Destination XL pushes into profit thanks to transformation initiatives
Canton, Massachusetts-based big and tall menswear retailer Destination XL Group, Inc. reported fourth-quarter earnings of $2.4 million, or $0.05 per diluted share, on Thursday, as the benefits of the company’s transformation strategy began to kick in.
Destination XL’s income for the fourth quarter ended February 1, 2020 represented significant progress compared to the loss of $7.2 million, or $0.15 per diluted share, reported by the company in the prior-year period.
Total quarterly sales were $131.24 million, increasing 0.07% from $131.15 million in the same period in the previous year. This growth reflected a 1.1% rise in comparable sales and a $2.1 million increase in wholesale revenues, partially offset by the negative impact of closed stores, amounting to $3.3 million.
In fiscal 2019, the company’s total sales increased 0.1% to $474.0 million, up from $473.8 million in the previous year, while comparable sales rose 0.1%. Closed stores had a negative impact of around $8.7 million on Destination XL’s annual sales.
The retailer’s full-year net loss was $7.8 million, or $0.16 per diluted share, compared with a net loss of $13.5 million, or $0.28 per diluted share, in fiscal 2018.
Over the course of the year, Destination XL reshuffled its management team and closed its unprofitable Rochester division as part of its ongoing transformation strategy. The company also completed its first full year with its new wholesale business.
On Wednesday, the company which owns the DXL Big + Tall and Casual Male XL, joined a growing list of North American retailers and announced the temporary closure of all its stores in the U.S. and Canada until March 28 in response to the coronavirus pandemic.
“Despite these recent developments, we reported that our fourth quarter continued to show improving comp sales which accelerated further after the holiday selling period,” said Destination XL CEO Harvey S. Kanter in a release. “DXL has made meaningful progress and while I remain energized by the potential for DXL’s future, given the fluid and volatile situation, I am both hopeful, but also cautiously optimistic for 2020.”
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