Duluth Holdings Inc. reported its financial results for the second quarter and the first half of fiscal 2024, highlighting a mixed performance in revenue and profitability. For the three months ended July 28, 2024, net sales reached $141.6 million, reflecting a 1.8% increase from $139.1 million in the same period of the previous year. However, for the first six months of fiscal 2024, net sales decreased by 1.7% to $258.3 million compared to $262.9 million in the prior year.

Gross profit for the second quarter was $74.0 million, up from $71.5 million, resulting in a gross margin of 52.3%, an improvement from 51.4% year-over-year. Despite this, the company reported an operating loss of $3.9 million for the second quarter, worsening from a loss of $1.4 million in the same quarter of the previous year. The net loss for Q2 2024 was $3.7 million, compared to a net loss of $2.0 million in Q2 2023. For the first half of fiscal 2024, the net loss increased to $11.6 million from $5.9 million in the prior year.

Selling, general, and administrative expenses rose to $76.3 million in Q2 2024, up from $72.9 million, with a notable increase attributed to a non-recurring estimated sales tax expense of $2.4 million. Adjusted EBITDA for the second quarter improved to $10.6 million from $8.6 million, while for the first half, it decreased to $12.4 million from $13.8 million.

The company’s cash and cash equivalents significantly decreased to $9.8 million as of July 28, 2024, down from $32.2 million at the beginning of the year. Inventory levels increased to $168.7 million, up from $125.8 million, indicating a strategic decision to bolster stock in anticipation of future sales.

Duluth Holdings initiated phase two of its fulfillment center network plan to enhance operational efficiency, which included a lease amendment for a fulfillment center in Dubuque, Iowa, incurring a termination penalty of $3.7 million. The company also recorded an estimated sales tax expense accrual of $2.4 million due to ongoing audits.

As of July 28, 2024, Duluth operated 62 retail stores and three outlet stores. The company continues to navigate challenges in store traffic and overall market conditions while implementing strategic initiatives to improve its financial performance.