DLTH - Earnings call transcript Q2 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Duluth Holdings Second Quarter 2023 Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Nitza McKee. Please go ahead.

Nitza McKee

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

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

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

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

that, Chief over President call And Executive turn to Sato, Officer. Sam I'll with the Sam? and

Samuel Sato

joining call. for thanks and morning, Good today's

results, Before strategic X Blueprint. of share our initiatives to I'm I our that second review an our quarter Dam Big key to thrilled update on are cornerstones

is our has, partners cost team a date begun that is us news upgrade being planned, shortly, store exciting will significant to customers' more that thank our long-term October that this this located highly members share about all Georgia to this ramp-up The vendor efficiencies our automated our Adairsville, address Representing generate newest will for but operational and for future-proof scheduled and delivery faster support the key delivering on milestone. business, like our investment with start responsible I'll target gives first, fully customer as on our meaningful inventories. online and replenishing confidence over build achievable. center in I'll and network immediately time to time. fulfilling our orders expectations for growth, logistics I'd fulfillment

apparel to In have highly of and I'm functions to of efforts on develop deep sourcing our experience market product share in a manufacturing. center, with members going addition automated problem to and customers. several our excited products serve our growth a extensive that and team in our the equally and This bring that innovation accelerates the or innovative team to new live solve for onboarding purpose design fulfillment

and to our that meaningful of generating for sets product improving greater strategic growth. fueling savings over live augment price of highly cost Duluth pipeline a the center sub-brand long go long-term fun representing features track has market initiative, sourcing and while competitive selling The significant value profitable the This sustainable enhance first-to-market allowing with this products, the full and coupled bringing fulfillment strengthen team us customers, will a and stage memorable. speed loyalty to advantage, is automated cut-through new our supported proposition, by while marketing time. record fabrications price and of to strong our

were rates. continued turning visits, all consumer compared for the orders our online strong higher in and Now We to units spring current collections second demand our second counts more the as growth quarter for buyer healthy. summer offer evidenced Customer and quarter, shipped increased our and environment. year as to remains sold, last by with demand performance conversion in

on while what positioning. unique keenly we a can staying remains environment what sub-brand in prudently, focused navigate elevating seek to continue which we managing dynamic the business macro customers value, brand are control our As we and controlling

our and to levels year position and our quarter purchases the seasonal ended good due in inventory prior our sell-through below appropriately flow. and receipt efforts shape disciplined to plan is Importantly, strong

can quarter attributed pleased Total X.X% trended second for which were in flat in was grew and We're year positive last sales nearly down our which of beginning June. the performance, to to million, be in slightly by the strong lower the quarter. very subsequently X% month largely online $XXX May, by net store traffic which

with Importantly, customer our efforts our second and year-over-year, base. and improved assortments quarter both in-store marketing conversion rate online, as resonated broadening our

traffic, in on our XX% all for nearly were to direct and of quarter, up accounted Sales volume performance. for of roughly clicking devices Double by through transactions the website visits. of sales. channel Visits X% online XX% mall our high which driven mobile increased online accounts

on faster the of platform contributing increase XX rate. lifestyle's realize to representing Duluth. devices last that basis an model prove digital-first to conversion mobile on our continue expectations mobile our shopping XX% benefits of load web of total, increase and the our from basis our balanced points XXX our delivering in to direct continue points results from with an enables with We an customer service year, times navigation, omnichannel upgrade, is strategy channel which With easier

keys million EBITDA EPS quarter. down investments we longer-term chain unlocking the supply delivered bottom now of the results, and We P&L. and And growth. for with while fueling in line second Moving technology, the we're the profitable product innovation $X.X to adjusted not are satisfied are making

supports the in our end Our at of not $XXX operating credit second being at by million drivers flows. strength cash strategy key multiyear and no business the quarter on while with line to funded growth balance sheet our year-end expected drawings of invest

last inventories and our momentum that year. managed healthy support and have programs strategically minimize the is which have end-of-season clearance, position We a to below in

for our key I increase and delivered sales in garden like demand planning. These collections we XX% results nearly quarter. the As a collections great and in deliver and spring continue strong, to landscaping were of second collections and summer mentioned,

the Heirloom style Women's was Bib Our #X the for Gardening again Overall quarter.

during warmth months. to make ] we've to [ comfort cooler soft are a option product item, and which a designed plans Heirl lining year-round Our this with fleece add

represents sales collections but also the Garden, Our of increases Duluth which grew in total women's X% branded layer total base is gain Heirloom of AKHG business categories apparel collections. sauce combination XX% to a the is the secret utilizing product Success fabrications newer Women's Apparel almost a and into the across momentum. now strategic and being during business initiative our women's proven design, in in and unders like relevant our of segment, quarter, and outstanding derived Growing expansion continues with from uses. styles key

growth which TeeLUXE infused features nearly is wide great technology and newly seamless the with We're in response collection bra in quarter engineered seeing range and a soft-touch, and opportunity, women's support Made-in-the-Jade comfort, up represents elements. fabrics sizes. unique that significant and The from with a features XX% fits was of bra, comfort released Armachillo the all-around

interest continued the on demand lock recreation for structured collection, same saw provides design. the made year's for we -- and a outdoor notable we're point which durable in our success our last trails As offering. ultimate of pleased to women's and We AKHG, collection Stone lightweight the more endurance launch and see with access Run functionality

we're and AKHG programs. cozy introducing in [indiscernible] the soft new For cross-layer wear styles fall, and Bamboo

a similar and prints. we a the quarter, expanding significant colors XX% opportunity and back assortment continues seasonal also Overall, the the success fleece and use during sub-brand AKHG as linings our flannel our Duluth. half rate AKHG, which broadens growth second new in growth AKHG we expect grew within of We're shirts and for periods styles, long transition expand in our in represents Sherpa XXXX. of

you brand design their much draw Wayforger Wayforger our We Duluth page their to passion. of brands. our shape and helps so stories they our the and web and encourage inspiration live folks visit the work read embrace ideas imagery sharing to apparel as spirit the our of true offering from about they that I of help and the view enable family community, product play loyal that in love

and recent Ballroom washes combinations our in fits. Duluth pleased enthused demand Duluth introduction our and our to the winter colors Double are styles, pant, collections with and well early with new and the T We're Flex as favorable denim of which assortment the new as men's response about of core features Longtail increased for fall fits program particularly the

months. be to with for volume high this plans of fall a few driver support robust men's expect next us We marketing over the pants the

even transitioning sleeve which The button long off business utility with shirts, with twill, sharp Henley. between designed a We've and or polos styling start the called durability a more also combined customers, PowerCore, with the PowerCore that collection who pair office right is pants down to needs of recently addresses long the regularly. launched nylon the new back and to site sleeve balance new job a great strikes our Cardura abrasion-resistant casual are collection men's well

for to our fabric, in features we our This pipeline the strongest, year, Naked a our extensive Flex women's and New featuring photo still Year's including new most and collection of quarter. assortment hose, Underwear this date full innovative fourth new pattern in pant apparel resolutions. and be launching that new fabric smooth have products durable AKHG is a a addition includes more in a Fire to will soft allowing Excitingly, printing, launching fitness just January time Hose and several key for items that images, Buck carpenter fire new

women. printed We've for rolling men new underwear pattern also styles and out and been busy

and to Our data-driven brands combined are collaboration awareness. brand increased Product several is customer with and Blue dropping favorite beer collaborations retention September. Buck followed a with increase in with effectively customer strategies Naked rates being Pabst Pabst with up proving was additional Ribbon newness, marketing

year-to-date driven customers loyal our up retention much is prior most by year longer-term that Our basis XXX with rate on and of points customers.

digits, file orders Our driven mid-single and is overall up year-over-year up active purchase per is by increased buyer frequency. customer

ad acquisition channels, long. an all customers on trend social Within have spend quarter improving on been and paid XX% our the from customer new was over the return retained year up rate in

informed and gains back Our in shifts provides the efficiency marketing of and appropriate, strategy realize looking XXXX. when to half nimble we're

new of will focus powerful be be creators online New and new continue will customer and expanded sources influencers of reach acquisition to buyers. an content a

us newest in delivery remain and of This road a most is to track up we to cost mentioned as automated by XX% online represents and replenishment per efficiency highly the orders unit comments, a facility our strategic in center faster our my the our of within reductions process fulfillment of go processing help portion The the milestone Adairsville,Georgia fulfillment QX. base. this customer in customer I will greater store on healthy as our realize within opening largest new map. through to significant facility gains times direct efficient well of As live inventory end and network,

needs it and to customers' poised holiday the selling peak our demands as We're meet fulfill the towards season. builds

accelerating in inventory new of shape. innovation. Our We're product receipt great is

prepped a superior sharp Our marketing are plans to as are customer omnichannel our ever, service and as deliver teams experiences.

profitability. make, we've to customers and our positioned With and drive continue meet we're to made will long-term the critical sustainable of needs well the investments and growth

on we'll more our sharing to our third forward results provide details and more look it to over quarter turn year. to Dave? for quarter and I outlook Dave call, now on the second

David Loretta

and good Sam, Thanks, morning.

nearly made on basis Sales desktop. roughly increased we Sales to conversion compared of customers and For of digits sales speed, in were channel reported of last quarter, net our in web $XXX.X and up single both information. and close million points product XX the for of navigation sales year-to-date with X% increase last to brings across the driven choice the direct continues down million, our enhancements X.X% year. digital by X.X% $XXX.X high mobile to to increased channel an flat become And to devices our site second year. and quarter, mobile devices visits in

sales compared drive improvement on the from also rate channel teams traffic compelling visits year, track to X%, is quarter. offers. and targeted increases in the and were in an which store Our first service are trend continuing with retail conversion the store with last the customer X%, down down assortments outstanding to The store

a items seasonal price shipped. was retail lower orders the full As sales. strong, slight net sales in lower average The selling of order value Sam in positive sold growth was level largely higher decrease promotional and of clearance attributed for mentioned, year-round and demand and our to a levels generating to and and offering due

of with healthy last teens And low to spring the penetration than total quarter basis total. summer from high goods to year-over-year end down to XXX points the Our is down and is position X% inventory single-digit roughly more clearance year.

customer began and last we and receive new than strong. the fall been planned, winter has seasonal sooner offer As to year items response and

the drove nearly X%, in men's enabling up part keep our categories. increases year-round We was of sales demand use targeted the rates offers, some while Total are have us and programs, through flow division inventory core We experiencing spanning the turning. improved in also for and were layer with our items women's incremental during to underwear. of first build higher and the the of down tops quarter Duluth, for and X.X%, men's sell-through largest AKHG pants, events women's

margin of Our profit year, year and in X.X% dollars product second profit compared quarter full from the margins stabilization end a last declined XX.X%, gross last We sales. gross year. price to last reflects XX.X% was the Gross did of near lower mix quarter. relative to see

labor initiatives expenses a to an expenses fulfillment SG&A expenses. of and costs year XX.X% greater percentage net $XX.X stores across of XX%, result with to compared million million of compared our in fulfillment and continuous the orders and made scheduling and increase values. Within $XX.X X.X% to efficiency the variable XX.X% selling increases centers of to last gains year from quarter million network. of declined was improvement general order sales to sales, increased or shipping related sales. included rate marketing administrative Turning and as a direct XX% to $X.X to decrease from lower as million in $X.X last of This XXX volume expenses, an sales leverage shipped selling our of a year points of basis increase of to expense, as advertising million Selling $X.X costs outbound due for percent in expenses. and second well last higher as or compared average in a and increased

basis year points $XX.X million percentage compared and and quarter, to Advertising XXX sales year. $XX.X million the X.X%, of costs decreased were last compared marketing to a as in last XX.X% to

helped new creative in clearance in investment and that and TV compared national saw last results stronger brand was search lower Our arrivals activities costs. We and channel channels streaming increase media increased year awareness to spend was ad on digital the through along messaging and and rates. drive traffic email flat with retention from our focused reduced that web organic product with reactivation

high quarter, while social we benefits. roughly realize and to mid-single continue on innovation, return highlight sales customer through media spend increased the also per productivity. counts features customer We product during channels when Overall, maintaining digits flat

last net second quarter, and were the or first General during million administrative year XX.X% to or last XX.X% year. the costs. product and in the facility additional for the personnel and now compared $XX increase automated is million the reflects $XX.X corporate compensation fulfillment stock cost expenses fixed sales, associated to new with quarter and our expenses Similar center sourcing the that functions operational of of incremental development, new over area the

compared the of for sales, $X.X X.X% $XX.X was quarter X.X% Adjusted EBITDA year. second million or last or of sales million to

Our net in of per versus second the loss profit per last $X.XX share year. share was a quarter $X.XX

target of our balance with of capital the associated flow $XX the line million fulfillment quarter $XX We of for including cash Adairsville, net share this by healthy lifted the cash funded the on remain ended cash in We year, million $XXX with balance to cash free $X and working the from million, during capital Moving $XX spend in $X quarter flow that outstanding lion's on quarter. sheet. and increased credit. new inventory million overall The the of our with of the end by million Georgian. center first expenditures second

center to Sam As well up we're our selling to efficiency related a and realizing delivery the portion to customer see project gains fulfillment pleased to go activities ramp of our costs this QX over faster mentioned, as course begin on live of base. production direct times as greater

X.X% in spring/summer, the position and inventory quarter goods mix is fall/winter of seasonal strong the Our more a to last healthy the ended with same on period sell-through reflecting from balance versus down weighted a on Total a last clearance units inventory receiving spring/summer over from down as are of turnover. the and hand year XX% earlier sales on and markdowns winter during result managing optimize fall actively season goods. planned to year

$X.XX and first which half our loss see confirming of year $XX We to expect the have net reflecting $X.XX. sensitive. and to year million, for full estimates to adjusted We half now are adjusted $XXX $XX but our we $XXX EBITDA of share somewhat results, the guidance a remaining reduced million sales second of outlook price in EPS per a EBITDA and consumers million million

and will basis We XXX flat margins gross XX basis full up year be be points. points expect profit SG&A to XX to to down

privilege it want that step company, turn address want to and I an but decision my a honor pillars Big to I Sam, I take talented emphasize in work the to against the Dam down a XX. to many strategic the to back and team on Senior execute and of been Before outside to an I employment all President Vice Officer organization. Financial this best opportunity future. success it's I I accepted moment believe and as wish well Chief across alongside September individuals Blueprint, have the the is Sam to Duluth positioned the the and continued

to I'll now pass back Sam. it

Samuel Sato

Thanks, a the functions. and with Dave. a deep utmost contributions has talent across as organization Duluth I many we all his the bench confidence on can't leadership, of search strengthened Duluth be finance finance replacement Dave. transition anchored thank past will and for elevated seamless years. its Under this have experience extensive a for Dave enough I permanent Dave's X leadership for at over

I'd as joining as Mike current XXXX. Vice Accounting Chief to who years and Chief will at has Business for Murphy, Services Financial Interim serve Financial like well served as X Officer First take since KPMG. Accounting been company, Mike Mike to welcome his Prior opportunity at years Officer. President in Officer, the current our this as to Chief position X

the open an I much for partner his honor success call in Dave we'll him that, wish endeavors. And In and been it's with with closing, future to questions.

Operator

come Stichter first Our question will with Instructions] BTIG. Janine from [Operator

Janine Hoffman Stichter

It I and weakest you on of could elaborate the like May you was more what in throughout the bit think the cadence improvement saw hoping said quarter? was some June. you you thought sounds I a

some standpoint So top And to margin of in the you versus maybe shopping some How what end about Father's the to of events think both some a changed I'd maybe of from margin line just spoke just and the product like towards there? some much hear the been, stabilization a on mentioned versus love from environment product around I Day? where also thoughts you that key quarter. it's stabilization initiatives it standpoint, then customers

David Loretta

Janine, is this Yes. Dave.

the Both us were being Father's things June, us. growth kind with July. to So into our and did direct for well But big channel. and event month saw -- the we for positive as the a entered improving. stores of as down. direct build high quarter we and rate into in the was May out continue month play toughest was Day pretty best say I'd as July were a retail traffic and into

So we pressure blend results the into transactions points the together, part find being from just down down Margin basis when X%. -- as certainly continue the pressure you The and but business. XXX did last of the traffic with drive to ways impact of impact to year. it was under margin

out we're July, were first came we did now starting starting really the as impact when out I of as gross last But on -- period business. pressures remarks, the call to year's margin to comp

top slightly August, But to we are as look down. last margins still far, so the And up gross through line is year.

on for we're line, trend, stabilized way kind us good top a started margin a and So that to front. turn but has the of seeing continuing in has

Janine Hoffman Stichter

you've taking prices might longer? on keep like product to keep to been promotional the for benefits or more flowing then you for And maybe actions place product as pricing these need just speak reductions sourcing or some the to through, the in promotions that seem potential you Great. cost of

Samuel Sato

is this Yes. Janine, Sam. Yes.

consumer of targeted to continue to with strategy. and try with balance brand be We offers. the the sensitivity So integrity our pricing we're our going and be to

going not to have so a fire to we're speak, sale, So there's a there. balance

group. more flexibility in creating my prepared our to a sourcing challenged. over pricing said of intent us structural the new onboarded And term the a several we've I now ultimately bit As is remarks, change to members with when long model gives and of business more our

a over the drive tremendous think margins we will increased but opportunity over us of term. ramp-up the gross next the years, so for occur couple certainly And to long see product

Operator

next Jonathan from Our will come with question Komp Baird.

Jonathan Komp

but just strategy seeing full the margin promotions I participate follow to want the on further on revenue, again you the little environment. brand year you're Can the the maybe elaborate up in holding guidance, why and right price promotional the here? and lowering a the our participating the that's move in to to thoughts

David Loretta

that we're consumer there, the start John. the is robust. out feeling there, I'll pressure Yes. demand Clearly, yet still there's from pricing

sold consumers be to we are the units. the what point we value price As But telling more to orders, a said, more shipped for us them is proceed. needs

confident the men's, the in core momentum confident So that from was a an some is categories of keeps seeing improving men's quarters. X.X%, where and brand some trend the line we're us down of has quarter the that got we're from X while about optimism top of the standpoint, it's last the

the And third as that in and men's our we're quarter here, market. some some -- innovation with in that we're newness bringing items styles in our category, play seeing are to other the out of entering

In we're think bringing line, pressures bottom drive year, with. margin to which keeping of we're significant -- a that still is on fact, that pricing to the the pleased But the top back line new impact sustain of this going half amount are we items market results. weighted really

Jonathan Komp

Sam. much the think transition of just being EBIT a When guiding this maybe terms you're the of dollars. a Big profitability year Dam follow-up, in I still, year too Blueprint, And not

levels So talk pursuing can you current margin the you And strategies impacting the today? temporarily benefit have what's future right you at that years? growth maybe might that about business are the

Samuel Sato

pillars to center Thanks, fulfillment Yes. is Yes, as group. really automated remarks, Big our I the at the of highly our and Jonathan. beginning Blueprint mean, sourcing I Dam exciting X talked my

they change sustainability critical implication to of And relative so that mid- when and the the the long-term from and a X you profitability, and are growth think business about that unlocks. both of in really structural sales

but is being much and of CPU especially more of the a it's online general, on perspective, expectations, and business but the efficiencies of So in majority deliveries, also to only perspective, from just our efficient about products. sell the click cost faster not from fulfillment we us, how doorbell consumers' from delivers a not part

And business, anything the to growth, for current application key not to consider grow our part so we business perspective. and it becomes but be that that an has our or else, fulfillment center from only avenues wholesale continues as real as a and unlock scaling network other the delivery fulfillment of

first Innovations a the The and who products sourcing we product the piece, year, component, that as it's Material at development. critical last and hiring well-priced core a Duluth Director of of design and announced not our terms solve a innovative that's are of vertical high-quality, operation, in of about And just problem. bringing is,

so And our to and allow greater profits and dynamic change also more bring group pricing will longer sourcing for flow-through. model experienced in and investing a a term

that and we're investment to leads products So the full consumers price our to innovative past. times have then in term, through enablers, based our is and and related back think really market. for on our some affinity And the in showing, enablers And to still the been yes, these ultimately, enterprise. sensitivity what we've Duluth two, bring ultimately challenges things. selling near I the for the we in that macro X but brand of P&L conditions in consumers are higher One what the the are calling these our loyalty the choppy

it's of cost-efficient the to in then scale that sustainable. advantage right And we've occur. got us that's way will and that ensuring in take part place that business that, a about confident the more I'm infrastructure So

Jonathan Komp

helpful. That's Okay.

Prior look was more to it it Dave, Just about current a me, last XX% at like relative one the sales. for inventory inventory looks full like -- mid-XX% the annual ratio when inventory that COVID, sales, relative XX%. I year to to to

some you current several is Or you factors the of ago? base? inventory there that today the years relative inventory at business looking what the aspect highlighted So more comfort when are other requires with to

David Loretta

year more quicker, some the those Yes. allow sourcing turn us off longer environment be and initiatives less lead inventory Sam we're times products issues and with initiatives, the with of coming [indiscernible] in some to relative X years. fresh from new to will still that new enable that's to term, and us the inventory chain this logistics shorten as sales last product supply on in, the described, operate of even the in really getting we're and the

Our relevance ranges, we're measuring more have got focus our to fullness the in and was categories where we've the customer. really sure assortment, about the making size

say are going improve So to this I'd inventory turns year.

we're in moving direction. manage and down So right demand urgency isn't standpoint. the the the stifle customer but a that from to

And inventory will but we're so we've year with initiative, robust realized keep -- of investments. confident And to it's a primary and because the is period brand newness. that that turns secondary exceed return even any prior those

Operator

next from Jim Our Stifel. Duffy question come will with

Jim Duffy

half for please of of just help the for to Dave, specifically all you as it have and media branding I'll these follow-ups. to to thanks Can versus easy Dave, all going second to interested years. messaging think some specific Sam. most mix messaging speak focus year? in my off the And products. strategies questions I'm let and you and then the I'm marketing relates I

Samuel Sato

sure. Yes,

fluid know, complex dynamic with the us. that's you customer right we've loyal the of and as and more more at our been combinations to And business. engage learn we on great got continue customers. And level, marketing just a current this specifically, is to Jim, part we're about focused a So high

the trend. customer so make to new want obviously, our improving new critical as into brand to a as an continuing on our product with component. sure customers new is and we folks brand them we're build up to serve on focus And continue well engaged content keeps that And acquisitions to bring that and

to of instance, an want through to as big combination different the our specifically when lift success, streaming. including bets we media pretty So it product that placed our a lift features, across to other When from continued channel the programming, that, and for it terms owned get talk consumer comes of traditional we bring, brand in have places. And good certain of YouTube when building, it's current example, that them, funnel video and and comes then site. platforms, during comes certain visits and we to found stories times we it's spectrum, we lot a content, social when big do our television, a where through we largely or network get of top Wayforger to the in really around about products, of year base, social whether specifically

what mix of -- really it's into is streaming to become really targeting has So important we're a media us. broad audio

of part big a our become that's so And initiative.

visibility we're brand trying broader funnel, invest. into innovation around transactions. targeted much so ultimately understanding the basis. doing deeper attract And to And where on our personalized We're go and really, education we that a we're it's to when more that on product awareness based greater influences leads and to create a where trying then where that we

Jim Duffy

in half of to allocating and AKHG stabilizing women's is Okay. the men's core new spend growth in offering speak understand core The to trying decline. coming second year. question, marketing But related newness or how to recruiting drive offering that consumers versus the lot men's through a of can follow-up seeing gains you're the in I you or that? for you and suggest you're have women's AKHG the that

Samuel Sato

Yes.

really increased and what we're an Flex was demand was our that is and it core improved fits washes styles, big bringing bringing additional quarter men's QX. in for whether is business our to exciting for the newness our X.X%, down or from So see I fits. men's the of program it's T Longtail seeing and what's And denim to think trend starting we're offer new for but we're colors pant we're Double some

many core my Fire a new remarks our the new to Those to that back programs, Hose I bring over growth. Fire program, are durable that date. about evolving renew believe in like as most it we're doing we'll So business our bit, talked is which long fabric items pant, which some things to core Hose core Flex of and prepared we're evolve we of term, that the

only in more for initiatives, we about excited, us more into focused women's, opportunity, growth talked sales and our years extend not but really allowing being top season-over-season and feedback brand white to women's adjacent and one we're our and ago space categories. internally from and but strategic to a Specific only line so offer of her the we continue to our profitability, X.X great and not really we're us, has see become really or getting

market intimates, example, as introduced marketplace. the what base and she gotten competitive we've in women's really potentially and learned As have feedback and really, what's missing an it and yet layer, more about wants

and to of be Our a a continues it development of having expand. done assortment, job and grow design just market to part product business that bringing that team our and great and has

we've opportunity really tremendous larger it that offer, much which XX% today, think a our ago, women's got so while of a than to X.X total. And optimize I it's it's years was

way in And of to that's we stories in a going then business. And it her. do way to brand those in him of it we of the to we're only terms either/or. you a around a businesses things, from that frequency tell. We're but invest an types and position, that not in scheme appropriate, building terms and we about so lastly, look that specific at got And think the when of in question marketing, go going to for long as really your don't for

feedback. We the flexibility rebalance refocus the change teams to relative year, off and throughout it beginning don't at dollars. year allocate based but have that so we're initiatives the consumer certain and And our at consumer as some brand trading seeing things to demand and of we really on the monies of look creative or the

Jim Duffy

Sam, a allocation purchase And curious than higher value frequency repeat differences women? that of consumer. or behavior and you're lifetime helpful. speak a men standpoint male your of I'm to between cohort, any has your from you can whether is she seeing That's in higher just capital,

Samuel Sato

always Yes, At and Duluth high that been to level, it's what's fascinating a develop. interesting. I me at think is to hard it's something

you our that. isn't buying when to female have keep that so business And is a you And talked sure have your have you And while are and buyers XX% eyes and him. that of women's lot men's, women we've ratio we a for of men make have XX% about on we buyers. it, XX-XX

what's brand. stores a her, she's there's so for our And compelling to for shopping more because led assort an offer opportunity belief that's and better our also specifically our to that provide us

I frequency added as we're men seeing necessarily what with and we're into say is totality, in business, and seeing, for in expanding than expanded size so increase, it's would women. shopping. And loyal most more as -- women's wouldn't the just seeing women's our we're I we're basket say customers, we've more categories, additional sure, frequency

Operator

Carden William Blair. question next Our Dylan from with come will

Dylan Carden

the kind I want guidance here. understand of just of balance make sure the to I

second the year the of in still downside kind But promotional overhang. cleaner with margins have on Do of right? inventories. coming to the least here, You're incremental inflection nice, is that sales I out quarter a of seemingly the

David Loretta

given That's That's pricing the that that we overhang, think Dylan. continue. update the pressures will right, was an we really made

Dylan Carden

guess, question embedded the not what Has up kind activity? that sort of And to ticked asked is, been guess, you on in are margin? of up promotional the the do so incrementally? inflection but -- I heightened the You've you more this, not as feel kind different why ways I I of given give kind opposed call, giving price hold that of guess, through

David Loretta

Well, expect mean, would standpoint to for from and I prior stabilizing, we're going the anticipated a not little full see no, it's but year. the more X the not be haven't we seen year, We the that planning half pressure play back of might recovery, out, improving starting over to that to but it continue. and relative we're heightened, it to we price more entered recovering pressure been last the that months see we that

that part So points year get year first to XX quarter, down guidance in to back implies from profit compressing this first articulated. significantly half the the of and to of And the that's basis XX the particular. full the gross I year, guidance margins

keep the in. So inventory would that the the all assured through to, be they're again, that goal moving and customers engaged keep period

Samuel Sato

think big events responding do targeted They're add promotions an were when spending our more is purchases terms of here. down. I'll issue those The run The because their full our becomes we events. thus promotions purchasing just reducing. or more and during in the driving a is price couple distinction that, and periods, selling to that of of frequency important there customers I Dylan,

products. those we're going do greater degree that But offers of the things, that to amount put so and we're and our we periods are degree in targeted and customers And not. what the balanced to is just seeing out ultimately, than during we purchasing those be when we there discount a more responding just

Dylan Carden

it. Got

And Is kind low at next at but we you're constant margin year, on recovering think leverage full to the on opportunity kind quantify range. factor some margin, that as you so operating of swing looking XX% selling margin, here, of presumably next about kind of way I can guess, price or we of holding How the new in sort the there looking SG&A look should negative as gross any distribution? the efficiencies year? or that

David Loretta

at appropriate next we'll probably Well, team stage, me the coming quarter year. this Dylan to provide fourth it's a talk not provide call up. -- and about that We're that -- for will on

immediate. we need sales is this in be when leverage -- fourth you growth, and just our SG&A but to we -- quarter, of can much it year So doesn't look the back see incremental part and on into

really the half We in expect the year. in of and quarter fourth the back on SG&A leverage

it which we're in much So at see top start through, to to the kind model. it where flow doesn't take business of line is

Dylan Carden

the wholesale thinking wholesale? have How I that you Okay. right? Do apologies, distribution I new forgot, about allows And -- business. then bigger expansion for of a are

Samuel Sato

business have by it online to allows of store well, -- and plan inventory retail that of That QX. totality. of the a replenishment, our for XX% fulfill about it XX% is larger in end Yes, the about facility

network opportunity on grow our business. combination potential And road, an wholesale in but capacity the manner. even retail at DTC going us talked down of do we've highly whether has that the just it's not and bolting to a general, it current so a acquisition, for the business And a to do to as the that, only the of businesses or cost-efficient it's

Operator

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

now may disconnect. You

Duluth (DLTH) 31 Aug 232024 Q2 Earnings call transcript