Destination XL narrows losses; makes corporate personnel cuts

By

Robin Driver

Published
Sep 1, 2018

Destination XL Group, Inc. reported improvements in revenues and net loss in the second quarter as the Canton, Massachusetts-based speciality big-and-tall menswear retailer continues to execute new strategic initiatives.

 
For the second quarter ended August 4, 2018, the company announced net sales of $122.2 million, up 0.9% from the $121.1 million reported by the retailer in Q2 2017, while comparable sales rose 3.3%.

Pushed by this progress, net loss narrowed to $1.2 million, compared to $3.7 million in the prior-year period.

“We are pleased to report our third consecutive quarter of positive comparable sales growth with a second quarter increase of 3.3%. The performance was broad-based across channels and all regions of the country and was achieved with 8.4% less inventory than we had a year ago,” said Destination XL President and CEO David Levin in a release. “This was another quarter of successful execution against our strategic initiatives and we are well positioned for continued progress in the second half.”
 
As part of its corporate restructuring plan, the company eliminated 56 positions during the quarter, representing 15% of its corporate work force. As a result of these actions, Destination XL expects to be impacted by around $1.8 million in charges, $1.6 million of which were incurred in Q2, mainly due to employee severance and one-time termination benefits. Moving forward, the retailer expects that the cuts will result in $5.6 million in savings in fiscal 2018 and a further $10.3 million on an annualized basis thereafter.
 
In the first six months of fiscal 2018, Destination XL’s net sales hit $235.5 million, up from $228.8 million in the same period in the previous year, while net loss reduced to $4.3million from $9.8 million.
 
The company has reaffirmed its guidance for fiscal 2018, which predicts net sales of between $462.0 million and $472.0 million, pushed by a comps increase of around 1% to 3%. Net loss is expected to total between $13.2 million and $18.2 million.