Destination XL Group, Inc. reported a challenging performance for the third quarter and the first nine months of fiscal 2024, reflecting significant declines in both sales and profitability compared to the previous fiscal year. For the three months ended November 2, 2024, total sales were $107.5 million, down from $119.2 million in the same period of fiscal 2023. Similarly, sales for the nine months decreased to $347.8 million from $384.7 million year-over-year. The decline in sales was attributed to a 11.3% decrease in comparable sales, with store sales down 9.9% and direct business sales down 14.7%.
Gross profit for the third quarter was $48.4 million, a decrease from $56.6 million in the prior year, resulting in a gross margin of 45.1%, down from 47.5%. The company reported an operating loss of $2.5 million for the quarter, contrasting with an operating income of $5.3 million in the same quarter of the previous year. Net loss for the third quarter was $(1.8) million, compared to a net income of $4.0 million in the prior year. For the nine months, net income fell to $4.4 million from $22.6 million, reflecting the impact of decreased sales and increased marketing costs.
The company’s cash and cash equivalents significantly decreased to $7.1 million as of November 2, 2024, down from $27.6 million at the beginning of the fiscal year. Total current assets also declined to $140.3 million from $153.2 million. However, total assets increased to $381.3 million from $357.7 million, primarily due to changes in liabilities and equity.
In terms of strategic developments, Destination XL has initiated a stock repurchase program, allowing for the repurchase of up to $15.0 million of common stock, with $10.2 million already utilized in the third quarter. The company has also completed its transition to a new eCommerce platform, enhancing customer experience, and launched its DXL Big & Tall merchandise on Nordstrom's digital marketplace.
The company plans to open four additional DXL stores and convert more Casual Male stores to DXL format by the end of fiscal 2024, although it has reduced its expectations for new store openings in fiscal 2025 due to sales pressures. Overall, the company is navigating a challenging retail environment while adapting its strategies to improve performance.
About DESTINATION XL GROUP, INC.
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