Duluth Trading Q3 sales climb amid growing brick-and-mortar footprint
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.
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Strong November raises retailers’ hopes for holidays
Retail sales jumped in November as U.S. shoppers ramped up their spending as the crucial holiday season began.
Retail sales in November increased 0.9% over October on a seasonally adjusted basis and were up 6% year-over-year, according to the National Retail Federation. Online and other non-store sales increased 10.5% year-over-year. (The NRF numbers exclude automobiles, gasoline stations and restaurants.)
“This has been an impressive start to the holiday season, perhaps the best in the last few years,” NRF chief economist Jack Kleinhenz said. “The combination of job and wage gains, modest inflation and a heathy balance sheet along with elevated consumer confidence has led to solid holiday spending by American households.”
Craig Johnson, president of retail research and consulting firm Customer Growth Partners, noted that, for the first time in years, growing spending momentum is evident across all demographics, not just among upper income quintiles. His firm raised its holiday forecast from 4.3% growth to 5.6% growth, the best increase since 2005.
Holiday 2017 is poised to turn out better than many expected — and may well be a lot better,” Johnson said. “After years in hibernation, consumers are finally flexing their spending muscles.”
There were broad-based monthly increases in November across most sectors with the exception of general merchandise stores, which remained unchanged. November’s results indicate that retail sales for the holiday season – defined as November and December – are on track to meet or exceed NRF’s holiday sales forecast for an increase between 3.6% and 4% over last year.
• Online and other non-store sales were up 2.5% seasonally adjusted from October and up 10.5% unadjusted year-over-year.
• Electronics and appliance stores were up 2.1% seasonally adjusted over October and up 7.3% year-over-year unadjusted.
• Furniture and home furnishings stores were up 1.2% seasonally adjusted over October and up 8.6% year-over-year unadjusted.
• Building materials and garden supplies stores were also up 1.2% seasonally adjusted from October and up 11.2% year-over-year unadjusted.
• Sporting goods stores were up 0.9% seasonally adjusted over October and up 2.1% unadjusted year-over-year.
• Clothing and accessories stores were up 0.7% seasonally adjusted over October and up 4.9% year-over-year unadjusted.
• Health and personal care stores were up 0.4% seasonally adjusted over October and up 3.2% year-over-year unadjusted.
• Food and beverage stores were up 0.2% seasonally adjusted over October and up 3.7% year-over-year unadjusted.
• General merchandise stores were unchanged from October but up 4.4% year-over-year unadjusted.
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