Duluth (DLTH) Q1 2026 earnings summary

Executive summary

• Net sales declined 12% year-over-year to $102.7 million for Q1 2025, with a net loss of $15.3 million and adjusted net loss of $10.8 million, primarily due to lower web traffic and reduced promotional activity.

• Adjusted EBITDA decreased to ($3.8) million from $1.8 million year-over-year, representing (3.7%) of net sales.

• New CEO Stephanie Pugliese is implementing business simplification, cost structure right-sizing, and a renewed focus on brand awareness, product innovation, and customer service.

• Expense savings initiatives targeting $15 million in annualized savings have been launched to align the business with current market realities.

• Direct-to-factory sourcing, fulfillment network optimization, and store portfolio review are underway to drive cost and efficiency gains.

Financial highlights

• Gross profit margin declined 80 bps year-over-year to 52.0%, mainly due to clearance and discounting, but improved over 300 bps in March/April from sourcing and promotional resets.

• Adjusted EPS was ($0.32), with $4.5 million in adjustments, compared to ($0.20) in the prior year quarter.

• SG&A spend was $65.7 million (adjusted $65.2 million), down 6.9% year-over-year, but deleveraged to 64.0% of net sales due to lower revenue.

• Cash and equivalents at $8.6 million; $64 million drawn on credit facility; net liquidity $44.6 million.

• Inventory at $176.1 million, up 29% year-over-year, with 91% current and 9% clearance mix.

Outlook and guidance

• Fiscal 2025 guidance is maintained, with adjusted EBITDA expected in the range of $20–$25 million.

• Management expects capital expenditures of approximately $17 million in fiscal 2025, focused on logistics, IT, and store investments.

• Store portfolio optimization ongoing, with closures, remodels, and new openings planned.

• Additional $14 million in product costs expected from new tariffs; minimal China exposure (<1% of receipts).

• Inventory levels expected to normalize and end the year down double digits versus prior year.