Destination XL Group, Inc. Announces Fourth Quarter and Full Year Sales Results and Provides Preliminary Earnings Estimate fo...
February 18 2020 - 7:00AM
Destination XL Group, Inc. (NASDAQ: DXLG), the largest omni-channel
specialty retailer of big and tall men’s clothing, today reported
sales results for the fourth quarter and fiscal year 2019 and
provided preliminary earnings for the fourth quarter of fiscal 2019
(unaudited).
- Total sales for the fourth quarter of approximately $131.2
million, an increase of $0.1 million from the prior year fourth
quarter; total sales for fiscal 2019 were approximately $474.0
million as compared to total sales of $473.8 million for fiscal
2018.
- Total comparable sales increased approximately 1.1% for the
fourth quarter which compares favorably to the 9-week holiday sales
period ended January 4, 2020 of 0.4%. Total comparable sales
for the year increased approximately 0.1%.
- Net income for the fourth quarter is expected to range from
$0.04 to $0.06 per diluted share as compared to the prior-year
fourth quarter’s net loss of $(0.15) per diluted share.
- On a non-GAAP basis, which excludes asset impairments, CEO
transition costs and corporate restructuring costs, and includes a
normalized tax rate, we expect net income for the fourth quarter to
range from $0.04 to $0.06 per diluted share, as compared to the
prior-year fourth quarter’s net loss of $(0.01) per diluted
share.
Management Comments
“We are pleased to report that the sales momentum we saw in the
9-week holiday sales period further accelerated in January.
Our fourth quarter comparable sales increased approximately 1.1%
compared to the 0.4% comparable sales increase we saw for the
holiday season. We are continuing to make progress with sales
growth, and we did so in the fourth quarter with a relatively
comparable promotional cadence. We expect our fourth quarter
financial results will be a positive reflection of that progress
which we will review in detail on March 19th,” said Harvey S.
Kanter, President and Chief Executive Officer.
“For fiscal 2019, we expect to report positive free cash flow
compared to our previous guidance for free cash flow to be
approximately break-even. Positive free cash flow, which is
reported after all capital expenditures, was used to reduce our
year-end debt balance and improve the balance sheet. In
addition, we expect to report a reduction in total inventory and
clearance inventory compared to last year-end. We are
confident that our existing credit facility provides us with
sufficient access to working capital to execute our strategic
plan. We have a $125 million revolving credit facility and a
$15 million FILO term loan, both of which are not set to expire
until May, 2023. We look forward to providing a comprehensive
review of our strategic priorities and our fiscal 2019 financial
results on our fourth quarter earnings call scheduled for March 19,
2020,” Kanter concluded.
Conference Call
The Company will hold a conference call to review its financial
results on Thursday, March 19, 2020 at 9:00 a.m. ET. To listen to
the live webcast, visit the "Investor Relations" section of the
Company's website. The live call also can be accessed by dialing:
(866) 680-2311. Please reference conference ID: 5948695. An
archived version of the webcast may be accessed by visiting the
"Events" section of the Company's website for up to one year.
During the conference call, the Company may discuss and answer
questions concerning business and financial developments and
trends. The Company’s responses to questions, as well as other
matters discussed during the conference call, may contain or
constitute information that has not been disclosed previously.
Note Regarding Preliminary Financial Performance
Estimates
The Company’s actual results for the fourth quarter remain
subject to the completion of its financial accounting closing
process, which includes review by its management and audit
committee. During the financial closing process, items may be
identified that would require the Company to make adjustments to
the preliminary earnings for the fourth quarter of fiscal 2019, and
such adjustments could be material. Additionally, the
Company’s earnings estimate for the fourth quarter of fiscal 2019
represents a forward-looking statement based solely on information
available to the Company as of the date of this release and may
differ materially from its actual operating results. Therefore,
shareholders should not place undue reliance on these preliminary
estimates. Non-GAAP Measures
In addition to financial measures prepared in accordance with
U.S. generally accepted accounting principles (“GAAP”), this press
release contains non-GAAP financial measures, including adjusted
net income (loss) per diluted share. The presentation of these
non-GAAP measures is not in accordance with GAAP, and should not be
considered superior to or as a substitute for net loss, net loss
per diluted share or any other measure of performance derived in
accordance with GAAP. In addition, not all companies calculate
non-GAAP financial measures in the same manner and, accordingly,
the non-GAAP measures presented in this release may not be
comparable to similar measures used by other companies. The Company
believes the inclusion of these non-GAAP measures help investors
gain a better understanding of the Company’s performance,
especially when comparing such results to previous periods, and
that they are useful as an additional means for investors to
evaluate the Company's operating results, when reviewed in
conjunction with the Company's GAAP financial statements.
Reconciliations of these non-GAAP measures to their comparable GAAP
measures are provided in the tables below.
The Company has fully reserved against its deferred tax assets
and, therefore, its net income (loss) is not reflective of earnings
assuming a “normal” tax position. In addition, we have added back
charges for asset impairments, CEO transition costs and corporate
restructuring charges, because it provides comparability of results
without these charges. Adjusted net income (loss) per diluted
share provides investors with a useful indication of the financial
performance of the business, on a comparative basis, assuming a
normalized effective tax rate of 26%.
About Destination XL Group, Inc.
Destination XL Group, Inc. is the largest retailer of men’s
clothing in sizes XL and up, with operations throughout the United
States as well as in Toronto, Canada. In addition to DXL Big + Tall
retail and outlet stores, subsidiaries of Destination XL Group,
Inc. also operate Casual Male XL retail and outlet stores, and an
e-commerce site, DXL.com. DXL.com offers a multi-channel
solution similar to the DXL store experience with the most
extensive selection of online products available anywhere for Big +
Tall men. The Company is headquartered in Canton, Massachusetts,
and its common stock is listed on the NASDAQ Global Market under
the symbol "DXLG." For more information, please visit the
Company's investor relations website: https://investor.dxl.com.
Forward-Looking Statements Certain statements
and information contained in this press release constitute
forward-looking statements under the federal securities laws,
including statements regarding the Company’s expectations for net
income per diluted share, adjusted net income per diluted share,
free cash flow, inventory level and an improved balance sheet in
fiscal 2019 and its expectations for sufficient access to working
capital in fiscal 2020. The discussion of forward-looking
information requires management of the Company to make certain
estimates and assumptions regarding the Company's strategic
direction and the effect of such plans on the Company's financial
results. The Company's actual results may differ materially from
forward-looking statements made by the Company. The Company
encourages readers of forward-looking information concerning the
Company to refer to its filings with the Securities and Exchange
Commission, including without limitation, its Annual Report on Form
10-K filed on March 22, 2019, that set forth certain risks and
uncertainties that may have an impact on future results and
direction of the Company, including risks relating to the Company’s
execution of its DXL strategy and ability to grow its market share,
predict customer tastes and fashion trends, forecast sales growth
trends and compete successfully in the United States men’s big and
tall apparel market.
Forward-looking statements contained in this press release speak
only as of the date of this release. Subsequent events or
circumstances occurring after such date may render these statements
incomplete or out of date. The Company undertakes no obligation and
expressly disclaims any duty to update such statements.
GAAP TO NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME (LOSS) PER
DILUTED SHARE |
|
(unaudited) |
|
Certain columns in the following table may not foot due to
rounding |
|
|
|
|
|
For the three months ended |
|
|
February 1, 2020 |
|
|
February 2, 2019 |
|
|
|
|
|
|
|
|
|
Net
income (loss) per diluted share, on a GAAP basis |
$0.04 - $0.06 |
|
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
|
Add back:
Impairment of assets, CEO transition |
|
|
|
|
|
|
|
costs, corporate restructuring costs and actual tax provision
(benefit) |
$0.02 |
|
|
$ |
0.13 |
|
Adjusted net
income (loss) before income taxes |
$0.05 - $0.07 |
|
|
$ |
(0.02 |
) |
Income tax
provision (benefit), assuming normalized tax rate of 26% |
|
$0.02 |
|
|
$ |
(0.00 |
) |
Adjusted
net income (loss) per diluted share, non-GAAP basis |
$0.04 - $0.06 |
|
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
Weighted average
number of common shares |
|
|
|
|
|
|
|
outstanding on a diluted basis (in millions) |
|
50.8 |
|
|
|
49.5 |
|
Investor Contact:ICR, Inc.Tom Filandro646-277-1200
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