Destination XL sales drop 38%
Big and tall menswear retailer Destination XL Group, Inc. announced a year-over-year decline of 38.0% in its second-quarter sales on Thursday, as strong e-commerce sales failed to offset decreases in brick-and-mortar revenues related to the coronavirus pandemic.
For the second quarter ended August 1, 2020, the Canton, Massachusetts-based company reported total sales of $76.4 million, down from $123.2 million in the prior-year period. The retailer, which operates both retail and outlet stores under the DXL and Casual Male XL banners, temporarily closed its brick-and-mortar locations due to the Covid-19 crisis but was able to reopen all stores by the end of June.
Destination XL saw a “material shift” towards online shopping during the second quarter, with sales on the retailer’s dxl.com platform increasing 69%, bringing direct sales penetration up to 46.1% of total retail sales.
Quarterly revenues in the company’s wholesale channel totaled $5.0 million, up from $2.7 million in the same period in the previous year, thanks largely to the sale of $4.1 million in protective masks.
Net loss was $10.7 million, or $0.21 per diluted share, compared with net income of $0.0 million, or $0.00 per diluted share, in the prior-year period.
“Our second quarter performance was better than we anticipated, driven by our dxl.com website’s 69% growth and opening stores sooner than initially expected,” said Destination XL president and CEO Harvey Kanter in a release. “Although this performance permits us to be cautiously optimistic, we remain exposed to the ongoing challenges brought on by the Covid-19 pandemic.”
In the first six months of fiscal 2020, Destination XL’s sales totaled $133.7 million, down from $236.2 million in the first half of fiscal 2019. The company’s net loss for the period was $52.4 million, or $1.03 per share, compared to a loss of $3.0 million, or $0.06 per share.
In order to deal with the challenges posed by the Covid-19 pandemic, Destination XL was proactive in managing its liquidity throughout the second quarter and worked closely with landlords to obtain short-term accommodations during store closures.
Most of the company’s associates were furloughed in the first quarter and gradually returned to work in the second. Ultimately, 430 associates – mostly store staff – were permanently laid off as Destination XL worked to align its field organization with its reduced sales base.
The company, which currently operates 317 stores across the U.S. and in Toronto, Canada, did not provide financial guidance for the third quarter or full fiscal year 2020.
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