Duluth (DLTH) Q4 2025 earnings summary

Executive summary

• Fourth quarter net sales declined 1.8% year-over-year to $241.3 million; full-year net sales were $626.6 million, down from $646.7 million.

• Adjusted EBITDA for Q4 was $8.5 million; full-year adjusted EBITDA was $14.6 million, or 2.3% of net sales.

• Full-year net loss was $43.6 million (adjusted net loss $23.6 million); Q4 net loss was $5.6 million (adjusted net loss $1.5 million).

• Operational challenges at the legacy Belleville Fulfillment Center and promotional adjustments led to order backlogs and impacted Q4 results.

• CEO Sam Sato announced retirement effective April 25, 2025; Founder Stephen Schlecht to assume day-to-day operations.

Financial highlights

• Q4 net sales: $241.3 million, down 1.8% year-over-year; full-year sales: $626.6 million, down 3.1%.

• Q4 adjusted EPS loss: $0.04; reported EPS loss: $0.17; full-year adjusted EPS loss: $0.71; reported EPS loss: $1.31.

• Q4 gross margin contracted 410 bps to 44.1% due to 8.9% AUR decline; full-year gross margin 49.2%, down from 50.3%.

• Adjusted EBITDA: $8.5 million in Q4; $14.6 million for the year (2.3% of net sales).

• Year-end inventory up 32% to $166.5 million, with 90% in core/current products.

• Ended year debt-free with $103 million in liquidity and $3.3 million cash.

• Free cash flow for the year was negative $25.2 million, compared to negative $10.4 million in the prior year.

Outlook and guidance

• FY2025 net sales projected at $570–$595 million, reflecting macro uncertainty, promotional strategy changes, and store portfolio adjustments.

• FY2025 adjusted EBITDA expected between $20–$25 million, up 37.0% to 71.2% from FY2024.

• FY2025 net loss expected between $26.8 million and $21.5 million.

• Capital expenditures for FY2025 projected at ~$20 million, including technology and store investments.

• Inventory levels expected to normalize in H2 2025.