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Highlights
- Duluth Trading reduced its quarterly net loss to USD 10.1 million, down from USD 28.2 million a year earlier.
- Gross margin increased to 53.8% of net sales despite a USD 3.0 million tariff impact.
- Inventory declined by USD 39.2 million, or 17.0%, compared with the prior year quarter.
Duluth Holdings Inc. (NASDAQ:DLTH), operating as Duluth Trading Company, reported its financial results for the fiscal third quarter ended November 2, 2025. The apparel and accessories retailer posted a narrower net loss compared with the same period last year, alongside changes in sales mix, margins, and expenses. The company also updated its fiscal 2025 outlook while maintaining its capital spending plans.
For the third quarter ended November 2, 2025, the company reported a net loss of USD 10.1 million, compared with a net loss of USD 28.2 million in the prior year period. The company posted reported earnings per share (EPS) loss of USD 0.29, while adjusted EPS showed a loss of USD 0.23 after excluding a USD 2.0 million tax valuation allowance.
Adjusted EBITDA increased by USD 5.5 million year over year to negative USD 0.7 million. The company ended the quarter with cash and cash equivalents of USD 8.2 million and total net liquidity of USD 88.6 million.
Sales Trends Across Channels
Net sales for the quarter declined by USD 12.2 million, or 9.6%, to USD 114.9 million, compared with USD 127.1 million in the third quarter of fiscal 2024. Direct-to-consumer net sales decreased 15.5% to USD 67.4 million, primarily due to lower traffic levels, partially offset by higher average order values.
Retail store net sales increased 0.4% to USD 47.4 million. This increase was attributed mainly to two new store openings and higher average order values across the store base.
Margins and Operating Expenses
Gross margin rose to 53.8% of net sales, compared with 52.3% in the same quarter last year, despite a USD 3.0 million tariff-related impact. The margin improvement was driven by higher average unit retail pricing from reduced promotional activity and lower product costs linked to the company’s direct-to-factory sourcing initiative.
Selling, general and administrative (SG&A) expenses decreased by USD 11.6 million, or 14.1%, to USD 70.7 million. As a percentage of net sales, SG&A declined to 61.5% from 64.8% in the prior year quarter. The change was mainly due to lower marketing spend and reductions in personnel and depreciation expenses.
Balance Sheet and Liquidity Position
At quarter end, Duluth Trading reported USD 51.1 million in net working capital and USD 44.6 million of outstanding borrowings under its USD 125.0 million asset-based lending facility. These figures resulted in total net liquidity of USD 88.6 million.
Updated Fiscal 2025 Outlook
For fiscal 2025, Duluth Trading affirmed the higher end of its adjusted EBITDA guidance, maintaining a range of USD 23 million to USD 25 million, compared with previous guidance of USD 20 million to USD 25 million. The company updated its net sales outlook to a range of USD 555 million to USD 565 million, down from its earlier projection of USD 570 million to USD 595 million. Capital expenditures are expected to remain at USD 17 million.
