Destination XL Reports Decline in Sales and Net Loss in Q1 Fiscal 2025

Destination XL Group, Inc. reported a decline in financial performance for the first quarter of fiscal 2025, with total sales of $105.5 million, down from $115.5 million in the same period last year. The company experienced a net loss of $1.9 million, or $(0.04) per diluted share, compared to a net income of $3.8 million, or $0.06 per diluted share, in the first quarter of fiscal 2024. The decrease in revenue was primarily attributed to a 9.4% drop in comparable sales, which included a 6.6% decline from stores and a 16.2% decrease from the direct business segment.

In terms of operational metrics, Destination XL's gross margin rate fell to 45.1% from 48.2% year-over-year, largely due to increased occupancy costs and markdown activity. Selling, general, and administrative (SG&A) expenses rose to 45.0% of sales, up from 41.1% in the prior year, reflecting the impact of lower sales on fixed costs. The company reported a slight improvement in sales velocity over the quarter, with comparable sales showing a gradual recovery from a 13.9% decline in February to a 7.2% decline in April.

Strategically, Destination XL has focused on enhancing customer engagement through initiatives such as the launch of its new loyalty program and the introduction of the FiTMAP sizing technology, which allows for personalized fitting experiences. The company has also been proactive in managing inventory levels, reporting a 6.3% decrease in total inventory to $85.5 million compared to the previous year. The company plans to open six additional DXL stores during fiscal 2025 and has converted several Casual Male XL locations to DXL stores, reflecting its ongoing commitment to brand consolidation and expansion.

Looking ahead, Destination XL remains cautious about the broader macroeconomic challenges affecting consumer spending, including inflation and tariffs. The company has indicated that it will continue to monitor these factors closely while leveraging its cash position, which stood at $29.1 million as of May 3, 2025, down from $53.2 million a year earlier. With no outstanding debt and significant unused credit availability, Destination XL is positioned to navigate the current economic landscape while pursuing growth opportunities in the big and tall men's apparel market.