Duluth Holdings Inc. (NASDAQ:DLTH) reported third-quarter results on Tuesday that showed a smaller loss than expected, helping lift the retailer’s shares despite revenue coming in below market forecasts.
The workwear and casual clothing group saw its stock rise 6.39% in pre-market trading following the announcement.
For the quarter, Duluth posted an adjusted loss of $0.23 per share, beating analysts’ expectations for a loss of $0.46. Revenue totaled $114.9 million, slightly under the consensus estimate of $117.06 million and representing a 9.6% year-on-year decline. Even so, the company managed to expand its gross margin to 53.8% from 52.3% a year earlier, despite absorbing a $3 million impact from tariffs.
“I am proud of the team for delivering another quarter of improved profitability, continuing our discipline on promotional reset, managing expenses and inventory levels, and further streamlining operations,” said President and CEO Stephanie Pugliese.
Net loss for the quarter narrowed sharply to $10.1 million from $28.2 million in the same period last year. Selling, general and administrative expenses were cut by $11.6 million, or 14.1%, to $70.7 million. Inventory levels declined 17% compared with a year earlier, and the company reported net liquidity of $88.6 million.
Looking ahead, Duluth reaffirmed the upper end of its previously issued fiscal 2025 adjusted EBITDA guidance of $23 million to $25 million. It also revised its net sales outlook to a range of $555 million to $565 million, down from its earlier forecast of $570 million to $595 million.
On the sales mix, direct-to-consumer revenue fell 15.5% to $67.4 million, reflecting lower traffic, though this was partly offset by higher average order values. Meanwhile, net sales from retail stores edged up 0.4% to $47.4 million.