specializing in men’s and women’s workwear, casual wear, outdoor apparel, and accessories, announced its financial results for the fiscal second quarter ended July 28, 2024. The company reported positive performance marked by a return to top-line growth and an expanded gross margin, reflecting the successful implementation of its product development and sourcing initiatives.
During the quarter, Duluth Trading witnessed an improvement in both traffic and transactions, coupled with healthy shopper conversion, leading to a year-over-year net sales growth of 1.8%. This growth was fueled by innovative product launches like Dry on the Fly, Armachillo, and DuluthFlex Fire Hose Sweat Management, showcasing the company’s commitment to meeting customer needs with high-quality and functional apparel.
Looking ahead, Duluth Trading remains optimistic with a strong lineup of new products for the third quarter, including Duluth Reserve, Bullpen 3D, and Souped up Sweats. The company also expanded its plus-size assortment, further solidifying its commitment to inclusivity and catering to a broader customer base. The company’s second underwear trade-up event, held on August 10th, saw positive results with increased traffic, higher overall sales, and a significant engagement of female shoppers, a key strategic growth area for Duluth Trading.
From a structural perspective, Duluth Trading has successfully transitioned into phase two of its fulfillment center network plan, aimed at maximizing productivity and capacity. The company’s highly automated fulfillment center in Adairsville, Georgia, now processes 58% of all online orders and replenishment volume, contributing to shorter delivery times and lower fulfillment costs. The success of the Adairsville facility has allowed the company to accelerate phase two of its overall fulfillment center network plan, which includes the planned exit of its Dubuque fulfillment center in October 2024. This strategic move is expected to reduce overhead expenses by approximately $1.2 million during the fourth quarter of the current fiscal year, with an annualized expense reduction of approximately $5.0 million and cash savings of $4.0 million.
Duluth Trading ended the quarter with a strong financial position, reporting $9.8 million of cash and cash equivalents, no outstanding debt on its revolving line of credit, and approximately $210 million of liquidity. The company reaffirmed its fiscal 2024 outlook, excluding restructuring expenses and sales tax expense accrual, expecting net sales of approximately $640 million, Adjusted EBITDA of approximately $39 million, and capital expenditures of approximately $25 million.
Duluth Trading remains focused on its long-term growth strategy, prioritizing innovation, customer experience, and operational efficiency. The company’s commitment to these areas is expected to drive continued success and deliver value for shareholders.
