Duluth Holdings (Nasdaq: DLTH) reported a wider net loss for the first quarter of 2019, despite a marked increase in sales. While the bottom-line missed, sales matched the market’s expectations. The company also reaffirmed its guidance for full-year 2019, sending the stock higher in early trading Thursday.
In the April-quarter, net loss widened to $7.6 million or $0.23 per share from a loss of $0.7 million or $0.02 per share in the corresponding period of last year. Analysts were looking for a narrower loss.
However, net sales of the Wisconsin-based store operator advanced 14% annually to $114.2 million during the three-month period, matching the estimates.
The bottom-line missed the market’s expectations and the company’s stock fell sharply early Thursday
The top-line growth was driven by a 42.8% increase in retail sales, which was partially offset by a 0.8% dip in direct sales. In general, sales benefitted from new store additions, the continuing growth of the women’s business and new product launches.
“From a market perspective, the softer demand trends we experienced at the end of the fourth quarter persisted through May. In response, our entire Duluth team is focused on the areas of improvement that are in our control,” said CEO Stephanie Pugliese.
During the first quarter, the company opened five retail stores, totaling around 78,000 of gross square footage.
The company said it expects earnings to be between $0.74 per share and $0.80 per share in the whole of 2019, which is in line with the earlier forecast. It continues to expect full-year net sales in the range of $645 million to $655 million. The estimate for adjusted EBITDA is $60-$64 million.
The management, which is looking for capital expenditure in the range of $40 million to $45 million, intends to open 15 new stores this year, adding 230,000-240,000 of additional gross square footage.
Duluth is yet to recover from the sharp fall that followed the unimpressive fourth-quarter results. Shares of the company are down 40% since the beginning of the year and 25% over the past twelve months. The stock closed the last session lower but rose sharply early Thursday.