- Prachi Singh |
Total sales at Destination XL Group, for the third quarter increased 1.8 percent to 103.7 million dollars, while comparable sales decreased 0.1 percent. Gross margin, inclusive of occupancy costs, was 43.2 percent compared with 44.4 percent for the prior year's third quarter. Net loss was 5.7 million dollars or 0.12 dollar per diluted share compared with 4.5 million dollars or 0.09 dollar per diluted share, for the prior year's third quarter.
"Our third quarter results reflect the difficult retail apparel environment that has persisted for most of 2017," said the company’s President and CEO David Levin in a media statement, adding, "Unseasonably warm weather, disruption from Hurricanes Irma and Harvey, and no incremental marketing support all contributed to a 5 percent decline in store traffic. Despite the soft results for the third quarter, we are optimistic regarding the fourth quarter.”
Third quarter EBITDA declines to 2.8 mn dollars
On a non-GAAP basis, assuming a normalized tax rate of 40 percent, adjusted net loss for the third quarter was 0.07 dollar per diluted share compared with 0.05 dollar per diluted share for the prior year's third quarter. EBITDA was 2.8 million dollars compared with 3.9 million dollars for the third quarter of fiscal 2016.
During the first nine months of fiscal 2017, the company opened a total of 19 DXL retail stores, with 2 DXL retail stores opened in Ontario, Canada, and 1 DXL outlet store.
On a trailing twelve-month basis, ecommerce sales, as a percentage of net sales, the company said, were 20.8 percent at the end of the third quarter of fiscal 2017 as compared to19.5 percent at the end of the prior year's third quarter.
Destination XL revises FY17 Outlook
As a result of the sales shortfall in the third quarter of fiscal 2017, the company has revised guidance for fiscal 2017 and now expects total sales to range from 466 million dollars to 470 million dollars, with comparable sales being flat to an increase of 2 percent. This compares to a decrease from previous guidance of total sales of 470 to 480 million dollars and a comparable sales increase of 1 percent to 4 percent.
Gross margin rate is expected to be approximately 45 percent to 45.5 percent, a decrease of 50 basis points to flat from fiscal 2016 against previous guidance of 45.5 percent to 46 percent. Net loss, on a GAAP basis is expected to be between 17 to 21 million dollars, or 0.35 dollar to 0.42 dollar per diluted share, a decrease from previous guidance of 11.7 to 16.7 million dollars, or 0.24 dollar to 0.34 dollar per diluted share. EBITDA is anticipated to be between 16 to 20 million dollars, a decrease from previous guidance of 20 to 25 million.
Adjusted net loss, on a non-GAAP basis is expected of 0.21 dollar to 0.25 dollar per diluted share, a decrease from previous guidance of 0.14 dollar to 0.21 dollar per diluted share), assuming a normal tax rate of 40 percent.
Picture:Destination XL website