DLTH - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to the Duluth Holdings Inc.

First Quarter 2023 Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Nitza McKee.

Nitza McKee

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

Our earnings release, which was issued this morning is available on our Investor Relations website at ir.duluthtrading.com under Press Releases. Sam Senior and Financial Vice with and Executive Officer. today Loretta, Dave President here Sato, Chief President Officer; I’m and Chief we On remarks to will management question. will then your today's call open provide the call, and prepared

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

are subject XX-K goals, upon SEC These outcomes other future report predictions Forward-looking to, and recent uncertainties most Officer. statements limited those those President this not filings forecasts as involve could forward-looking the and that and Form projections, Sam? their to relied the but Such statements. annual our Chief statements Executive from events. And or risk forward-looking that, over by call turn and to that date on cause be as nature estimates, Sato, applicable. materially conference not expressed results of the Sam of only are uncertainties in are call speak I'll in to include, risks of and with assumptions should actual differ as and described and

Samuel Sato

positions demand greater quarter our and capital. to increased several the positive customers on joining strategic We're for progress collections the growth good in summer last today's inventory for increase trend Fiscal with in including Thank in-stock a year, you total our fourth and quarter, overall net start reversals the making from results, pleased initiatives. first business efficiency that to sales call. and reflecting that the in share quarter spring demand several working business fulfilling great from off is strong and we're for driving are better XXXX the an

remain and conservative platform to still strategies planning in near-term announced Duluth to in sensitivity, lifestyle align Duluth Big outlined growth goals Duluth go-to-market AKHG we weigh objective, long-term was XXXX durable strategies our consumer a to customers' currents achieve year of economic of rebranding our of our serving and provides committed for to Trading needs as cross that the to focused we the Company our is our on business Blueprint functional X expect While flexibility Dam cases. wear. use on we distinct build by sub-brands. It with customers can-do ago work for our the price

hands customers are calloused fixers and and character. believe target Our fingernails tinkerers fine-tuners, build who that dirty

continued and brand our outdoor recreation for grind part and us. AKHG and represents who growth experiences of customers for year worth in the of XX% example which of collection category in a like is These This across outdoor they work experiences. adventure. up to has long-term those free time outside live each and and their size gear. year the who to compared as expand and we planting our dig great to apparel serving breadth category to nearly garden, was outdoor the is folks quarter A be our the build both it landscaping invest believe in in first is last in makes healthy it

to tends ends. self-service start fun them, For where reliable

quarter. the details to Since share positive performance, growth has AKHG XX% last tremendous customers. along men's response a addition and from from also first our women's launch AKHG, product women's, we sub-brand share to up I'll year's I'm excited continue collection seen but of year's spring last overall by of more our regarding the see that was shortly with recent

crossover in business and categories brand sharing increase net who sales underpenetrated loss recent where our $XXX.X look more categories with acquire a provided We're year don't have first expertise participate. categories and $X.XX similarities adjusted opportunities plans with to the with within we call. we $X.X from EBITDA us incremental customers some leverage platform of move of Additionally, for adjacent, rather and develop see last with per are, develop But we not keep brands potentially quarter now opportunities about touch and results. Today, share far were an current I'll that we of million. our currently are the results when the reported going in nearly million, right. growth net in to and our brand full new forward These of or track AKHG. line acquisitions positive outlook time X%, into that our Duluth we on or our on We through is stray on underdeveloped to either

roughly levels from inventory last X% same the period and X% Our ended quarter. from fourth the the down year down quarter

our plan well-positioned resulted appropriately to efforts disciplined year-round in and goods. purchase has receipt clearance seasonal inventory and flow mix Our of a

we macro Given consumers are high persistent inflation rates, seeing are as the purchases. and discretionary consumers higher their pressures facing price with remain and selective in sensitivity interest basket

X% as of teams growth last our Dave evidenced serving and our results, strong share executing our financial the strong like our I'd details remained our brand commend unit our to level. continuing plans nimble to of be will on underpinnings by focused the over on further customers but for year. at highest However, sales and

with to several starts Our importantly, took, we innovative most quarter in demand be the trend actions improvements can this new products. but it attributed

our see we products. to new fabrications and expand love technologies that already into when success customers We proven continue

formulation. Also conversion our base simultaneously to our waistband features features analytics, active sales special across the season reactivating cooler promotional was relevant. sun. In going effective from Fly designed collection new away the Collection These Zone long the media keeps shirt sports-heavy drive we're our X-week We collection results design for elastic our XX tops on period. the room in Fire the features and work sleeve garden category, and strong women. AKHG for for odorless call in up in technology strong our saw gusset while customer was under in increase visits, and benefits We the that XX-inch originally a our Madness address the a holistic the size marketing we data #X a great a durable to get DuluthFlex purpose leveraged allows awareness of the of when in cargo during annual finish under and need short a new quarter. are Like cooling or with media hot wicking spike that to impressions Days and ease customers, we seasonal generated have Most engagement generating and sweating material, and new With awareness the events lightweight tactics them stretching Lake feedback on the to who levels positive Hose for greater to built-in and lapsed DNA. coverage to the protecting plus Do the sun collection women contributing for also customers' you're keeps men line an customers extra and and on linear our this Madness. We to retention dry and provide on landscape overalls, to event, flex been TV of shorts and pants channels Armachillo the The hole a with or cotton, March and men's new underwear, the with with bugs for tops guys college water, is hike Duluth's of and a features, our our were fabrication insect-repelling And CoolMax amplifying plus campaign, splash buyers These particularly streaming under priced in on our our we key materials new in infuse extending based wicking content Duluth with for the with and lounging product hero high skin range, job. for be because combined provide buyers on points and to than beach across capitalize at of significant first to combined features solve hot lightweight in the adding offering innovative buyers it's jacks, when a swimming awareness was by focus twisting the last extra an this the UPF our serving innovate UPF categories. With our followed quarter Our demand fabric with along suspect and fabric protection offering March new protection a younger still web umbrella. We'll that increased sun. reviews bonus introduce to It placements select and to men around we the All create standard basketball call serve offering. conversion. Lost influencers to inseam, Sunperior of positioned products pivoted lower featuring and interactions as seasonally affinity Swimwear attributes that and job. To new positive spend call-outs for extra convenience on action national flexibility to trend new the multiple the current drive sports-related funnel as are broader categories. shared and continue with sun which brand customers No and problem the

consumers ads enticed TV, analytic to building versus segmentation convert needed. Our healthy keys they ads retained social attract, where investments buyers. marketing on affinities. Enabling media streaming in and through where investment and personalized text our action strives sees compelling then through approach based with our on behaviors modernizing a capabilities data the recommendations and and or strategy When they're content strategy understanding to on and is what multi-level the research mix search advertising new online, consumer product retargeting consumers. requires consumer or they notice and are given Therefore, buy a optimizing paid to architecture inform of reason anchored to return of are an and social media a their take this a the on that our email, is online or and

a consumer conversion the resulting is experience replatforming positive rate contributing Our undertook last friction-free in focus points, sales we of basis Duluth over XX expectations a against for X.X%. fall The a remains experience on customers' fast, us. of website higher for nearly to website growth delivering direct

easier. the enhance making to through site year shopping the We to of continue have balance even our plans with us experience

personalized more imagery search product For it functionality. with our into making advanced example, function, we to incorporated and management result the plan search improve

the quarter, close elevating include expanded ability of durability. Traffic use and down to customer compelling to product deeper mid-single-digits that service an and down with a training remained Additionally, contributed during basis we highlight challenged and innovation selling are channel retail to pages the in being in Tightened conversion control. That units and video stores photography their tell the stories per focusing metrics the sales year-over-year. transaction drove to X% quarter. shopper our efforts net on in retail during product product our improving knowledge what's to by said, and on product XXX increase point increase our

insight continue St. on provide to We stores the the growing store greater that gain Charles, the space the last test our retrofitted to and Missouri women's store floor of for division. fall initiated were XX remodel with

Future future model for trend Store that new in has positive St. to serve openings. the and Our of design a store store's remodels will and Charles contributed as

to date. up to to we're Lastly, over the fulfillment the next months direct center square sites investment on customers' making customers investment in servicing budget. confident ramp marketing of the and XXX,XXX new to orders us health analytics. with and cut-through through representing and are while Expanding peak to center will by the to processing address goal work excited brand of continuing on data the with efficient customer facility our and actions fulfillment Adairsville, needs experience that's positioning that remains automation our pleased on the XX% pipeline, Georgia over logistics, through the We're invest season. I'm well deeper our new upcoming largest brands investments our lifestyle hiring product and few be innovation hands-on through during outdoor in the that of robotics informed platform begin progress our feet, our orders our business in of long-term single sound and attract With rigorous growth track to is for this most in largest report adventure. in our we're technology roughly and Southeast and

with goal measure involved. stakeholders informed ultimate being value are priorities by for increased Our all this the

over it more details results. provide turn Dave Dave? quarter I'll to first our Now on to

David Loretta

Thanks, Sam, good and morning.

$XXX.X X.X% XX to up direct of trends functionality year. of compared sales net reported speed slightly from our we was along non-store and our Sales last that quarter, points tactics, first the helped and our Online markets. to better X.X% For to million volume in-store in friction, marketing reduced versus markets combination conversion up from channel year devices the basis in efficiency. channel direct were million, desktop. A last across with conversion with quarter proven both $XXX.X website mobile increase up enhancements

was Our to our X.X% year. down fourth retail close XXX increase conversion compared is down in to to traffic the compared rate improvement from with last an last which trends points X.X% the an channel in traffic quarter basis store of and year, traffic

As on trend we we anticipated customers to sale last or priced. in sales with more below of full year, as responding was shared half on clearance call, last to of our year, our be mix the the price back last items

offset such, an retail As our unit year, increase but average by the down sold. units from in prior was

during earlier last quarter pull core with more as categories receipts and support well to year seasonal capture and to actions campaigns. make sales marketing offering both Our our impactful us flow the well the from key improve in positioned inventory than as

holistic many future shared, years development women of men collection build of As on this gained the in growth. continues earlier landscaping to that Sam and for our planting has a and and quarter category anchored traction gardening,

represents million as dollars This at items year. Mix the on a and to gross XX% price in gross and clearance profit gross year reflects million and XX.X% clearance. same sales on last first promotion year of compared last deeper from year. margin decline sold the lower items full of the quarter roughly profit X% on sold Our impacted was last mix $XX.X margins discounting was that to this price $XX.X

during through of total expensing The of quarter with lower the was the the was by move of clearance quarter greater first million gross units inventory, the partially and as $X.X discount of product However, freight order to representing a XXXX. in bucket finish offset percent degree margin expedited this planned. of the mid-single-digit

XXX gross was product down Excluding the charge, close expedited points margin freight year-over-year. to basis

quarter We to estimate basis year We that quarter as in last to will improve margin gross do the second as second the expect begin to sensitivity last product down much gross points period year. compared emerged. heightened customers the contraction in comp in the be total we XX to when margin profit as pricing

increased $XXX,XXX increase an Turning million included marketing and X.X% to $XX million SG&A expenses. for quarter and advertising to or an XX.X% $XXX,XXX and increase in sales. This last a general the to of million expenses decrease of $XX.X compared sales first year in of in of $X.X selling or expenses, administrative expenses. XX.X% of

a TV to orders year. XX percentage and increased last as points the and as An last marketing to the expenses points $XX.X X.X% fulfillment XX% XX.X% Selling We development million presence than a to $XX.X as in basis to to variable XX quarter operating labor shipped kept from offset direct a the compared percentage outbound compared and sales and national in with was later advertising of quarter of value. volume and creative greater total of higher which basis into store in will of reduction by order result during net percentage year center was flat average were support last lower to costs our costs costs, a the year streaming shift placements quarters. controlled compared more expenses sales costs of XX.X% a Madness to well asset variable a increase million decreased March sales. Advertising and shipping

of merchandising our engagement growing execution our robust. our in sharing the demand noted, and Sam customer remains As assortment marketing plans, for and

over which Dam new last during expenses the in flexible scheduled and of both objective for increase a enabling in net $XX.X represents center in personnel and that buyer Our time, Southeast quarter. customer the live strategy key the compared first younger cost a analytics fixed insights additional customer sales as $X.X administrative efforts quarter increases rates, as year XX.X% to were third expenses are data million and driving XX.X% $XX.X fulfillment of or and nimble or from file million well strategic is while to million last go our our is Blueprint. General year. depreciation a acquiring retention Big in and marketing more growth

We expect $X.XX for $X.X was Adjusted second sales Net in a last last deleverage was internal slightly sales quarter X.X% with similar compared X.X% quarter per and of of for higher the per first EBITDA versus $X.X million loss loss to share year. our or reasons. or million $X.XX share of line was expectations. in year our

including of quarter capital $X million, in balance line We to Moving with credit. the of and the million cash $XX $XXX on ended sheet. X working our outstanding million net

capital new in quarter it technology. peak expectations truly live $XX due in and customers' down is forward this from investment positions We're shopping represents the this capabilities warehouse outlays efficiencies center automated the us see as the to selling primarily and supply beginning as season the that to the and months fulfillment growing transformational coming million gain capabilities and project early in associated chain our balance a cash excited to advancement Our go with fulfillment speed for Southeast of operational year. moves our us accuracy as in online meeting management

XXXX Our we expended cash positive flow. quarter. nearly expect $XX total cash expectations, the plan approximately and flow end the remains capital free the million, the will capital with from which fund To at expenditure confirm half year the first we operations was cash our in for expenditures will of in year

year and Our the roughly the in planned. with as seasonal products the year-round down healthy of balance X/X products X/X is in quarter position ended from and X% period last inventory same a in mix

and for to the half million basis coming $XXX in expenses manage price of for down up net our entirely the to to points XX be million. of with as SG&A basket outlook. improvements Gross following basis the prudently year We leverage year full of are year. as confirming XXXX fourth net back fiscal reflecting be with coming margin in points, flat to profit $XXX our continue sales expenses the flat sales guidance with year continued to we a to percentage quarter. XX sensitivity Full

$XX cost from subscription Our $X.X on our due interest software including expected well lease $XXX,XXX year which credit and XXXX interest finance of have of on and start million macro borrowings are roughly adjusted of to liabilities rates. to are to Depreciation in interest remains million. includes $XX closing, of to higher achieving million $XX with expense, dynamic line environment. to expense, and increase of be we're $X.XX. In $X.XX goals costs, and expected pleased imputed the consumer our EBITDA as year Full what million confidence despite amortization to implementation annual last EPS as a

to while investing questions. weather our into foundation flow new future that, of still environment, positioned growing expansion, objectives enable we'll to costs with for brands customer adjacencies. And manage growth actions and Our have call and strategic the engagement inventory channels, well open customer setting brand the us and the platform extended to advancing for

Operator

Instructions] BTIG. question The with [Operator Stichter comes Janine first from

Ethan Saghi

Saghi morning. this have Janine Ethan on for You

First in of for in on the any what business acceleration could you're super half off, details first the give the helpful. of drove top That that, planning inventory more men's levels some what then details be would year? in give the the if second the more on us -- you just could you around quarter? on And

Samuel Sato

This is Sam.

Yes, quarter. prior pleased first trend we're men's from on take the improvement significant I'll business. the So with the part the

ending really We that. with QX, are men's, to double-digit pleased in slightly down a decrease compared but

spring reacting to We continue remarks, in summer and seeing particular, strength the strength consumers in I as my prepared of And pockets spring see as through And our said we've season. these chunk the What's well our offer. we're really across Fly, colors. to really big is interesting Dry fabrics to weight and seasonal year-round Armachillo, men's on He's responding lighter technical it on goods. fabrications Breezeshooter. of new the about is business like well gone a

more so him spend especially we to continuously or challenged. innovate have online, discretionary bring And store find to as and the is ways into

the he's we're that the progress of reception new acceleration and that to yes, introducing. pleased products with that in the business, really so and showing we're And particular,

David Loretta

back half address can question year. inventory of the I for the Ethan,

in on last were last we below So we about below first This levels track are year. with coming X%. quarter, year, inventory

start going we're mid-single-digits. the of even so end of QX kind that more to expect last of year QX XX% upwards And QX to decline and the then XX% at year. to continue to below and And in

able this the we're chain business adjust trends been good on year. we've flow we've and about So the to got inventory traction feel that that supply given

Ethan Saghi

And then me. one last quick for one

about the like And You sales seeing kind and talk the of of cautiousness quarter the you about consumer. the heightened that? quarter in now saw just you're talk highlighted just so the you're second what from in cadence things seeing Could first far? the cautiousness from consumer, you

David Loretta

Yes, sure.

began us for The February better first to March then started out in April. and and into soft quarter even improve in

that April brought business was that full the items time, So in and out looking slight we overall was customers period those what the continued of the top-line. garden we had pretty increase for But overall Sam throughout collection positive margin mentioned. in the swim quarter called the decent there triggered and that deal. But to the really that newness pressure in the

and innovation helped really pull period the positively. So newness

that's we're on. So trend the

Operator

Our comes with Jonathan next question Baird. Komp from

Jonathan Komp

you're the to And just behavior react then little or how sensitivity. current I want price and the sensitivity the Could you you're plan changes expand either environment store, a online, to you follow-up anticipate? specifically observing? the to do bit where the seeing any to comments around in you on

David Loretta

pricing, the is, most The part, the bit sensitivity board. Jon, across for to little a

little back in continuation that's of last a and from but think half really more bit a it men's is results, that I feeling -- those was reflective year. last

outcome on any when we've are don't I year-round. other and items particular better those categories point to can So those than an the categories more seasonally than really we item that is impact got pricing right, think

say, seasonal promotional kind of impact seeing where -- we're categories, the better that's when category. in year-round than it's I'd better So the

Samuel Sato

over for at strong. Unit is the the Sam. Jonathan, year X% versus up add of Demand that it we remains was is this look we our when growth believe ago. sales a I'd quarter underpinnings high. brand,

my AKHG brand, I nearly grew XX%. remarks, stated our XX%. up women's in Total As prepared

a basket we're Dave offer capture is the to there while yes, that to as so sensitivity continue when discretionary spend business. around price to of size, said, going And and some is right,

the Importantly, start we're talking we're growth, in last of top-line competitive, sales. At to relative to think going to of we to chase we time, the I of be past, at with to be that this is now same pressure planning do But not what bathwater, while growth because right speak. a in to but expense out about sales we're the our and not intend inventory a the but quarter doing and inventories. well we've bloated, been being inventory managed, And really X% are now. position profits. we're unprofitable planned, not a generating under to we're And a ago. throwing going is got purposely undue the we're well inventory stated balanced. is position, year just I've down inventories -- to so mindful good going not mix only our good really the how flow-through stock baby And the well as on but in compared We're

And so a we about price be to from strategic how perspective. we're and compete smart going

Jonathan Komp

the X it to XX% just want fiscal If by guidance implied ask it up for about Dave, to the guidance. I then in year. XX% full And the first, looks follow-ups. last just I range like revenue year the XXXX, to compare Maybe

First was X%. about up think quarter I

consider business product success here? And it model? the does we May April, innovation want the core Sam, along the talking you're some any or why new you're or So still on given of just about to on some acquisitions trends to understand just then just, the make the contributors into go sense complexity business, on adding based other there. I Is seeing to as confidence the your it

David Loretta

feel on this Jon, and that QX. or periods. guidance, each we'll see big say, we not QX certainly we're reflective in that gains prior I'd quarter QX any that forward. or relative that, going good guidance I about We're the play expecting mean, the quarter is to in out sales trend the on

touch be guidance. of I of to want expect annual acquisition, would within do know, us But Sam, range still that? terms to that in I So don't you the on

Samuel Sato

sure. Yes,

as to the us, types something to is be we is along of definitively acquisitions that not we and really as thinking for we're it's opportunities something grow are business, shared in suggest that those So strategic I infrastructure perspective that in from other do, think opportunities distribution This other about something going to are about past or said an discussions, that wholesale models. it but line. it's framework with our certainly with

We capabilities of framework have project that specific But we've identified purpose of think is some completed where pretty use I target we importantly, a acquisitions. would formal potential us us profile distribution that is the our Jonathan, and that or us the part strategy work brands sharing vet to build acquire that. of infrastructure into to new or have enablement channels to allow to to allow service enter new filters

certainly, that time arises but and that that. we're if about not to suggesting us it's something here a good it's time the thinking and do in it's positioning So near-term, ourselves the we're for

Jonathan Komp

And apologies, the comparison. on I may have misspoke

assume and the a full like you clarify, the trend guidance. in it looks deceleration David, would to major don't to your acceleration So or just get that -- year you

I clear, Just I'm misspoken? may so have since

David Loretta

right, Yes, Jon. right. That's that's

Operator

Our from Stifel. question comes next with Jim Duffy

Peter McGoldrick

purchase? Jim. to on you relative women's acquired I This or their wanted is customers start, about both heritage consumer? make-up just engagement, promotional size seeing in television How of your for talk basket Peter and sports the to frequency men's customer? Are difference newer is through could McGoldrick the Duluth you customers, younger the

Samuel Sato

Peter, Sam. Yes, is this

things I'll say. couple of a So

to Blueprint, is Big target our our our currently average customer XX old. versus in described north customer, we As Dam years XX of XX

consumer. there. target to being we're And in purposeful stated, success as that so And we're younger we seeing trying

new our of the under XX. of customers all age half were nearly in of fact, In acquired QX

and a growth, that half in want range, there. And it's And we customer need spend opportunity than somewhat was we his analytics is is women's buying customer nearly importantly. size our slightly is was a business somewhere women's count. our target our was It important that the is affirmed to that percentage perspective, consumer. From what because of The where for because us clothing. future just lower was female. younger lot our of So our of interesting really which total through she we of count it clear

her intention so think but to on focus starting our us, it's today. needs was And I dividends a good pay to not unlock only for

we're what is, offer this just she as of what we've to other her, of in female investments her, her, to places We specifically we seeing invest speaking is we've our so dividends to how us didn't results. her consumer. continued to expand And in our the made around breadth with versus really that attracted channels necessarily marketing in with we've our women's the some always to have shops. we're pay and shop compel of And to offer really stores see starting we're engaging

Peter McGoldrick

then question representing was business this volume on beyond? big and that your year do had today discussed business. brand? you an us driver aspirations? something a view this wholesale is one the Could wholesale in wasn't the I doors terms give And revenue as how this of on update and distribution How you And

Samuel Sato

for of and our that investment partnership. Tractor is is us intent in just still we're a our largely test of strategy. -- a learn phase. Supply It's kind for today as Wholesale a The to really target real infrastructure limited

to retail inventory us So will that, Adairsville accounts. that online, us are not that additionally to will store also be us service fulfillment allows fully allow automated an example, direct but distribute but consumers wholesale to needs, fulfill as with the be only center able to shopping our to

investments But components for the a brand that think we'll from strategic we against personnel, some the There's been of to wholesale. wholesale in is one the other our of house these well allow And really across significant a enable making opportunity is that to again, think invest like us we're back have to day purpose so of I perspective And the internally. has documented opportunity. team. infrastructure obviously

Operator

next Our from Blair. with question Dylan comes William Carden

Dylan Carden

utilization curious, of of sort is inform the that the center? outlook some through the target XX% the for being how for the margin of end of channel the kind that that handled kind does And year? Just capacity period, of of units for holiday direct your total

Samuel Sato

handle XX%. will of XX% demand, XX% up. greater The direct of fulfillment Yes, and that's our out than has Sam. is ramping Adairsville center this just we're as Dylan, capacity actually or it's sales Adairsville

And some will the even greater expensive more so fulfillment other to into fourth reduce the But of be for is built reflected -- of labor-driven quarter. that it the most largely demand and in that amount centers, CPUs XX%-some part, efficiencies. an obviously, us model, current the we capacity there's for in our as grows gain of is opportunity

Dylan Carden

from if wrong, of you quantified that. me? me correct doing the remind contribution And kind I benefits Can you've

David Loretta

Yes.

full year, this really to leverage basis the through estimated So end of we to XX once and again, and year, roughly that selling have expenses leverage operating could fourth points weighted. we go next points full capacity you our back period. basis basis at quarter year XX a of year But in on full XX

Dylan Carden

you concerned. both feel the initiatives drive around get But where against efficiency far comping as on harder and even of do are of from promotions comparisons far the of up of And on then promotions, efficiencies those kind maybe I sort kind meat you is kind bone continuing of costs? as to depth as as marketing are that

David Loretta

talking you're about Dylan, the costs, selling sorry, costs I'm or...

Dylan Carden

Yes, -- to I seems about journey I'm activity. rationalizing guess, promotional ongoing of there's it in kind an talking be

about that to pulling sense? Does kind of make then costs more how And rather activity? where look of more opportunity bottom being make you again, as more marketing, so feel on of more of targeted, or And normalized of the some the those of approach, that of you kind out sort reduce I some we are business? to period, guess, efficient funnel kind on a

Samuel Sato

Let Dylan, the Sam. is thing. this me promotional handle

as what of seeing QX. but hoped little 'XX, with would the and We see of QX a that QX us. had with we're promotional sensitivities price, a I kind stayed really into kind through around bit of in highly relief us that's out earlier, stayed has year coming said So after of

expecting into And in think activity. reduction that. start so we're you'll promotional We QX, you as and get now see QX a to

been have inventories For well. us, said really planned I earlier, as

has great our done a job team purchases planning Our our receipt of flow. and

extent perspective sales. and to from the inventory headwinds to to a And to certainly in price, chase a to certainly unprofitable sensitivities bloated be not position to remain promotional so address have got while we've on an to we're consumer their competitive relative

to price to in see and we basket and expect really QX continue promotional how we're so going purposeful our we And the from selective remain will we'll be and promotional that sensitivities highly cadence But activity. consumer.

David Loretta

on guess, Dylan, to flat and we'll up. there, the spend sales on points marketing XXX to the tack that slightly I to basis the around this Yes, question see close of leverage are year

of the last $X million on the nimble we're media because efficient full out on gotten allow of processes and dollars just There's And spend. a So less ad us digital spend side. that's the more that year. over linear TV TV $X we shift it continued for to upwards be of much been and million so savings to how consuming dramatic people seeing pulling have their of less cable some are is and upfront couple years of

that digital So the through we'll continue leverage side ad streaming and we found through spend to efficiencies on and accordingly. and

Samuel Sato

to add Dave's response. just Dylan, one I'll comment final

real the brand the and really spend. addition our our effect In to the leverage, is that marketing I on team around story having think efficiency is

And from a versus result awareness brand conversion a funnel all effort way it's long-term and creating in complex, holistic and tactical top it's health immediate conversion and tactics through balance tactics awareness the near-term of that brand so the sales. of

across basis pulling in us continues come are great allocating at that. they on our identifying but engaging still this they're their flex while about marketing, and and able allocation news television, dollars. The spend and single the job market to day, Every it's really consuming doing almost they're see and working great So doing and our different team they're a teams wire. on consumers to targeted, we're digital a our fragmented playing are look linear content of different with of highly levers daily as results digital, change where

So like drive team big where then opportunities ongoing in content to some I more that convert dialing in is they they're at And awareness, March term. just our near translate Madness, bets understanding those placing consume consumers think just saw we customers, our cases, and they're to also in. better getting but then

Dylan Carden

kind you're there's kind opportunities white going the that space as that offering within extension, the you're the know area I do given just how brand? some of extension? kind an need a Is of either far work on sort one remove you this And to acquisition category grow of look as maybe maybe of opportunity and of think as that competitive in extension, of focused speak more you the promotional seasonality at to just across to But positioning. of the sort don't internal much vertical or

Samuel Sato

we're absolutely. new of the teams as I lifeblood innovation new mean, we've are categories wear we in product where that talked, about currently specifically participate Yes, but are that. also product And acquisition and within Duluth, to thinking always either within an or work have servicing innovations consumer the -- is, expand the space is only our opportunities business. our the the always in, aside, not opportunity not

the business great silhouettes. to the expanded kind a is, in landscaping of with of part and surface. on that grow a we grow started gardening the scratching we're and just example reason category about a lot that we've is, to this similarly, into overall, this So for the different men's And And we're really number men's, We starting continues talked call believe of business. out landscaping that's us. the bib garden

great of collection. traction, So is to or categories the that example a it other team into categories, seeing product that's our category getting a genders starting expand that's other within

continues I really and opportunities the And is to it's perspective, about our yes, talked past, outdoor and as opportunity so within an big think we wear good work base have our adjacent acquisition a you be customer addressing consumers Duluth. brand. really as rec in just expanding From beyond for that there

Operator

attending you Thank well as presentation. our our as This question-and-answer session today's concludes call for for today.

now may disconnect. You

Duluth (DLTH) 1 Jun 232024 Q1 Earnings call transcript