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04/05/2019

Duluth Trading sets store openings for fiscal 2019

Duluth Holdings Inc., which opened its first physical store in 2010, continues to expand its footprint.

The casual and workwear retailer on Friday reported a disappointing fourth quarter that missed Street forecasts and gave weak full-year guidance. But it sounded an upbeat note as it said it will continue to expand its omnichannel model in fiscal 2019 with the addition of 15 stores, more holistic efforts to engage customers across channels and the continuing expansion of its women’s business. The company ended the year with 46 stores.

“We will optimize the investments that we made this year by refining processes at our distribution center, the functionality of the order management systems and e-commerce platform, and our inventory planning system to improve productivity and results, said Stephanie Pugliese, CEO. “We will also continue to build our women’s business, Alaskan Hardgear and men’s base layers, which are significant and proven drivers of growth.”

Duluth reported net income of $20.8 million, or $0.64 per diluted share, for the quarter ended Feb. 3, compared to $19.5 million, or $0.60 per diluted share in the year-ago quarter, which had one extra week.

Net sales increased 15.0% to $250.5 million.

On the company’s earnings call, Pugliese said the chain experienced challenges with “systems implementation and late deliveries of product” in the quarter.

"As a result, we had inventory that was misaligned to the timing of sales and not distributed optimally throughout the network. This affected store productivity and added extra cost throughout the system, and some of our high-demand products didn't hit the market in time to reap the full benefit of the holiday season."

For the full year, net sales increased 20.5% to $568.1 million, compared to $471.4 million in the prior year, which had an extra week.