Chilly weather pressures Destination XL in 1Q
Destination XL Group Inc.’s fiscal first-quarter net income dropped 57 percent as the men’s clothing and accessories company contended with a chilly spring and higher expenses.
President and chief executive David Levin said in a statement on Friday that while sales were weak in February and March, that was somewhat offset by better results in April when the weather started to warm up.
The Canton-based company earned $1 million, or 2 cents per share, for the three months ended May 4. A year earlier it earned $2.3 million, or 5 cents per share.
Revenue fell 2 percent to $93.6 million from $95.5 million.
Revenue at stores open at least a year, a key indicator of a retailer’s health, dipped 0.5 percent. This figure excludes results from stores recently opened or closed.
Sales from retail stores edged up 0.8 percent, while direct business fell 6 percent. The drop in direct sales was mostly due to a 60 percent drop in catalogs. That was somewhat offset by a 5.1 percent rise in online sales. To that end, Destination XL cut the number of catalogs it distributed and boosted its online marketing efforts.
Total expenses increased to $42.5 million from $41.4 million.
Destination XL — which caters to the big and tall — still expects full-year earnings will be about breakeven with revenue in a range of $415 million to $420 million.
The company, which had 54 stores at the quarter’s end, is in a transition phase. Levin said that it plans to open between 57 and 64 DXL stores in fiscal 2013, while closing between 110 and 119 Casual Male XL and Rochester stores.
Its shares finished at $4.94 on Thursday. They have traded in a 52-week range of $2.96 to $5.37.