Destination XL Group, Inc. (NASDAQ:DXLG) shares are trading lower after the company reported Q3 net sales of $119.19 million, missing the analyst consensus of $120.75 million. Sales were down 8.1%.
Comparable sales for the third quarter decreased 6.7% Y/Y as the company saw a slowdown in store traffic and dollars per transaction as the economy and inflationary pressures negatively impacted consumer spending.
The company reported quarterly adjusted EPS of $0.07, in line with the street view.
Sales were particularly softer in categories that outperformed last year due to a resurgence of back-to-work and social events.
The quarterly gross margin rate, including occupancy costs, was 47.5% compared to a gross margin rate of 50.0% in the year-ago quarter.
Adjusted EBITDA for Q3 was $8.6 million compared to $16.4 million a year ago. Adjusted EBITDA margin is 7.3%, compared with 12.7% a year ago.
The company exited the quarter with cash and investments of $60.4 million. As of October 28, 2023, the company's inventory decreased by approximately $7 million to $99.9 million on a Y/Y basis.
Outlook Lowered: Destination XL Group expects full-year sales of $520.0 million-$530.0 million versus a $534.90 million estimate (prior outlook: $535.0 million-$545.0 million).
The company sees Adjusted EPS Of $0.45-$0.52 versus the $0.54 estimate (prior view: $0.51-$0.59)
Price Action: DXLG shares are trading lower by 7.90% to $4.32 on the last check Friday.
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