Duluth Trading Co. posted mixed results for its third quarter as it continues to expand its store base.
The lifestyle retailer of men's and women's casual wear, workwear and accessories reported that net sales increased 25% to $83.7 million in the quarter ended October 29, compared to $67.0 million in the year-ago period. The increase was primarily attributable to an increase of 12 stores over the same period a year ago. It was the retailer's 31st consecutive quarter of increased net sales year-over-year.
The company reported a net loss of $0.8 million, or $0.03 per diluted share compared to net income of $0.5 million, or $0.01 per diluted share, in the prior-year third quarter, amid increased costs. It was Duluth's first loss since going public two years ago.
"Our 25% top line growth reflects our commitment to investing in our omnichannel model. We are growing our brand, attracting new customers, and the direct growth in our established store markets continues to perform well,” said Stephanie Pugliese, CEO of Duluth Trading.
The retailer, which started out as a catalog operation and then added e-commerce, opened 15 new stores in fiscal 2017, giving it a total of 31 locations, which is about double what it had at the beginning of the year. Stores generated 35% of the company's total revenue in the third quarter. To date, it has signed nine leases for store openings in 2018, including three locations in Texas and one in South Portland, Maine. More are expected.
"We continue to attract new customers through our retail stores and during the third quarter, new customers acquired through retail was up 81%," Pugliese said.
Duluth describes itself as a lifestyle brand for the modern, self-reliant American, offering high-quality, solution-based apparel for men and women who lead a hands-on lifestyle. Known for its quirky, fun advertisements and marketing, the company strives to offer customers an engaging and entertaining experience, online and in stores.