Destination XL Group, Inc. Reports Holiday Sales Results
- Total sales were
$106.6 millioncompared to $78.4 millionfor the 9-week holiday sales period ended January 2, 2021and $103.1 millionfor the 9-week holiday sales period ended January 4, 2020.
- As compared to fiscal 2019, comparable sales in our omni-channel retail business for the same 9-week holiday period increased 11.4%, primarily due to an increase in comparable sales from our direct business of 32.0% and an increase in comparable store sales of 3.2%. This comparable sales increase of 11.4% was partially offset by closed stores and a decrease in wholesale revenues, resulting in the 3.4% increase in total sales for the 9-week holiday period as compared to the same period of fiscal 2019.
Based on the holiday sales and expectations for the remainder of the fourth quarter, the Company is updating its guidance for fiscal 2021 as follows:
- Total sales for fiscal 2021 are expected to be
$500.0 millionto $505.0 million, narrowed from previous guidance of $500.0 millionto $510.0 million.
- Net income of
$0.80to $0.85per diluted share, increased from previous guidance of net income of $0.72to $0.80per diluted share.
- Adjusted EBITDA of
$74.0to $78.0 million, increased from previous guidance of $70.0to $75.0 million. Free cash flow for the full year is expected to be in excess of $65.0 million, increased from previous guidance of free cash flow in excess of $55.0 million. Adjusted EBITDA and free cash flow are non-GAAP financial measures, see “Non-GAAP Measures” below.
“We continue to transform our business through DXL’s brand repositioning which allows us to better target the addressable market and drive sales growth. For the critical 9-week holiday shopping season we grew sales both in-store and through our direct channels with very few promotions which contributed to higher margins based on lower markdowns. These structural elements are a major factor in driving our expected record performance for the full year in adjusted EBITDA, net income, and free cash flow. We have remained faithful to our strategic initiative to transform DXL and reposition our brand with a greater focus on fit, selection and experience,” said
“With the resurgence of COVID-19 infections from the Omicron variant, we are experiencing a softening of sales which we attribute to growing public concern which we have reflected in our updated guidance. Supply chain disruptions still exist, however, they continue to slowly improve and we are continually monitoring and pivoting to ensure we have a better flow of inventory to meet our sales expectations. Despite these challenges, we are very pleased with the structural changes that have been made to our business this year in gross margin expansion and operating cost management, and with our restructured liquidity position. We look forward to greater opportunities in 2022,” Kanter concluded.
The Company plans to report its actual fourth-quarter and fiscal 2021 financial results on
Comparable sales in our omni-channel retail business include stores that have been opened for at least 13 months and our direct business. The Company has not carved-out sales for any periods where the stores were temporarily closed due to the Covid-19 pandemic and its variants. Direct sales are defined as sales that originate online, whether through our website, at the store level or through a third party marketplace. Sales from our wholesale business are not part of the Company’s comparable sales calculation.
In addition to financial measures prepared in accordance with
The Company believes that adjusted EBITDA (calculated as earnings before interest, taxes, depreciation and amortization and excluding asset impairment charges, if applicable) is useful to investors in evaluating its performance and is a key metric to measure profitability and economic productivity.
Free cash flow is a metric that management uses to monitor liquidity. Management believes this metric is important to investors because it demonstrates the Company’s ability to strengthen liquidity while supporting its capital projects and new store growth. Free cash flow is calculated as cash flow from operating activities, less capital expenditures and excludes the mandatory and discretionary repayment of debt.
The following are the reconciliations of free cash flows (a non-GAAP measure) from cash flow from operating activities (the comparable GAAP measure) and Adjusted EBITDA (a non-GAAP measure) from Net Income (the comparable GAAP measure):
|GAAP to NON-GAAP Free Cash Flow Reconciliation (unaudited)|
|(in millions)||Fiscal 2021|
|Cash flow from operating activities (GAAP basis)||$ > 69.3|
|Free Cash Flow (non-GAAP basis)||$ > 65.0|
|GAAP to NON-GAAP Adjusted EBITDA Reconciliation (unaudited)|
|Net income (GAAP basis)|
|Impairment of assets||(2.1)-(2.3)|
|Provision for income taxes||0.5|
|Depreciation and amortization||17.0-17.1|
|Adjusted EBITDA (non-GAAP basis)|
Certain statements and information contained in this press release constitute forward-looking statements under the federal securities laws, including statements regarding: our updated guidance for fiscal 2021, including assumptions underlying the guidance such as expected gross margin rate, comparable sales and expected capital expenditures for fiscal 2021. The discussion of forward-looking information requires management of the Company to make certain estimates and assumptions regarding the Company's strategic direction and the effect of such plans on the Company's financial results. The Company's actual results and the implementation of its plans and operations may differ materially from forward-looking statements made by the Company. The Company encourages readers of forward-looking information concerning the Company to refer to its filings with the
Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The Company undertakes no obligation and expressly disclaims any duty to update such statements.
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Source: Destination XL Group, Inc.