Net Income improvement over prior year driven by gross margin expansion
Continued improvement in working capital driven by a 15.5% reduction in inventory
Strong balance sheet with approximately $96 million of net liquidity and zero debt on the Asset Based Lending facility
MOUNT HOREB, Wis., Sept. 03, 2026 (GLOBE NEWSWIRE) -- Duluth Holdings Inc. (dba, Duluth Trading Company) (“Duluth Trading” or the “Company”) (NASDAQ: DLTH), a lifestyle brand of men’s and women’s workwear, casual wear, outdoor apparel and accessories, today announced its financial results for the fiscal Second Quarter ended August 2, 2026.
Summary of the Second Quarter ended August 2, 2026
- Net income of $18.4 million compared to net income of $1.3 million in the prior year second quarter. This includes the impact of $16.3 million in tariff refunds.
- Reported and adjusted EPS1 of $0.50. This includes a $0.44 impact from tariff refunds.
- Adjusted EBITDA2 of $27.0 million compared to $12.0 million in the prior year second quarter. This includes the impact of $16.3 million in tariff refunds.
- Inventory down $22.9 million or 15.5% vs. last year.
- Cash and cash equivalents of $26.8 million with net liquidity of $96.1 million.
1See Reconciliation of net income to adjusted net income and EPS to adjusted EPS in the accompanying financial tables.
2See Reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA in the accompanying financial tables.
Management Commentary
President and CEO Stephanie Pugliese stated, “Our second quarter performance demonstrates strong execution of our operational priorities, inventory discipline, and successful promotional reset. By combining gross margin expansion with effective inventory management, we have delivered another quarter of improved profitability and free cash flow. Our core products continue to lead the way with customers responding favorably to our high-quality, solution-based workwear.”
Pugliese added, “As we enter the second half of the year, we are excited about our enhanced product offering including our new Hellbent work pants, No Quit utility shirts, and Heirloom prints. We remain focused in advancing our ‘Build to Last’ strategy, maximizing channel productivity, and consistently delivering an exceptional customer experience.”
Operating Results for the Second Quarter ended August 2, 2026
Net sales decreased by $10.3 million, or 7.8%, to $121.4 million for the three months ended August 2, 2026 compared to $131.7 million in the three months ended August 3, 2025. Direct-to-consumer net sales decreased by 11.5% to $70.1 million due to declines in web traffic and web conversion as a result of reduced promotional activity partially offset by higher average order values. Retail store net sales decreased by 2.4% to $51.3 million driven by lower traffic, partially offset by higher average order values in comparable stores, coupled with two new stores opened in the third quarter of 2025.
Gross margin expanded by 1,810 basis points to 72.8% of net sales in the three months ended August 2, 2026, compared to 54.7% of net sales in the three months ended August 3, 2025. We recorded a reduction to cost of goods sold of $16.0 million related to refunds of previously incurred tariff charges. Excluding the impact of tariff refunds, gross margin was 59.6% in the three months ended August 2, 2026, an expansion of 490 basis points compared to the prior year. This increase in gross margin rate was primarily driven by an increase in average unit retail prices from reduced promotional activity, coupled with an improvement in product costs from our direct to factory sourcing initiative.
Selling, general and administrative expenses increased $0.7 million, or 1.1%, to $69.5 million in the three months ended August 2, 2026 compared to $68.8 million in the three months ended August 3, 2025. Selling, general and administrative expenses as a percentage of net sales increased by 510 basis points to 57.3% in the three months ended August 2, 2026, compared to 52.2% in the three months ended August 3, 2025. The increase in selling, general and administrative expenses as a percentage of net sales was mainly driven by an increase in advertising and shipping expenses, which was partially offset by leverage in variable expenses in our fulfillment centers and stores coupled with lower overhead expenses.
Balance Sheet and Liquidity
The Company ended the quarter with $26.8 million of cash and cash equivalents, $85.7 million of net working capital, and zero outstanding debt on the $70.0 million Asset Based Lending facility resulting in approximately $96 million of net liquidity.
Fiscal 2026 Outlook
For Fiscal 2026, the Company is:
- Affirming previously issued fiscal 2026 net sales guidance range of $540 million to $560 million
- Raising previously issued fiscal 2026 Adjusted EBITDA1 guidance to $38 million to $42 million compared to the previous guidance of $28 million to $32 million, including the impact of tariff refunds
- Affirming capital expenditures, inclusive of software hosting implementation costs, of approximately $12 million
1See Reconciliation of Forecasted Net Income to Forecasted EBITDA and Forecasted EBITDA to Forecasted Adjusted EBITDA in the accompanying financial tables.
Conference Call Information
A conference call and audio webcast with analysts and investors will be held on Thursday, September 3, 2026, at 9:30 am Eastern Time to discuss the results and answer questions.
Links to access earnings information:
- Live Webcast: https://edge.media-server.com/mmc/p/ikonm7ds/
- Live Call: https://register-conf.media-server.com/register/BI318a2d17c9bf472ab0e924ba22a6be55
- Webcast Archive: https://ir.duluthtrading.com/news-and-events/event-calendar
About Duluth Trading
Duluth Trading is a lifestyle brand for the Modern, Self-Reliant American. Based in Mount Horeb, Wisconsin, we offer high quality, solution-based workwear, casual wear, outdoor apparel and accessories for men and women who lead a hands-on lifestyle and who value a job well-done. We provide our customers an engaging and entertaining experience. Our marketing incorporates humor and storytelling that conveys the uniqueness of our products in a distinctive, fun way, and are available through our content-rich website, catalogs, and “store like no other” retail locations. We are committed to outstanding customer service backed by our “No Bull Guarantee” - if it’s not right, we’ll fix it. Visit our website at http://www.duluthtrading.com.
Non-GAAP Measurements
Management believes that non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Within this release, including the tables attached hereto, reference is made to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), Adjusted Net Income (Loss), Adjusted EPS, and Forecasted Adjusted EBITDA. See attached table “Reconciliation of Net Income (Loss) to EBITDA and EBITDA to Adjusted EBITDA,” for a reconciliation of net income (loss) to EBITDA and EBITDA to Adjusted EBITDA and “Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and EPS to Adjusted EPS” for a reconciliation of net income (loss) to adjusted net income (loss) and EPS to adjusted EPS for the three and six months ended August 2, 2026 and August 3, 2025. Also see attached table “Reconciliation of Forecasted Net Income (Loss) to Forecasted EBITDA and Forecasted EBITDA to Forecasted Adjusted EBITDA” for a reconciliation of forecasted Adjusted EBITDA for Fiscal 2026.
Adjusted EBITDA is a metric used by management and frequently used by the financial community, which provides insight into an organization’s operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA excludes certain other items, which include significant non-cash items, and other charges or benefits resulting from transactions or events that are highly variable, significant in size, and that we do not believe are indicative of ongoing or future business operations.
Adjusted Net Income (Loss) and Adjusted EPS are metrics used by management and frequently used by the financial community, which provides insight into the effectiveness of our business strategies and to compare our performance against that of peer companies. Adjusted Net Income (Loss) and Adjusted EPS exclude restructuring expenses and impairment expenses that are not comparable from period to period.
The Company provides this information to investors to assist in comparisons of past, present and future operating results and to assist in highlighting the results of on-going operations. While the Company’s management believes that non-GAAP measurements are useful supplemental information, such adjusted results are not intended to replace the Company’s GAAP financial results and should be read in conjunction with those GAAP results.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts included in this press release, including statements concerning Duluth Trading’s plans, objectives, goals, beliefs, business strategies, future events, business conditions, its results of operations, financial position and its business outlook, business trends and certain other information herein, including statements under the heading “Fiscal 2026 Outlook” are forward-looking statements. You can identify forward-looking statements by the use of words such as “may,” ”might,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “believe,” “estimate,” “project,” “target,” “predict,” “intend,” “future,” “budget,” “goals,” “potential,” “continue,” “design,” “objective,” “forecasted,” “would” and other similar expressions. The forward-looking statements are not historical facts, and are based upon Duluth Trading’s current expectations, beliefs, estimates, and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond Duluth Trading’s control. Duluth Trading’s expectations, beliefs and projections are expressed in good faith, and Duluth Trading believes there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates, and projections will be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements, including, among others, the risks, uncertainties, and factors set forth under Part 1, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on March 20, 2026 and other factors as may be periodically described in Duluth Trading’s subsequent filings with the SEC. These risks and uncertainties include, but are not limited to, the following: the impact of inflation and measures to control inflation on our results of operations; the prolonged effects of economic uncertainties on store and website traffic; the susceptibility of the price and availability of our merchandise to international trade conditions including tariffs; changes in U.S. and non-U.S. laws affecting the importation and taxation of goods, including imposition of unilateral tariffs on imported goods; our ability to secure the personal and/or financial information of our customers and employees; disruptions to our distribution network, supply chains and operations; failure to effectively manage inventory levels; our ability to maintain and enhance a strong brand and sub-brand image; adapting to declines in consumer confidence, inflation and decreases in consumer spending; disruptions to our e-commerce platform; our ability to meet customer delivery time expectations; our ability to properly allocate inventory throughout our distribution network to fulfill customer demand; our failure to meet our debt covenant ratios; natural disasters, unusually adverse weather conditions, boycotts, prolonged public health crises, epidemics or pandemics and unanticipated events; generating adequate cash from our existing stores and direct sales to support our growth; the impact of changes in corporate tax regulations and sales tax; identifying and responding to new and changing customer preferences; the success of the locations in which our stores are located; effectively relying on sources for merchandise located in foreign markets; transportation delays and interruptions, including port congestion; our inability to timely and effectively obtain shipments of products from our suppliers and deliver merchandise to our customers; the inability to maintain the performance of our maturing store portfolio; our inability to deploy marketing tactics and commit adequate resources to support marketing in order to retain and attract new customers; our ability to successfully open new stores; effectively adapting to new challenges associated with our expansion into new geographic markets; competing effectively in an environment of intense competition or elevated promotions; our ability to adapt to significant changes in sales due to the seasonality of our business; price reductions or inventory shortages resulting from failure to purchase the appropriate amount of inventory in advance of the season in which it will be sold; the potential for further increases in price and lack of availability of raw materials; our dependence on third-party vendors to provide us with sufficient quantities of merchandise at acceptable prices; failure of our vendors and their manufacturing sources to use acceptable labor or other practices; our dependence upon key executive management or our inability to hire or retain the talent required for our business; increases in costs of fuel or other energy, transportation or utility costs and in the costs of labor and employment; failure of our information technology systems to support our current and growing business, before and after our planned upgrades; disruptions in our supply chain and fulfillment centers; our inability to protect our trademarks or other intellectual property rights; infringement on the intellectual property of third parties; acts of war, terrorism or civil unrest; the impact of governmental laws and regulations and the outcomes of legal proceedings; failure to comply with data privacy regulation; our ability to comply with the security standards for the credit card industry; our failure to maintain adequate internal controls over our financial and management systems; acquisition, disposition, and development risks; and other factors that may be disclosed in our SEC filings or otherwise. Forward-looking statements speak only as of the date the statements are made. Duluth Trading assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances or other changes affecting forward-looking information except to the extent required by applicable securities laws.
Investor Contacts:
Heena Agrawal
Senior Vice President and Chief Financial Officer
Chris Steffes
Senior Director of Financial Planning and Analysis
Email: IR@duluthtrading.com
(Tables Follow)
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands) August 2, 2026 February 1, 2026 August 3, 2025 ASSETS Current assets: Cash and cash equivalents26,799 16,345 5,738 Receivables2,127 2,710 8,894 Inventory, net125,152 131,342 148,051 Prepaid expenses & other current assets28,863 21,654 23,249 Total current assets182,941 172,051 185,932 Property and equipment, net87,755 96,913 103,224 Operating lease right-of-use assets82,762 89,283 97,361 Finance lease right-of-use assets, net27,889 29,577 31,267 Available-for-sale security4,534 4,763 4,834 Other assets, net8,165 10,022 11,182 Total assets394,046 402,609 433,800 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable47,322 48,226 43,598 Accrued expenses and other current liabilities29,481 39,871 33,257 Current portion of operating lease liabilities16,656 16,449 16,147 Current portion of finance lease liabilities2,742 2,681 2,616 Line of credit— — 32,457 Current maturities of TRI long-term debt(1)1,066 1,020 975 Total current liabilities97,267 108,247 129,050 Operating lease liabilities, less current maturities71,247 76,008 83,638 Finance lease liabilities, less current maturities26,554 27,940 29,295 TRI long-term debt, less current maturities(1)22,829 23,337 23,821 Deferred tax liabilities962 962 938 Total liabilities218,859 236,494 266,742 Shareholders' equity: Treasury stock(3,783) (2,922) (2,922)Capital stock112,473 110,794 109,499 Retained earnings69,593 61,332 63,689 Accumulated other comprehensive loss, net(342) (231) (272)Total shareholders' equity of Duluth Holdings Inc.177,941 168,973 169,994 Noncontrolling interest(2,754) (2,858) (2,936)Total shareholders' equity175,187 166,115 167,058 Total liabilities and shareholders' equity394,046 402,609 433,800
__________________________
(1) Represents debt of the variable interest entity, TRI Holdings, LLC, that is consolidated in accordance with ASC 810, Consolidation. Duluth Holdings Inc. is not the guarantor nor the obligor of this debt.
Consolidated Statements of Operations
(Unaudited)
(Amounts in thousands, except per share figures) Three Months Ended Six Months Ended August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 Net sales$121,389 $131,716 $219,983 $234,420 Cost of goods sold (excluding depreciation and amortization) 33,028 59,697 74,988 109,046 Gross profit 88,361 72,019 144,995 125,374 Selling, general and administrative expenses 69,515 68,767 131,317 133,925 Impairment of long-lived assets — — 2,709 549 Restructuring expense — 850 1,354 850 Operating income (loss) 18,846 2,402 9,615 (9,950)Interest expense 768 1,469 1,558 2,950 Other income (loss), net 396 (82) 489 (243)Income (loss) before income taxes 18,474 851 8,546 (13,143)Income tax expense (benefit) 61 (442) 181 828 Net income (loss) 18,413 1,293 8,365 (13,971)Less: Net income attributable to noncontrolling interest 51 32 104 61 Net income (loss) attributable to controlling interest$18,362 $1,261 $8,261 $(14,032)Basic earnings per share (Class A and Class B): Weighted average shares of common stock outstanding 35,272 34,448 34,997 34,081 Net income (loss) per share attributable to controlling
interest$0.52 $0.04 $0.24 $(0.41)Diluted earnings per share (Class A and Class B): Weighted average shares and equivalents outstanding 36,381 34,656 36,407 34,081 Net income (loss) per share attributable to controlling
interest$0.50 $0.04 $0.23 $(0.41)
Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands)
Six Months Ended August 2, 2026 August 3, 2025 Cash flows from operating activities: Net income (loss)$8,365 $(13,971)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 11,422 13,294 Stock based compensation 1,622 1,348 Impairment of long-lived assets 2,709 549 Deferred income taxes — 938 Loss on disposal of property and equipment 1,406 905 Non-cash lease expense 8,053 7,992 Changes in operating assets and liabilities: Receivables 583 (4,924)Inventory 6,190 18,494 Prepaid expense & other current assets (5,835) (3,281)Software hosting implementation costs, net 239 (4,652)Trade accounts payable (921) (30,731)Accrued expenses and other current liabilities (9,497) (2,560)Operating lease liabilities (8,101) (7,660)Other assets (780) (177)Net cash provided by (used in) operating activities 15,455 (24,436)Cash flows from investing activities: Purchases of property and equipment (2,495) (3,572)Principal receipts from available-for-sale security 118 107 Net cash used in investing activities (2,377) (3,465)Cash flows from financing activities: Proceeds from line of credit 18,699 76,247 Payments on line of credit (18,699) (43,790)Payments on TRI long-term debt (495) (454)Payments on finance lease obligations (1,325) (1,251)Payments of tax withholding on vested restricted shares (861) (590)Other 57 142 Net cash provided by (used in) financing activities (2,624) 30,304 Increase in cash and cash equivalents 10,454 2,403 Cash and cash equivalents at beginning of period 16,345 3,335 Cash and cash equivalents at end of period$26,799 $5,738 Supplemental disclosure of cash flow information: Interest paid$1,558 $2,950 Income taxes paid$— $— Supplemental disclosure of non-cash information: Unpaid liability to acquire property and equipment$188 $1,801
Reconciliation of Net Income (Loss) to EBITDA and EBITDA to Adjusted EBITDA
(Unaudited)
Three Months Ended Six Months Ended August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 (in thousands) Net income (loss)$18,413 $1,293 $8,365 $(13,971)Depreciation and amortization 5,644 6,545 11,422 13,294 Amortization of internal-use software hosting subscription implementation costs 1,088 1,111 2,196 2,240 Interest expense 768 1,469 1,558 2,950 Income tax expense (benefit) 61 (442) 181 828 EBITDA$25,974 $9,976 $23,722 $5,341 Long-term incentive expense 1,046 1,173 1,870 1,466 Impairment expense — — 2,709 549 Restructuring expense — 850 1,354 850 Adjusted EBITDA$27,020 $11,999 $29,655 $8,206
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and EPS to Adjusted EPS
(Unaudited) Three Months Ended Six Months Ended August 2, 2026 August 3, 2025 August 2, 2026 August 3, 2025 (in thousands, except per share amounts)Amount Per share Amount Per share Amount Per share Amount Per share Net income (loss) attributable to controlling interest$18,362 $0.50 $1,261 $0.04 $8,261 $0.23 $(14,032)$(0.41)Plus: Restructuring expenses - - 850 0.03 1,354 0.04 850 0.02 Plus: Impairment expenses - - - - 2,709 0.07 549 0.02 Income tax effect of adjustments(1) - - (196) (0.01) (934) (0.03) (322) (0.01)Adjusted net income (loss) attributable to controlling interest$18,362 $0.50 $1,915 $0.06 $11,390 $0.31 $(12,955)$(0.38)
__________________________
(1) The income tax effects of adjustments are calculated using the Company’s estimated 23% tax rate
Reconciliation of Forecasted Net Income (Loss) to Forecasted EBITDA and Forecasted EBITDA to Forecasted Adjusted EBITDA
(Unaudited)
ForecastedLow High Net income (loss)$(2,950) $1,350 Depreciation and amortization 24,200 24,200 Amortization of internal-use software hosting subscription implementation costs 4,500 4,500 Interest expense 3,800 3,500 Income tax expense 487 487 EBITDA$30,037 $34,037 Long-term incentive expense 3,900 3,900 Impairment expense 2,709 2,709 Restructuring expense 1,354 1,354 Adjusted EBITDA$38,000 $42,000
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/bee05309-9d69-4426-8889-86a226ba28a5