Duluth Holdings Inc (NASDAQ: DLTH) stock fell over 9.2% on 14th June, 2019 (as of 12:50 pm GMT-4; Source: Google finance) after the company missed the earnings estimate and posted mixed results for the first quarter of FY 19. The company has delivered the net loss of $7.6 million, compared to net loss of $0.7 million, in the prior-year first quarter. The company have opened five retail stores in Friendswood, TX; Katy, TX; Wichita, KS; Spokane Valley, WA; and Jacksonville, FL, totaling approximately 78,000 gross square feet. The Company has ended the first quarter 2019 with a cash balance of $1.0 million, net working capital of $63.4 million, and $39.2 million outstanding on its $130.0 million revolving line of credit.
Moreover, the gross profit rose 8.9% to $60.9 million, or 53.3% of net sales, compared to $55.9 million, or 55.8% of net sales, in the corresponding prior-year period. The 250-basis point decline in gross margin was primarily due to a decrease in product margins due to product mix on recent clearance activity, coupled with a slight decrease in shipping revenues
DLTH in the first quarter of FY 19 has reported the adjusted loss per share of 23 cents, missing the analysts’ estimates for the adjusted loss per share of 22 cents, as per Zacks Investment Research. The company had reported the adjusted revenue growth of 14 percent to $114.2 million in the first quarter of FY 19, beating the analysts’ estimates for revenue of $114.1 million. The net sales increase is due to a 42.8% rise in retail net sales, offset by a 0.8% decline in direct net sales, with increases in both the men’s and women’s businesses. The decline in direct net sales has continued into the first five weeks of the second quarter. The rise in retail net sales was due to new stores with 51 stores in the first quarter of 2019 as compared to 33 stores in the same period a year ago, partially offset by existing stores.
For FY 19, DLTH expects net sales to be in the range of $645.0 million to $655.0 million, adjusted EBITDA is expected to be in the range of $60.0 million to $64.0 million, EPS is expected to be in the range of $0.74 to $0.80 per diluted share and capital expenditures is expected to be in the range of $40.0 million to $45.0 million. The company also expects for FY 19, 15 new store openings, adding 230,000 to 240,000 of additional gross square footage.