Raymond James Cuts Duluth Holdings Estimates After Q4 Miss

Shares of Duluth Holdings Inc DLTH could come under pressure following weak fourth-quarter results and disappointing 2019 guidance, according to Raymond James.

The Analyst

Raymond James' Dan Wewer maintains a Market Perform on Duluth Holdings.

The Thesis

The niche apparel maker reported fourth-quarter EPS of 64 cents Thursday, meaningfully below the consensus estimate of 75 cents.

Almost every line item in the company's fourth-quarter results was below expectations, Wewer said in a Thursday note. 

Total revenue came in at $250.5 million, representing 15-percent growth and missing the consensus forecast of 18.5-percent growth.

Retail sales growth was particularly disappointing at 38.9 percent, well below the consensus view of 54.7 percent, the analyst said. 

The weak retail performance will trigger renewed investor concerns around the productivity of the company's new store rollout, Wewer said. 

Duluth is being weighed down by both company-specific issues and a challenging
macro environment, the analyst said. These pressures have continued so far in the first quarter, which is also being adversely impacted by unfavorable weather conditions, he said. 

Raymond James expects these challenges to continue at least through the first half of 2019.

The research firm lowered its revenue and EPS estimates for 2019 from $680 million to $648 million and from $1.04 to 75 cents, respectively.

The firm's EPS estimate for 2020 was reduced from $1.29 to 98 cents. 

Price Action

Duluth Holdings shares were plummeting 23.45 percent to $18.02 at the time of publication Friday. 

Related Links:

DA Davidson Upgrades Duluth Holdings After Pullback, Says Top-Line Growth Ahead

Benzinga's Top Upgrades, Downgrades For April 5, 2019

Photo by Tony Webster/Wikimedia.