Analyst Summary:
Duluth Holdings Inc. reported its fiscal Q4 and fiscal year ended January 29, 2023, financial results. The company showed net sales of $241.8 million for the fourth quarter, a decrease of 10.7% YoY. Net sales in store markets decreased by 10.3%, while net sales in non-store markets decreased by 11.8%. The company's balance sheet showed a cash balance of $45.5 million and net working capital of $107.9 million at the quarter's end with no outstanding bank debt. The company provided its outlook for fiscal 2023, expecting net sales to be between $650 million and $680 million.
Management commentary stated that the promotion-heavy market environment led to the decrease in gross profit with deeper discounts to counterbalance the lower full-price sales. They also noted a prudent pull back of spending on account of uncertain customer demand.
Regarding non-GAAP measurements, management believes that this approach assists in conducting comparisons between current and prior operating periods. Adjusted EBITDA and Free Cash Flow are useful for comparing operating performance consistently and measure capital efficiency in executing growth strategies. Investors must read this information in conjunction with the GAAP financial results.