Destination XL Group, Inc. reported a decline in financial performance for the second quarter and first half of fiscal 2024, ending August 3, 2024. Total sales for the three months were $124.8 million, down from $140.0 million in the same period of fiscal 2023, reflecting a 10.9% decrease in comparable sales. For the six months, sales totaled $240.3 million, a decrease of 9.5% from $265.5 million year-over-year. The decline was attributed to reduced store and direct sales, with store sales down 10.0% and direct sales down 12.8% in the second quarter.
Gross profit for the quarter was $60.2 million, compared to $70.4 million in the prior year, while gross profit for the six months was $115.9 million, down from $131.3 million. The gross margin rate for the second quarter decreased to 48.2% from 50.3% in the previous year, primarily due to increased occupancy costs. Selling, general, and administrative (SG&A) expenses rose significantly, accounting for 43.0% of sales in Q2 2024, up from 33.9% in Q2 2023, driven by higher marketing costs.
Net income for the three months ended August 3, 2024, was $2.4 million, a sharp decline from $11.6 million in the same quarter of the previous year. For the first half, net income was $6.2 million, down from $18.6 million. The effective tax rate increased to 35.2% in Q2 2024 from 26.4% in Q2 2023, influenced by lower pretax income and permanent book-to-tax differences.
The company’s cash and cash equivalents decreased to $21.5 million from $27.6 million at the end of the previous fiscal period, while total current assets slightly declined to $151.7 million. However, total assets increased to $383.8 million, up from $357.7 million, and total stockholders' equity rose to $157.0 million from $149.0 million.
Strategically, Destination XL opened two new stores in the first half of fiscal 2024 and plans to open six more in the latter half, although the rollout for fiscal 2025 has been revised down from 15 to 10 stores. The company is also transitioning to a new eCommerce platform, with the first phase completed and further phases scheduled for completion by early 2025. Additionally, a new brand advertising campaign launched in May 2024 has shown positive results in select markets, leading to increased traffic and customer acquisition.
About DESTINATION XL GROUP, INC.
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