Earnings: Duluth Holdings stock plunges after Q4 results miss estimates

Duluth Holdings (DLTH), a leading provider of clothing and apparels, Thursday reported higher sales and earnings for the fourth quarter. However, the results missed analysts’ estimates, sending the company’s stock falling in the after-hours trading session.

Net profit moved up to $20.8 million or $0.64 per share in the January quarter from $19.5 million or $0.60 per share a year earlier. Analysts were looking for faster growth.

Net sales of the Wisconsin-based store operator advanced 15% annually to $250.5 million during the three-month period but missed the estimates. The top-line growth was driven by a 5.4% increase in direct sales and a 38.9% growth in retail sales, with all product categories registering year-over-year increases. At $35.3 million, adjusted EBITDA was higher by 8.8% compared to the fourth quarter of 2017.

The top-line growth was driven higher direct and retail sales, with all product categories registering a year-over-year growth

Stephanie Pugliese, chief executive officer of Duluth Holding, said, “While we achieved solid growth in 2018 and marked our 36th consecutive quarter of increased net sales year-over-year, we faced some challenges in the fourth quarter that pressured our full year results .”

During the fourth quarter, Duluth opened three new retail stores – in Oklahoma City, South Portland, and Cary – totaling about 40,000 gross square-feet. In the whole of 2018, it opened 15 new outlets which marked a 50% expansion of the total store base.

The management’s sales projection for fiscal 2019 is between $645 million and $655 million. Full-year earnings are expected to be in the range of $0.74 per share to $0.80 per share and adjusted EBITDA in the $60-$64 million range. Capital expenditure is forecast to be between $40 million and $45 million. The company intends to open 15 new stores this year.

Related: Duluth Holdings Q3 2018 Earnings Conference Call Transcript

Having lost about 8% so far this year, Duluth Holdings shares closed Thursday’s trading session lower and dropped about 16% in the after-hours, following the earnings report.

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