Duluth Holdings Reports $15.3 Million Net Loss and 12% Sales Decline in Q1 Fiscal 2025

Duluth Holdings Inc. reported a net loss of $15.3 million for the first quarter of fiscal 2025, a significant increase from the $7.9 million loss recorded in the same period last year. The company's net sales decreased by 12% to $102.7 million, down from $116.7 million in the prior year. This decline was attributed primarily to reduced web traffic and slower promotional activity, which impacted both direct-to-consumer and store sales. Direct-to-consumer sales fell to $62.6 million, while store sales decreased to $40.2 million.

The company's gross profit also saw a decline, dropping to $53.4 million from $61.6 million, resulting in a gross margin of 52.0%, down from 52.8% in the previous year. The decrease in gross margin was largely due to higher clearance penetration, although it was partially offset by improvements in product costs from direct sourcing initiatives. Selling, general, and administrative expenses decreased by 6.9% to $65.7 million, but as a percentage of net sales, these expenses increased to 64.0% from 60.5% due to the overall decline in sales.

Duluth Holdings has made strategic adjustments to its financial structure, including a new credit agreement that provides for borrowings of up to $100 million, which is expected to enhance liquidity and support seasonal inventory needs. The company also reported a significant increase in cash and cash equivalents, which rose to $8.6 million from $3.3 million at the end of the previous quarter. This increase was primarily driven by net borrowings under the revolving line of credit, which amounted to $64.5 million during the quarter.

Operationally, Duluth Holdings continues to focus on its omnichannel strategy, operating 62 retail stores and three outlet stores as of May 4, 2025. The company has emphasized its commitment to enhancing customer engagement and product offerings, although it faces challenges from economic conditions, including inflation and changing consumer behavior. The company’s management remains cautious about the outlook for the remainder of the fiscal year, citing uncertainties in consumer demand and potential impacts from macroeconomic factors.

Looking ahead, Duluth Holdings anticipates that its cash flow from operations, combined with the new credit facility, will be sufficient to meet working capital requirements and support planned capital expenditures. The company plans to invest approximately $17 million in fiscal 2025, primarily in logistics optimization and information technology, to enhance operational efficiency and customer service.