US brand Duluth Q3 2021 net sales jumps to $145.3 mn, raises outlook

The gross profit increased 17.8 per cent to $83.6 million (Q3 FY2020: $71.0 million). The significant increase in gross profit was driven by a higher mix of full price sales due to lower clearance inventory and successfully dialing back promotional activity.

Likewise, the operating income increased $2.0 million reaching to $4.9 million compared to $2.9 million in the prior year third quarter while the net income was $2.8 million, or $0.09 per diluted share, compared to net income of $0.9 million, or $0.03 per diluted share in the prior year third quarter.

“Our third quarter results reflect continued strength in customer demand for our core product offering and strong operating performance in the face of supply chain disruptions. Despite the congestion in the transportation networks, our business was able to maneuver and generate healthy sales growth of 7.2 per cent and net income growth of over 200 per cent, led by significant gross profit margin improvement. We are encouraged with the holiday selling trends to date and expect to end the year strong,” Sam Sato, president and chief executive officer of the company, said in a press release.

The net sales of retail store increased by 22.3 per cent to $60.1 million, a significant increase over last year’s third quarter when store traffic was adversely affected by the pandemic. The men’s apparel net sales growth increased 7.5 per cent driven by growth in year-round workwear, while women’s apparel net sales increased 5.6 per cent driven by strength in woven bottoms and flannels.

The company ended the quarter with a cash balance of approximately $20.4 million, an inventory balance of $165.1 million, net working capital of $89.9 million and no outstanding balance on its $150.0 million revolving senior credit facility.

Based on the quarter’s performance, the company updated its fiscal 2021 outlook. The raised outlook includes net sales in the range of $700 million to $715 million, adjusted EBITDA in the range of $73 million to $75 million, EPS in the range of $0.81 to $0.86 per diluted share and capital expenditures, inclusive of software hosting implementation costs of approximately $18 million.

Fibre2Fashion News Desk (DD)