Shares of Duluth Holdings (NASDAQ:DLTH) were under modest pressure early Thursday morning as a decline in Q4 profit coupled with soft 2024 sales and profit guidance weighed.
“While fiscal 2023 was a challenging year as consumers remain selective in their discretionary spend, our fourth quarter was highlighted by growth in both the Duluth and AKHG brands driven by our women’s business which registered year-over-year growth of 12%,” CEO Sam Sato said.
The company earned a profit of $0.21 per share which was down from $0.23 in the same quarter last year. This missed the consensus estimate by 6 cents. For 2023, Duluth (DLTH) reported a loss of $0.28 per share compared to a profit of $0.07 in 2022. This is below the company’s 2023 estimate for a loss of $0.15 to $0.25 per share. Cost of goods sold (excluding depreciation and amortization) increased by 8% and 3.8% for Q4 and 2024, respectively.
Total sales increased 1.6% in Q4 to $245.6M beating estimates by $3.1M, gross profit margin decreased to 48.2% vs 51.2% year-over-year primarily due to a lower mix of full price sales, and adjusted EBITDA increased 2.4% to $21.1M.
By segment, DTC sales were up 8%, and retail store sales were down 12.2%. Mobile sales increased by 20% making this the largest sales channel for the company.
On the balance sheet, cash and cash equivalents were down 29% to $32.2M at the end of fiscal 2023 with no outstanding Duluth Trading bank debt.
Looking towards 2024, Duluth (DLTH) anticipates a loss of $0.22 to $0.07 per share on sales between $640M to $660M. This compares to the Street’s consensus for a loss of $0.08 per share on $659.9M in sales. Adjusted EBITDA is targeted to be between $39M to $45M.
