Analysts At Baird Impressed With Duluth Holdings

Baird reiterated its Outperform rating and $29 price target on Duluth Holdings Inc DLTH saying the company's growth profile is supported by whitespace opportunity in multiple areas that include new customer acquisition, merchandising enhancements, and retail buildout.

"Importantly, women's provides particular potential across each of these drivers, and in our opinion, recent women's marketing/merchandising enhancements increase visibility to robust longer-term goals," analyst Jonathan Komp wrote in a note.

"With greater visibility to women's as a key driver – both near term for FQ2 and longer term as the penetration grows – and broader brand momentum seemingly strong," Komp added.

Since adding women's in 2005, Duluth successfully has evolved to its current broadly appealing, dual-gender lifestyle brand. Women's business accounted for 20 percent to total revenues in 2015.

"Reaching the targeted 30-35% sales mix by F2019 implies a 30%+ top-line CAGR and nearly ~$200 million of revenue, which still would be smaller than men's for DLTH today, illustrating the opportunity," Komp highlighted.

The analyst said he has seen the second quarter internet search activity for Duluth women's accelerate (up >60 percent). Komp noted that this, if correlated with women's sales growth, could help the company to reach his consolidated revenue growth target of +18.9 percent with relatively modest growth (about 10 percent) for men's direct.

At time of writing, shares of Duluth rose 2.17 percent to $23.96.