Key Points – Duluth’s first-quarter loss narrowed as gross margin expanded sharply to 57.4%, helped by reduced promotions, pricing actions and sourcing improvements that outweighed tariff costs.
Adjusted EBITDA also improved to $2.6 million from a loss a year ago. – Revenue fell 4% to $98.6 million as the company deliberately pulled back on discounting, with direct-to-consumer sales weaker but retail store sales rising 3.3%
Management said the strategy is shifting sales toward higher-quality, full-price transactions rather than low-margin volume. – Inventory, costs and liquidity improved materially, with inventory down 24.8% year over year and net liquidity rising to about $100 million. Duluth also raised full-year adjusted EBITDA guidance to $28 million-$32 million while keeping net sales guidance unchanged. – The Technicals are Still Bullish for These 3 Small Caps Duluth (NASDAQ:DLTH) reported a narrower first-quarter loss and higher gross margins as management said its ongoing effort to reduce promotions, rationalize inventory and cut costs continued to reshape the apparel retailer’s financial profile. President and Chief Executive Officer Stephanie Pugliese said the company’s first-quarter fiscal 2026 results reflected a “rigorous strategic pivot” focused on restoring profitability, strengthening brand equity and emphasizing higher-quality revenue over low-margin sales volume. – Duluth Holdings Stock is Providing Opportunity “The deliberate actions we took throughout the past year and into the first quarter directly led to an enhanced gross margin, reduced inventory levels, improved overall profitability, and stronger net liquidity,” Pugliese said on the earnings call.
Sales Decline as Promotions Are Reduced Duluth reported first-quarter net sales of $98.6 million, down 4% from the prior year. Excluding the impact of wholesale, net sales declined 2.6%, according to Senior Vice President and Chief Financial Officer Heena Agrawal. Management attributed the sales…