Duluth (DLTH) Q1 2027 earnings summary

Executive summary

• Net sales for Q1 2026 declined 4% year-over-year to $98.6 million, primarily due to lower direct-to-consumer sales, while retail store sales grew 3.3% on higher average order values and new store openings.

• Net loss narrowed to $10.0 million from $15.3 million year-over-year, reflecting improved gross margin and reduced SG&A expenses.

• Adjusted EBITDA improved to $2.6 million from negative $3.8 million in the prior year, a $6.4 million increase.

• Gross margin expanded by 540 basis points to 57.4% due to reduced promotions, improved product cost structure, and better sourcing.

• Inventory reduced by 24.8% year-over-year, supporting stronger liquidity and improved customer quality.

Financial highlights

• Gross profit increased 6.1% year-over-year to $56.6 million, with gross margin rising to 57.4% from 52.0%.

• SG&A expenses decreased by $3.4 million (5.2%) to $61.8 million, leveraging by 70 basis points.

• Adjusted EPS was ($0.20), excluding $2.7 million in impairment and $1.4 million in restructuring expenses.

• Net cash used in operating activities was $13.4 million, a significant improvement from $56.5 million in Q1 2025.

• Free cash flow improved by $42.6 million compared to the same period last year.

Outlook and guidance

• Affirmed full-year fiscal 2026 net sales guidance of $540–$560 million, a 1%–5% decline year-over-year due to continued promotional reset.

• Adjusted EBITDA guidance raised to $28–$32 million from $26–$30 million.

• Capital expenditure guidance maintained at $12 million (2.2% of sales).

• First half sales expected to decrease 6%–10%, stabilizing in the second half within a range of -2% to +2%.

• Management expects continued macroeconomic headwinds, including inflation and recessionary concerns.