Destination XL Q3 comparable sales improve 3.4 percent

For its third quarter, Destination XL Group, Inc. reported sales increase of 3.2 percent to 107.1 million dollars. The company said, increase of 3.4 million dollars in total sales was due to a comparable sales increase of 3.4 percent, an increase of 0.7 million dollars in non-comparable sales from DXL stores open less than 13 months, an increase of 0.3 million dollars in other revenue and a 0.7 million dollars shift in calendar weeks due to the 53rd week in fiscal 2017. These increases were partially offset by closed stores of 1.7 million dollars.

“This was our fourth consecutive quarter of solid performance and progress in our business. Our sales momentum from the fourth quarter of last year has continued through the spring, summer and fall selling seasons. We registered another quarter of meaningful earnings improvement, while successfully executing against our strategic initiatives,” said David Levin, the company’s President and Chief Executive Officer in a statement.

Destination XL manages to narrow Q3 net loss

For the third quarter, gross margin rate, inclusive of occupancy costs, was 44 percent compared to 43.2 percent for the third quarter of fiscal 2017, while net loss was 2 million dollars or 4 cents per diluted share compared with 5.7 million dollars or 12 cents per diluted share, for the third quarter of fiscal 2017. On a non-GAAP basis, the company added, adjusting for the restructuring and CEO transition costs of 0.7 million dollars in the third quarter, adjusted net loss per share, assuming a normalized tax rate of 26 percent, was 0.02 cents per diluted share, as compared to 0.09 cents per diluted share for the third quarter 2017. Adjusted EBITDA was 6.6 million dollars compared to 2.8 million dollars for the third quarter of fiscal 2017.

Based on our strong sales performance during the third quarter, the company is raising earnings guidance for fiscal 2018. Compared to fiscal 2017, total sales for the year are expected to be negatively impacted by one less week of sales and a net decrease in store count of 10 stores, worth approximately 5.3 million dollars in sales. Fiscal 2017 included a 53rd week, with sales of 6.9 million dollars and operating income of 1.6 million dollars.

The company expects full year sales of 470 million dollars to 474 million dollars, with a total comparable sales increase of 2.5 percent to 3.5 percent compared to previous guidance of 462 million dollars to 472 million dollars, with a total company comparable sales increase of approximately 1 percent to 3 percent. Gross margin rate is expected to be approximately 44.9 percent, an increase from previous guidance of 44.5 percent.

Net loss, on a GAAP basis is expected to be 9.8 to 12.8 million dollars or 20 cents to 26 cents per diluted share, an improvement from previous guidance of 13.2 to 18.2 million dollars or 27 cents to 37 cents per diluted share. Adjusted net loss is expected to range between 8 cents to 13 cents per diluted share, an improvement from previous guidance of 11 cents to 18 cents per diluted share. EBITDA adjusted for restructuring charges and CEO transition costs is expected to be between 24 million dollars to 27 million dollars, an increase from previous guidance of 20 million dollars to 25 million dollars.

Picture:Facebook/DXL Men's Apparel