Duluth Holdings Inc. (NASDAQ:DLTH) reported fourth-quarter results that beat analyst forecasts, although its revenue outlook for fiscal 2026 came in below Wall Street expectations. Despite the cautious guidance, the company’s shares rose about 6.9% in premarket trading following the announcement.
The workwear and casual apparel retailer posted adjusted earnings per share of $0.23 for the quarter ended February 1, 2026, exceeding the analyst consensus estimate of $0.15 by $0.08. Revenue totaled $215.9 million, ahead of the $210.65 million forecast but down 10.5% compared with $241.3 million in the same quarter a year earlier.
Gross margin improved sharply to 53.0%, up from 44.1% in the prior-year period—an increase of 890 basis points—even after absorbing a $7.6 million impact from tariffs. The margin expansion was driven by higher average selling prices resulting from reduced promotional activity, along with lower product costs tied to the company’s direct-to-factory sourcing strategy.
For fiscal 2026, Duluth expects revenue in the range of $540 million to $560 million. The midpoint of $550 million is below the analyst consensus estimate of $559.9 million. The company also projects adjusted EBITDA between $26 million and $30 million, with capital expenditures of roughly $12 million.
“I couldn’t be prouder of the team’s disciplined efforts in managing promotional resets, controlling expenses, streamlining operations, and optimizing inventory levels,” said President and CEO Stephanie Pugliese.
Duluth reported net income of $7.8 million for the quarter, representing a $13.4 million improvement compared with the net loss of $5.6 million recorded in the fourth quarter a year earlier. Inventory declined 21.1% year over year, while full-year free cash flow reached $16.6 million—an increase of $41.8 million compared with the prior year.
Direct-to-consumer net sales dropped 16.5% to $144.3 million due to lower customer traffic, while retail store net sales rose 4.7% to $71.6 million, supported by the opening of two new locations. At the end of the quarter, the company held $16.3 million in cash and reported total net liquidity of $141.3 million.