Menswear retailer swings to loss in Q1
Destination XL Group Inc. posted disappointed earnings and sales in its first quarter, but sounded a confident note that it was back on track.
In its quarterly earnings release, the big-and-tall apparel retailer also refuted a recent report, which it said had been repeated by various media outlets, that called into question the company’s ability to repay its debt.
“This report inaccurately assesses our financial position and business outlook,” said Destination XL president and CEO David Levin. “We ended fiscal 2016 with over $57.0 million of unused, excess availability under our credit facility and a Debt to EBITDA ratio of 2.0x. We remain on track to generate free cash flow of $15 to $20 million which will be used to repay our debt and repurchase our shares in the open market.”
The retailer reported a loss of $6.1 million for the quarter ended April 29, versus income of $0.2 million in the year-ago period. The company attributed the decline primarily to a combination of higher planned marketing costs related to its new television advertising campaign as well as lower gross margin dollar contribution due to occupancy de-leverage.
Revenue totaled $107.6 million, compared to $107.9 million in the prior-year quarter. Same-store sales fell 2.1%.
The company noted that its sales momentum has accelerated since the beginning of April.
“We experienced a challenging sales environment in February and March, but we anticipated a strong April with the launch of our spring advertising campaign on April 2,” Levin said. “Since the campaign launch, not only has our April performance exceeded our expectations with positive comp of 6.4%, the positive trend has continued in May. Our top priorities for fiscal 2017 are customer acquisition and retention, which we are fueling by reinvesting in marketing and in our digital capabilities.”
Amazon’s drone delivery efforts are for the birds
There’s more to drone-based deliveries than just dropping parcels — at least it is for Amazon.
The online giant is developing an air-traffic control system to manage its fleet of drones as they fly from warehouses to customers’ doors — a move that will ensure the devices don’t collide with “non-collaborative flying objects” during delivery, Bloomberg reported. These include buildings, trees, other drones and — the most unpredictable — birds.
In the report, Paul Misener, Amazon’s VP for global innovation policy and communications said, “Going from a warehouse to a customer’s location, a drone has to fly in the right direction, find it, but also avoid all the things along the way.”
The air-traffic software will be loaded onto the drones, allowing the devices to communicate risks with each other in real-time, as well as a central control center. The drones will also have integrated detailed maps that pinpoint static and temporary objects, and weather conditions. Drones will also be programmed with instructions on how to respond if they come near — or strike — a bird, according to the report.
Amazon created its own traffic control system after concluding current solutions don’t support large fleets of autonomous drones. The project is being lead by a new 12-person research and development team, which has expertise in aviation as well as machine learning and artificial intelligence. The group resides near Paris, the report said.
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Athleisure brand adds new tech lead
Lululemon has named a new chief technology officer.
According to a report in GeekWire, Julie Averill is joining the retailer as its new executive VP and chief technology officer. Currently, Averill is the CIO at REI.
Averill led REI’s technology strategy and IT operations for three years. She also spearheaded the company’s migration to the cloud, according to the report.
In the report, a Lululemon spokesperson said the company is “thrilled to welcome Julie Averill to the Lululemon team as executive VP and chief technology officer.”
Lululemon is expected to announce sales for its fiscal second quarter on June 1, after the market closes. Based on 15 analysts' forecasts, the consensus EPS forecast for the quarter is $0.28. The reported EPS for the same quarter last year was $0.3.
Averill is expected to stay in Seattle, according to GeekWire.