The company posted a net loss of $10 million for the quarter ended May 3, 2026, compared to a net loss of $15.3 million in the corresponding quarter last year. Reported earnings per share (EPS) stood at a loss of $0.29, while adjusted earnings per share (EPS) was a loss of $0.2 after excluding impairment charges and restructuring expenses, Duluth Holdings said in a press release.
Duluth Holdings has reported improved Q1 FY26 profitability despite lower sales.
Net loss narrowed to $10 million from $15.3 million a year earlier, while adjusted EBITDA rose to $2.6 million.
Gross margin expanded to 57.4 per cent, supported by reduced promotions and sourcing efficiencies.
Net sales fell 4 per cent to $98.6 million.
The company also raised its FY26 adjusted EBITDA outlook.
President and CEO Stephanie Pugliese said the company’s focus on promotional reset, operational excellence and inventory management helped strengthen margins, liquidity and profitability. She added that customers were responding positively to Duluth’s core products, seasonal collections and latest marketing campaign.
DTC sales decline, retail stores grow
Adjusted EBITDA increased by $6.4 million year-on-year (YoY) to $2.6 million during the quarter. Gross margin expanded by 540 basis points to 57.4 per cent of net sales, driven by higher average selling prices due to lower promotional activity and improved sourcing efficiencies, partially offset by tariff-related costs.
The net sales declined 4 per cent YoY to $98.6 million from $102.7 million in the prior-year quarter. Direct-to-consumer (DTC) sales fell 8.7 per cent to $57.1 million due to lower web traffic and reduced conversion rates following lower promotional activity.
However, retail store sales increased 3.3 per cent to $41.5 million, supported by higher average order values and contributions from two new stores opened in the third quarter of 2025.
Selling, general and administrative (SG&A) expenses declined by $3.4 million to $61.8 million, reflecting fulfilment network efficiencies and lower personnel expenses. These expenses accounted for 62.7 per cent of net sales, compared to 63.4 per cent a year earlier.
Inventory levels fell sharply by $43.7 million, or 24.8 per cent, YoY to $132.4 million, while the company ended the quarter with cash and cash equivalents of $6.1 million and net liquidity of approximately $99.5 million.
The company reaffirmed FY26 forecast
For fiscal 2026 (FY26), Duluth reaffirmed its net sales guidance of $540 million to $560 million. The company also raised its adjusted EBITDA outlook to between $28 million and $32 million, compared to its earlier forecast of $26 million to $30 million. Capital expenditure guidance remains unchanged at approximately $12 million.
Fibre2Fashion News Desk (SG)
