Destination XL Group (DXLG) investor relations material

Executive summary

• Q2 sales were $111.6 million, down 3.4% year-over-year, with comparable sales declining 3.5%.

• Adjusted EBITDA was $7.7 million (6.9% of sales), up from $4.7 million last year.

• Adjusted EPS was $0.05, up from $0.01 last year; net income improved to $2.0 million ($0.04 per diluted share) from a net loss of $0.3 million.

• Gross margin improved to 47.9%, aided by a $4.6 million tariff refund.

• The board withdrew support for the FullBeauty merger due to FullBeauty's deteriorating financials and increased risk.

Financial highlights

• Net sales: $111.6 million, down from $115.5 million year-over-year.

• Adjusted EBITDA: $7.7 million (6.9% margin) vs. $4.7 million (4.0% margin) prior year.

• Adjusted net income: $2.8 million ($0.05 per diluted share) vs. $0.7 million ($0.01 per share) prior year.

• Gross margin (including occupancy): 47.9%, up 270 bps, aided by a $4.6 million IEEPA tariff refund.

• Cash and investments: $20.1 million at quarter end, down from $33.5 million last year.

Outlook and guidance

• Management expects continued performance improvements for the remainder of the year, focusing on disciplined operations and execution.

• Store rationalization will have limited impact in 2026 but is expected to reduce costs from 2027 onward.

• Marketing costs for fiscal 2026 expected to be approximately 5.8% of sales.

• Capital expenditures for fiscal 2026 projected at $8.0–$10.0 million, primarily for technology and store maintenance.

• Focus remains on targeted growth initiatives and preserving working capital.