Destination XL sales stagnate in Q1

By

Robin Driver

Published
May 24, 2019

Canton, Massachusetts-based specialty big and tall menswear retailer Destination XL Group, Inc. announced a 0.3% decline in first-quarter sales on Friday, as moderate progress in wholesale was offset by store closures and slipping comps.

 
For the first quarter ended May 4, 2019, the company reported net sales of $113.0 million, down $0.3 million from $113.3 million in the prior-year period. This decline was driven by a comparable sales decrease of 1.2% and further impacted by the loss of around $1.6 million in revenue due to store closures.
 
Destination XL’s quarterly wholesale revenue did, however, increase by $2.4 million year over year.

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The retailer’s net loss for the quarter remained flat at $3.1 million or $0.06 per diluted share.
 
“Our business performance is off to a difficult start as we struggled with disappointing sales in the first quarter,” commented Destination XL President and CEO Harvey S. Kanter in a release. “We saw declines in traffic in both stores and on the web which we primarily attributed to severe winter weather in the first half of the quarter and the delayed arrival of warm spring weather in the second half of the quarter.”
 
“We have not yet seen the sales build in our seasonal merchandise categories that we typically see in the first quarter which we believe indicates he just isn’t ready to shop yet.  Nonetheless, our assortments are in great shape and our associates are ready to service our guests once the seasonal traffic starts to build,” continued Kanter, who stepped into his role in April 1, 2019.
 
The new CEO went on to highlight the company’s strategic priorities moving forward, namely growing its customer file and focusing on retention and acquisition. He also committed to providing more detailed plans in the coming months.
 
Over the course of the first quarter, the retailer, which owns the DXL Men’s Clothing, Rochester Clothing and Casual Male XL banners, closed a total of four stores and now operates a total of 328 locations. By the end of fiscal 2019 this figure is expected to be 323, as the company proceeds with further closures.
 
Due to the recent CEO transition and the implementation of a series of new operational initiatives, Destination XL will not be providing a financial outlook for the full fiscal year until it has better assessed the effectiveness of the changes in its business.