Destination XL Reports Soft Holiday Results01/11/2021
The holidays were not especially happy for Destination XL Group.
The men’s big and tall retailer reported Monday that for the nine weeks ended Jan. 2, comparable-store sales dropped 24 percent due to a fall of 38.1 percent in the company’s brick-and-mortar locations that could not be offset by an increase of 12.7 percent in comparable-store sales in online and third-party marketplace sales. The DXL web site was a bright spot in the period, however, with comparable-store sales increases of 28.4 percent.
Overall sales fell 23.9 percent to $78.4 million compared to $103.1 million for the nine-week holiday sales period ended Jan. 4.
Based on these results and the expectations for the remainder of the fourth quarter, the company said it is now projecting total sales for fiscal 2020 of $317 million to $319 million, with comparable sales in the omnichannel retail business for the full year down 32.6 percent to 32.9 percent. The company also expects adjusted EBITDA to come in at a loss of of $26 million to $27 million and free cash flow for the full year to be at a loss of $4 million to $6 million.
Even so, Harvey Kanter, president and chief executive officer, is expecting the situation to get better as 2021 goes on.
“As we near the end of fiscal 2020, we look forward to the greater opportunities now ahead in fiscal 2021, having successfully accelerated our digital transformation and substantially increased our operating leverage during the pandemic,” he said. “We believe that demand for apparel will gradually improve in fiscal 2021 and we look forward to serving our customer wherever and whenever he is ready to shop with us.”
Kanter said plans for this fiscal year include expected sales of about $385 million to $402 million, adjusted EBITDA of about $11 to $18 million and positive free cash flow. “We expect to achieve these results through continued penetration of our direct business, a modest recovery in store traffic during the course of the year, and a slight improvement in our wholesale business. We expect a 10.8 percent to 14.8 percent decline in comparable sales from fiscal 2019 levels, with comparable-store sales down 23.8 percent to 27.8 percent and our direct business up 26.9 percent to 30 percent,” Kanter projected.
The company will report fourth quarter and fiscal 2020 results on March 18.
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