DLTH - Earnings call transcript Q1 2018

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Operator

Good morning and welcome to the Duluth Holdings First Quarter 2018 Earnings Conference Call. [Operator Instructions] Please also note that today's event is being recorded. At this time, I would like to turn the conference over to Donni Case, Investor Relations for Duluth Holdings. Please go ahead.

Donni Case

Thank you, Jamie and welcome to today's call to discuss Duluth Trading's first quarter 2018 financial results.

we website morning, Releases. at which our available release, Relations Investor ir.duluthtrading.com earnings issued is this on Our under Press am Officer. Stephanie Dave with here Executive I and Officer; Pugliese, Loretta, Chief Financial Chief today we On today's provide up will call, questions. call your will and to prepared the open remarks management then

and the to estimate, begin, include can which forward-looking like that phrases. use words comments as remind similar by such of we expect Before would on the anticipate, statements, be you I today's will identified call

call Forward-looking subject uncertainties projections, like or relied information. of call and turn future cause SEC the and predictions statements, These of to be from Stephanie? involve would forecasts goals, Please additional over filings statements. of Stephanie statements for Chief should estimates, results forward-looking materially I forward-looking by their as of to to date not events. nature, speak that, those Executive and upon assumptions; refer the as Officer expressed outcomes our Pugliese, actual Duluth the that Trading. are to to differ with and in risk this And could only conference

Stephanie Pugliese

by and spring the warmer delayed stores Donni, of of This conference grew of net to then February XX% now meet business quarter basis for a early when extent our increased growth weather profit retail of and fast activity grew to by customer April and latter In quarter. Retail to new expectations, [male] for our welcome and admirable particularly first shipping to year-over-year. of continued of sales our sales and XXXX which all quarter XX% to an XX% primarily still and supported fiscal in the to March, due strength categories cold a Women's in was [ph] sales by of delivered while purchase declined February men's in last Gross a due less XXrd product impacted the quarter a weather the with X% deliver a across with first sales $XXX buy clearance April the XX% impacted and XX largely revenue having months quarter stronger Direct first consecutive the part evident slowdown first the everyone our continued of call. increased growth quarter. did million you, weather experiencing our as decrease Thank not paced off year's marks dollar lesser points, goods. margin was to on by which compared the net basis in flat rate, sales year-over-year. quarter was XXX starting XXXX. March

last clearance lack remember end inventory. we to year at that You the due missed for may sales the season of opportunity of

In a all, throughout levels the quarter and were This we we some total May. of internal gross and of percent within first Year numbers our April line part were gross rate the momentum period profit overall clearance performed very improved inventory able create and as the was well core product our quarter's finished rate the early profit through more historical and in expectations. in as round quarter. with to

strength important established continue on controlling May than we the XXXX results to retail. be June less line in to uneven with direct acquired bottom demand were quarters variety Fly, in markets, That and strong this did I've the our expenses very this. expect With our transitions and quarter new What's business. our momentum to both quarter line that in [ph] first the to line. as results, As [Garden like doubled Company belt, quarter marketing indicated of is promoted channel our in have the catalog in full the top up begins sales women's. Dakota, will increasing that the launched and We men's Underneath categories into in products both in opened and on are growth retail Armachillo!, deliver May seasonal prior categories on more annual year. and top newly Key we reasons. Dry TV, than being good digital, Alaska, In to line are of detail are and pent-up average. financial said, to and in guidance accelerate a our XX% signs keep under bottom women's. accounts Shooter, fiscal new unfold. virtually before, perspective our saw store women's have Breeze Dave of the we has can sales West extended this of line] first plans. both and quarter we we for men's a our for and on see that our more campaigns spring sales across and of being all Fargo, North are for go we series a growth important year Furthermore, stores two The seeing throughout Anchorage, product summer XX% and were well customers compared performing through job

near drive our stated long-term both growth. initiatives Turning to now and to

into conviction. a omnichannel true We continue with move strong to environment

legacy of rightsizing a burdened not like advantage channel. issues competitive count wholesale position the taking with that store is rationalizing are or We

and experience an our model to customers will We of trading enhance in building brand. Duluth omnichannel will the to customer that continue base valuable invest attract new the

this goal. have vision will very clear We a we of how accomplish

to plan in First, we are stores our fiscal open XX XXXX. executing

stores quarter, in Springs, and Colorado West first and Lubbock in our we the Colorado; the Portland, In Coast addition Denton, added first store recently Texas, opened have to Oregon. two

deliver those Anchorage and larger orders to model. Greensboro, ability gross have You the faster areas XXXX space order our may additional consumer This enhances for store. customers strengthen our omnichannel new square to note average in These have of a that couple stores, specifically footage Carolina, North fulfillment. direct our than and stores geographic

to and direct outsized store see in ultimate and of stores expression presence new a sales out channel and our the market. immediately attracting trading of increasing brand allows growth twice prove single our market the that once penetration us annually with raising established continue increase in as the customers to then that they in continue awareness valuable to buyers and a store through importance are their The brand spend much is market the share We Duluth as who in buyers. of multi-channel retail

the see continue presence to in in and this functional our in will and we Second, focus to is women's untapped work wear we grow space. we an innovative, market continue market significant on There women's business. opportunity our comfortable

building through We TV marketing, of in are multiple and brand digital. awareness aspects efforts including enhanced

women barrier key ability our addition, have In instrumental retail is the in adopting products. breaking that down see, brand, the been to feel, and stores a to try-on

line] greater Duluth like apparel We comfortable are extended for all with product women When fall, more will new is built [Garden proportionately of her [ph] focused the features. and plus innovative a categories our that we in have with of Duluth these fit on sizes. launch and our range providing a with size category satisfying

system further without live pleased in Third, and we to our enhance management significant went XX I invest problems. to our on our for am order customers will technology presence. reduce that May will friction any that omnichannel report continue

opportunities omnichannel As across only buy gift store, inventory greater our programs. and launch cards a through channels efficiency ship online generate new will also and and sales real-time from in will our result, convenience, This our enhance flexibility customers this other year to offerings. stores, will we pickup with and benefit will returns visibility have and operational not it

weeks few will in ecommerce to will Our available start in platform mid-July. testing with a customers and internally our become employees

new experience. and ability and experience, more website personalize the a mobile, better Our desktop provide will content to flexible management increased tablet

the we present platform excited new period do as a state-of-the-art they our disruption before, anticipate are navigate a mentioned to site. As with of but we short customers ecommerce through

proof our and Finally, we continue high talent. retaining by caliber to will attracting Company future

are our functions organization. mobility development our succession We and key to within leadership programs upward expanding ensure in

an create our sense have a in a which at benefit on Our that of plan future these know profitability. ownership to greater all stock annual near-term our investments impact of the purchase Company. shareholders meeting recent and We employees to way our approved employees provides the attractive will

I is of conviction data and maximize high based competitive our that said target strategy and degree right omnichannel we on body strengths growing on of our a our growth accelerate However, a as presence. have to the earlier, timing is

financial turn our I Now, facility. to will details the call credit to results and over our new of Dave cover the

Dave Loretta

everyone. Thank and good Stephanie, you, morning,

X% the were sales million compared X.X% sales net our XX% revenues in increased to from me, sales with retail last and coming our channel For volume million flat are last markets segments sales sales physical $XXX the growth XX% to $XX of quarter direct excuse Shipping retail -- year, direct last $X.X sales growing to grew we opening of by sales both reported was growing growth stores direct year. up concentration X.X%. increasing and year. direct with retail a strategy customers, driven over markets to direct retail of Net to stores and and of continue we high see With XX% strong first the product million quarter, and $XX new. those million, first when

customer market quarter strategy up coming our we've to it from markets result, established XX innings this but our XXXX, are most XX fiscal will in XX a first opened high be of in topline grown our realize results year overall. May. omnichannel force in has We're to today which beginning growth in the in and the early and As includes XX X line the rates of stores growth the continue the with markets expansion distinct stores Since markets chain years, the plans. of in stores this driving

That segment direct direct up plans. quarter in to As the start with temporarily first XX growth is our mid total expected in weeks was fact, three back line over last Stephanie season; April during growth but slow first in weeks. the the the mentioned, a in than our was with in to spring in product the trend reversed softer and late overall sales May quarter slowed of X%

first sales the omnichannel higher either with of in long-term with was markets established This quarter that's our reinforces conviction markets strategy. In versus the slightly market or growth no a addition, store new in direct stores.

increase XXX XX basis was activity quarter a to point or Our XXX XX.X% million net sales from point to from margins increased expenses a basis point of of in administrative $XXX,XXX gross $XX.X decline XX% was to XX decline an decrease million higher sales. margin stores, mix, of expenses, administrative million in of to profit million and $XX.X clearance retail The general year. due in or the and direct point basis $XX.X general advertising point $XX.X selling to shipping reserves, expenses. due compared our basis to decline primarily to and compared $X.X and in $X.X marketing promotional in related expenses the million Selling, basis net cost This XX inventory and impact product rate and XX.X% shipping gross last first revenues. included million, and decline and

points of basis last to As XXX SG&A sales, to decreased net XX.X% a compared percentage expense XX.X% year.

first year. new our compared store quarter, expenses and million the stores in to two $X.X $X retail we prior During were million opened preopening the

of in expenses to most our during the opens. month reminder, and a As store the prior the incurred are month preopening

net XXX a from increase point sales. our sales, decline gain points XX.X%, points quarter As XX or new and sales primarily share percentage depreciation point marketing compared in of leverage to from compared growth center a to net increase basis leverage compared $X.XX to net sales last net due last expenses XXX retail web by planned income points from as due sales. $X.XX of reported decreased adoption of essentially per information in to percentage cost to cost and percentage to EBITDA due advertising catalog diluted standard increase loss personnel which of or of or and last increased of last cost the primarily decline the a in XXX of a sales basis due of net basis was expenses advertising business. million in diluted as year. year. is $XXX,XXX basis a of X.X% retail year, XX.X% XXX sales a of stores recognition offset a point net basis due and to $X.X to to in The Selling proportional and revenue year. XX.X% share technology catalog net We XX.X% The and was Adjusted last an to or retail sales, resulting television to administrative shipping $XXX,XXX flat coupled due costs expenses percentage a with spend of year. the decline in the compared XX.X% per distribution General loss higher as to primarily selling decrease at the of marketing million to of expense, the XX.X% higher the the increased points partially X.X% XXX compared additional to $X.X basis was net of net XXX basis

to to the or XX% quarter. on Inventories liquidity; we the into increase year-end due of new million higher our compared $XX of credit sheet at increased inventories inventory. with I ended to line $XX greater first almost which XX% products stores, due includes increased with Moving our shortly. in $XX.X end working $XX of prior to agreement our increase quarter our discuss the compared last in new million year the for reclassification to increase of due of the first million balance number million Approximately of $XX and outlet capital liability as credit was revolving half an million, net the a current to stores first which clearance to will coupled and Adjusted the quarter year.

new in with to Banc, entered five Fargo that the multi-bank's years in Duluth includes report I'm a our three increase of $XX $XX million and a joining million call, earnings loan first credit Harris to institution. May includes we to into last our a new Bank million BMO credit revolving This as our credit line KeyBanc, term for U.S. $XX continues facility. and XX capacity. line strategy $XXX capacity communicated lead additional of of growth borrowing includes with an we facility credit agreement million borrowing plan Wells agreement As flexible our new our of Bank replacing pleased on term is new and who credit lenders, indication The support

XXXX. keep to now financial fiscal guidance to XXXX in XXXX as Please our period is our compared a outlook. based on Turning in period mind, XX-week XX-week

XXXX sales. expected XXX,XXX square accounting net open to expect the XX XX% million The feet. year the reaffirming total and grow $XXX digits We between retail as compared our and in this sales adding are and for outlook approximately to for is direct $XXX mid-single with stores upto to expect we of million to be net XXXX segment gross we segment

margin rate over be increase of and We infrastructure expect in our investments to XX expenses to prior our making year flat year, full the selling, compared year points administrative basis and gross a expansion, and to general largely due the as retail percentage to last to net people. XXX we're sales

preopening million to XXXX in million our million to expect XXXX. $X.X full $X.X $X be We year compared to expenses

rate count expect this XXXX shares We be to $X.XX; $X.XX EPS share million and a a assumes of and tax between XX%. XX.X of

million and between We expect million. adjusted to $XX be $XX EBITDA

to the open shape are With automated the the the Operator? and our teams retail first phase I logistics, first platform a tool closing, a top As to centers In to necessary to omnichannel store are our this in to will invest issues third our And in our in technology the will new rates, to and year of time being a which the in on-track Stephanie deliver growth investments allow end-to-end good quarter our capacity our fulfillment value locations. series the the overhauls of XX on this to brand. distribution and questions. that, in support be before to full achieve May on live continue the stores will creating at running to deliver and finally, to allow work commitment assortment the went objectives. -- step network our strong, year expand the in management line and and any true In system. results cap planning making mentioned, call focused logic of replenish critical while without we significant new quarter a will inventory and are guidance inventory foundational teams value customer by system started and the in of up both our first fourth year, to that on quarter loan us the order forecasting same as the we starting

Operator

from [Operator Raymond Instructions] from Our first James. question today Wewer Dan comes

Dan Wewer

The Can happened what why us where guidance you margins quite quarters the fiscal XQ? is year basis rate? opportunity XXX rate of first points. gross experience see is going you the flat than -- different margin down gross to the a where different margin bit And than in going that were forward on remind quarter

Stephanie Pugliese

of that profit pay promotional and of good global and the promotion; XX% we is the that very set what of quarters, decline quarter a the give where the attention quarter finite news takes was saw quarter clearance was days the same kind and the a in the our order off last all profit is we gross impacted and winter was so take of specifically six the you of to things it that of whole of quarter. into to year. some of your weeks were first less of our To The That year then balance it the weeks last insights business of of the impacted the example. quarter, due close gross the end you business so rate, of the or were we promotion January in also through strategy first overall margin percent amount on portion than as we was for first happened see first that of of gross we it around one

in section or actually time year. business in past around the was equivalent and last end kind of places time better of segment of of gross that than profit that some getting So clearance winter

see seen next over you gross on we do far we as last -- will second net shipping we'll know to we pressure continue quarter pressure tend still the in that with rate, sales has more year, to at of business that now percent expecting still some rate a have our the particularly downward of the normalized if gross So point the decline so stores as have we're the to level we're profit over higher we've gross year, past. revenues, said, that gross articulated in to and in equivalent our product rate slightly critical mass on that than we've profit profit rate and our retail reached women's That profit stores freight sell we've a indirect. in men's price full seeing is some

that's year. So the some go where the we for the see offset through of we of balance as

And quarter-to-quarter give scenario year. slight we that full so that will the flat expect improvement us for

Dan Wewer

improvement a in the for quarter margin you're So fourth gross second, year-over-year? rate expecting third and slight the reported

Stephanie Pugliese

Yes. overall make that year, us see And quarter-to-quarter is the first bit so profit, than we're in said, as back quite the in fourth the small as terms gross remember that get some XX% quarter I we -- improvements will expecting a we're less we going, alone quarter keep of total of to can up flat. but to

Dan Wewer

-- now that Second -- making observation? growing you mature mature your markets? Minneapolis, assuming us markets remind question if and are as Chicago you markets I maybe can consider omnichannel that which how omnichannel can many markets are fast revenues as have twice the -- could but observation regards to I'm be up you direct X%

Dave Loretta

-- Minnesota, up even established Oshkosh Sure, area markets establishments, that's market, our with Iowa, our Madison and here Minneapolis of Falls is obviously we're Duluth, the area store, of Twin the and Des outlet Sioux that Milwaukee market one looking mature Wisconsin. and Moines, [indiscernible] Dan. Really store in sort are larger the more at Cities seven

XX period they we which more before entering those two-year class and get become the of are the into to their are those established and we than beginning consider would two-year more mature after established So stores the period of now.

Dan Wewer

it gap you during in where from growth and Do that they retail know provide they stores, are the the sales but been running? comps looks period looking results between positive. revenue have same-store the of not growth actually the accelerate will I retail number like at

Dave Loretta

running were coming they where year? this from period into the Dan,

Dan Wewer

the sales your in if or in at Yes, first XXXX? look way calculate accelerate you quarter what with you you the did achieved it line basically same-store in

Dave Loretta

in are base store in line year -- during they market the to traffic store in versus were first enter component year at the direct full traffic it's with the second fiscal of that where the They are XXXX, starting still the in because greatest their their growth are of is period stores year seeing year. that really stores more the

Operator

Davidson. comes next from Our D.A. Michael from question Kawamoto

Michael Kawamoto

So some being or just about did Can regions have the presence? previously new learned new physical stores not where any physical presence with a you some Northwest takeaways like you've in of since talk Pacific opened or things any you Alaska. you these markets in

Stephanie Pugliese

within we in those those just first of XX only but where so of opened in Anchorage really the Anchorage, similar the the the with particularly a business months. direct well has been in store in far. exceeded very surrounding or that We're so, we've in particularly we chord has think store Portland. us. specifically a their a side our in Portland results been received actually deceleration well stores remind obviously but So have expectations in in pleased and the our said, terms very anchorage very are in direct Alaskan positive I for seeing folks, in on reaction hit first gear we couple everybody that with very we've just store to very quarter shops, That first these reaction the do months hard been market see overall doing just also consistent have of

Michael Kawamoto

revenues shipping XX% this that be And last said expectations expectation? year, for think then, down the still the is I had call the you to for you on

Dave Loretta

Yes.

because quarter. any XX% of less see balance year-over-year we is forecasting. And but going really prior XX% slip, year we to the see think than without the able to first that pre-shipping were would the we're to real fourth quarter The what the most that offers of some is the were conservatively flat be of same that year impact

Operator

from from comes Jonathan question next Our Komp Baird.

Jonathan Komp

wanted also, I was on just the detail start I about that. inventory just to -- the and reserve hoping ex-retail, following on-hand? around specifically you that growth then by of Dave, kind any and And more highlighted of that within anymore ask see inventory I you inventory inventory a need risks the that pretty up know color to to take and kind mid-teen remaining

Dave Loretta

unrelated The what's increases inventory a be we being the to down shrink new retail into continues function increasing is of with a from on-hand and stores driving inventory is that really and year channel The higher [ph] Sure. came reserve reflection inventory quarter. that. this over of standpoint to of second growth that the of course a the and growth -- worked what's the rate the within first

but orders of the for are year in this last the were growth reserve is today year of the that for that slow half we back put function of put store see and a place back retail and in those latter have simply the that -- we part that's inventory half into of realized base. where growing year, the it's orders in the So we we'll the inventory, levels so presence

Stephanie Pugliese

And add overall the of inventory. overall the complexion of the just rate I would on

round that and year. higher We we year product have than -- percentage more had is it core last of

managing and we out into assortment and quarter, visibility more are now are numbers go-forward of large quarter on tool planning of the more are and and and inventory first have that in higher us But we putting I obviously risk some coming So will of place while back quite we line that of aligned think in give to that flexibility was stores. the inventory we inventory our is the our than pockets across we in going fiscal want terms reasons of think it's one of risks get don't go-forward. and us excited as be to of including XXXX year it for new inventory, so locations complexion margin many the came inventory that those to out about issues first clearance last low, any we

Jonathan Komp

you And on year, little looked And then, different the but year to then for as the the implementation, granularity takes, maybe but I more and but when maybe like about despite sounds QX about how both thinking you the for you a I how ecommerce was thinking know a shifts decent growth? topic color think on accelerated opportunity quarter element of that. and hoping year? any of growth it back direct from puts of you've more growth think pretty mid-single-digit sales you're last also on disruption the about about a quarter-to-quarter kind like some you're the hear reiterated there the any direct

Stephanie Pugliese

Sure.

the quarter entire have second last So on will on decelerated renormalize clipped so you the far quarter. really direct we -- April of spring, the from what those spring if will growth just you that's us of which seen selling the weeks if three the goods and

in in XX second if quarter, that we at kind X% of remarks, mid-single-digit normalization first into a weeks sight, rate in direct. of period come growth a were into new of search the the platform quarter while are back our six impact have order have management links into ecommerce we as of seeing overall. growth to built the mentioned we platform system to both, first make, -- out well his a live, of getting the where are with terms expected that to will Dave while conversion at terms fine-tuning has about will As the short the used We're might we we you look that for transition what bring ecommerce -- in and that to platform slow as customers some traffic of rates and the etcetera an the of we're expectations the look of it. When expectation weeks that is do -- going direct some four the our to deceleration lot

later know, bit will go upside end growth of make the of and quarter the have I terms we in quarter And mentioned, the third media that a that things seen overall. upside probably in of very in we and around beginning fourth expectations front. those you to weeks before increasing of tune, first direct ecommerce but we'll we've as of that get little then in see impact fine some of really to into on quarter. quantifiable We of quarter as into on there So platform, want fairly we conservative most the terms third we to speak the some been six sure four

Jonathan Komp

me; broadly, a little women's and men's that you women's just the of be or there in element a strong, you that would at looking growth look restart to but to your helpful of weather had share bit. -- any rate one if very efforts kind stayed focus initiatives just well. for slowed of Last internally there men's, as at there reinvigorate of It wondering degree has is kind like and men's to had when that growth sounds specific terms

Stephanie Pugliese

Sure.

around On grouping; a the the actually product -- underwear just Shooter. weeks kind we're of ago there. new launched couple men's Breeze into product on our fall, by is introductions weeks that product launching side, specifically, we which be we Product in of quarter go a type campaign our a I of And men's one new will launched advertising in new focused have very a customers. for key couple second that group season-less we just product of couple think a as with of of transitional we well received groups

the closet our those of greater out we of opportunity because as past talked social base. and Alaskan aspects outreach in built we think business at on hard as to is digital In about gear both kind addition, if some But in our in to to even our expand long-term better for specific you well were we've we're have customers his building do of our our as put that look offering men. continue we've that positioning, and presence whether marketing place drive we to media, traffic to increasing marketing store that

Operator

Our Duffy from Jim next Stifel. question comes from

Jim Duffy

May with First from in curious, I'm the the question management on expenses see any order of you the the onboarding and/or implementation. that tracking systems consequence plan? revenue system did to associated

Stephanie Pugliese

that we impacted with did either any pleased have way not negative revenue revenue the the implementation. based issues. quite issues large impact or We a any customer fact on that see with significant didn't were We

operating will we're Phase couple with get pleased and quite it now if Right the be a employee kind launching in -- with of the about so kind weeks are of in legacy pieces great and X, place system base. get all just our ecommerce we're platform, So excited that our and ecommerce of to going. of those order we new of would synergies on management those you

management that we're In on-track the to technology, terms expenses terms overall and year. of expected of for order we the what this spend the in system of

Jim Duffy

Jonathan's question, to have in And associated on based direct platform, slowdown like seems your that of the it guidance -- is plans business then the you accurate? some the in ecommerce response onboarding with

Stephanie Pugliese

Yes.

Jim Duffy

you Dave, thinking usage are the cash of quarter of project this at credit do terms line in you where just flow for in liquidity; looking what and third year?

Dave Loretta

million, $XX The might million $XX third line balance balance so it's peak in the a the to projected year that have to at a total of by be elevated to of about at of We'll a credit from of -- $XX end of likely is quarters term million but sort balance standpoint. last and $XX be similar fiscal period end the million. the year on the portion sheet to

credit facility that's to the balance feature, the the end and and the the so slightly reason some will the a coming out allow on and credit on spend stores in As technology take for fixed part for given flows was permanent the line rate at the short-term. -- projects more portion to year. least of us year a debt XX of nature, of cash the negative year be This at of assign it would nature of that the this

Jim Duffy

regulation understand respect directionally with me help carrying you of recognition so? for a can was if our catalog expense; us I Dave, impact change one the even to of there that just through Last think quarterly

Dave Loretta

Yes, sure. second shifting are within from one $X and to first in the roughly quarter next. quarters The impact million the

the basically where third the quarter it's demand three four recognizing and a have it that's to fourth the catalogs $X at that versus reflection third the would we a have quarter we would biggest did the catalog as in had This quarter regard time months. expensed change the be curve being expense but in into but pulled the of year in last over that mail quarter, million expense our a benefit would that of

million expense expect So be quarter, really is so to added roughly to amount. fourth that's fourth is see from going pulled third of quarter where but we $X the being quarter in that would by the reduced

Operator

[Operator next Blair. Instructions] Our Carden question comes from William Dylan from

Dylan Carden

newer I that a of seeing that right? in these you're the stores; two-plus about do sounds market year what to direct kind growing is double like some of if the standpoint? on guess I sort and remarks now than X% as the clarify, are year It have of so, revenue. direct lapping then established talking old legacy wanted I you're And omnichannel the you more locations from prepared

Stephanie Pugliese

We two-year that that though, that as kind half are a for little -- of example, year markets We an faster, a we strong a little had market are an Overall a the example consider what very Dylan two-year mark, Chicago accelerating some you mark. they coming I quarter do to a into side. established we some we and closer that our direct the bit can see are markets are on markets are store using market. accelerating that that bit mark -- have give

the mark, indications So was once than XX we obviously established aggregate in to in in to that and reaccelerate. but the -- more mid-XXXX some it's that this that they there they with XX basically -- of stores that double-digits. them noise again, a growth are perform months on-par last in that seeing hit last seeing starting in we're that company But is those two-year of rate double quarter the bit opened are little of

with pleased very we're So that.

Dylan Carden

of the I seen there -- on strategy is new less then stores or far? I rollout these to or or thought or guess adjusting more and to you thus is more where start -- of as stores how sort it of what question. you kind And change any these or we've open Are the stores, you stores open guess is the

Stephanie Pugliese

to continuing whole lot and but markets there brand. them, look overlaying have not at, that the and customers are looking with where high where principles specifically in the filters have like are that where use our a our concentrations yet of We are that what are dilutive experienced direct we customers foundational people we're

So not has and that's changed. foremost first and that

visibility, and our still access much very in that also roads, high look of locations traffic high We stores. for out there to is the customers for have very easy closer that come

not said nice we're prototype synergies. to would flexibility. we have part had We have other look have strong adjacency continue near the for terms that we're Home for new evolution restrictions where say you real have when that for I we those have example, Kabala's, Depot additional buildings, near although I biggest a we've -- in been we gives Home will that's a to that is the or I it would added so that but stores, have customers specific some and are -- that areas of similar closer build-to-suit if height our of finding store in But us to on a attract got flexibility stores, we say prototype that stores adjacencies that or like a our Depot few our example,

hard changing of assortment gear our to more we're stores We those core any than some strengthen are the how Alaskan -- we them of do types have shops that and that of to in sub-brand presence add premise. and the internal those learning that of added things with the build

Dylan Carden

there Shipping hopeful they in a that of even just guess probably allowed you you and guess item? do what drag. and as to more. that I much the going too on particular more of more And less early of to of look actually I it's stability or sort kind kind like call quarter but thresholds, are improved one forward

Stephanie Pugliese

the that saw free quarter where up all year. we of revenues significant drop against year first year, -- in increase were over last is it shipping significant of we piece a last a think biggest that of prior obviously and had we I a

did the have past four-five So this we past or quarters stability so. see certainly more we than quarter in seen

stable? where last that from we free up In there Yes, we is a expectations year. it chance we stay terms into that our of free our That there because really the building is one yet. belt against are shipping just we're know know headwind with so place see Is I still quarter what for of more don't shipping, under lot we've go-forward, around forecast could go-forward. stable -- that said, and the a know that

Operator

time questions. I'm conference like additional to back [Operator Stephanie Instructions] over no closing turn And call ladies any for showing this and to I'd the Pugliese remarks. gentlemen, at

Stephanie Pugliese

our you We call. you upcoming today's look conferences. seeing for Thank of to some everyone forward joining in June

Operator

presentation. the now today's and you thank has for do attending conference Ladies gentlemen, concluded. We

You may lines. now disconnect your

Duluth (DLTH) 5 Jun 182018 Q1 Earnings call transcript