Скачать или смотреть Duluth Holdings Q3 2025: Margin Wins Amid Sales Decline & Stock Plunge

Duluth Holdings reported a mixed Q3 2025 earnings with a significant adjusted EPS beat of $(0.23) versus $(0.46) expected, reflecting strong profitability improvements despite a 9.6% year-over-year revenue decline to $114.9 million. The company expanded its gross margin by 150 basis points to 53.8%, even absorbing a $3 million tariff impact, showcasing disciplined cost management and direct-to-factory sourcing strategies. However, the revenue miss and a lowered sales guidance to $555M$565M from $570M$595M sparked a sharp 29% stock drop, illustrating investor concerns around the promotional reset's impact on top-line growth.

Management emphasized a strategic "promotional reset" by cutting global promotional days by more than 50%, boosting average unit retail price by 6%, and focusing on "core durable products" like men's denim, which grew 9% with higher margins. Inventory dropped 17% year-over-year, freeing up $39.2 million and contributing to a strong liquidity position of $88.6 million net. Despite fewer customers, sales per customer and margin dollars per customer increased, indicating a shift toward higher quality customer engagement amid a tough apparel market.

Looking ahead, Duluth Holdings plans to push adjusted EBITDA to the high end of its $23M$25M range, with cost savings expected to exceed $10 million, closer to $12 million. The company paid off its revolving credit facility post-quarter, boosting net liquidity to $125 million. While the market reacted negatively to the sales guidance cut, the company's operational discipline and balance sheet strength suggest a potential long-term turnaround story centered on profitability and cash flow generation over top-line growth. Investors will watch closely for signs that these efforts stabilize traffic and revenue in future quarters.

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