Destination XL (DXLG) 2026 財年第二季財報電話會議：隨著銷售額降幅收窄，EBITDA 上升

重點摘要

• 淨銷售額年減 3.4% 至 1.116 億美元，同店銷售下滑 3.5%。月度同店銷售表現逐月改善，從 5 月的 -5.7% 改善至 6 月的 -2.8% 與 7 月的 -1.9%。
• 調整後 EBITDA 從去年同期的 470 萬美元增至 770 萬美元（占銷售額的 6.9%）。調整後每股盈餘 (EPS) 從 0.01 美元升至 0.05 美元。
• 毛利率增加 270 個基點至 47.9%，主要歸因於 460 萬美元的 IEPA 關稅退款。若扣除該筆退款，商品毛利率將年減約 70 個基點。
• 門市客流量仍是 DXL 最大的營運挑戰。強勁的轉換率與客單價部分抵銷了此壓力，而直營管道的轉換率則受益於 App 與網站的改進。
• DXL 在本季度末擁有 2010 萬美元的現金與投資，無債務，且擁有 6170 萬美元的可調度資金（超額可用額度）。
• 董事會撤回先前對擬議 Full Beauty 合併案的支持，並一致建議股東投票反對股票發行案，理由是 Full Beauty 業績惡化、債務升高以及潛在的股權稀釋。

關鍵財務數據

業務與營運表現

DXL 報告稱同店銷售趨勢持續逐月改善，但門市客流量依然疲軟。管理層表示，轉換率與客單價保持強勁，有助於抵銷來客數減少的影響。顧客調查將客流軟著陸歸因於減重計畫、消費優先順序改變以及延後購買服飾。

直營業務的表現優於實體門市。關鍵字廣告、付費社群媒體與程式化行銷支撐了需求，而更快的網站載入速度與 App 改進提升了轉換率。DXL 正平衡新客獲取與舊客（或流失顧客）重新互動之間的支出，不過管理層承認，獲客與喚醒舊客的進度仍低於預期目標。

該公司的「適合成長」(Fit for Growth) 策略圍繞四大核心優先事項：強化剪裁主導地位、擴展自有品牌、提升品牌知名度以及獲取新顧客。FitMap 已掃描超過 15 萬名顧客。管理層表示，經過掃描的顧客比未掃描顧客展現出更高的轉換率、更高的平均訂單金額、更多的到訪次數以及更低的退貨率。

自有品牌的滲透率持續提高。今年迄今 ThermaChill 產品的需求較去年同期增長 56%。DXL 還將 Harbor Bay 著重為入門價格品牌，並採用更多具針對性、特定產品的促銷活動，而非全面大打折。

在家庭年收入超過 10 萬美元、年齡介於 35 至 64 歲的 DXL 核心受眾中，品牌知名度在七個月內從 40% 提升至 49%。該公司正在重新分配而非增加廣告預算，轉向建立更均衡的行銷漏斗，包括 YouTube 與程式化行銷測試。

管理層展望

管理層表示，已看到銷售恢復成長的曙光，同時強調客流量與顧客獲取仍是核心挑戰。

DXL 正重新檢視其門市佈局，以提高每平方英尺銷售額與單店盈利率。門市合理化預計對 2026 財年的影響有限，但據管理層表示，應能從 2027 財年起降低租金負擔與門市營運成本。

該公司亦在保留營運資金並暫停非必要的現金支出。必要的技術與物流中心投資將持續進行，但部分軟體升級可能會延後，直到同店銷售趨勢更加穩定。

風險與關注焦點

• 儘管月度同店銷售趨勢有所改善，但門市客流量仍是 DXL 最嚴峻的營運挑戰。
• 新顧客獲取與舊客喚醒進度低於管理層預期。
• 使用 GLP-1 減重藥物可能會在顧客過渡尺寸期間延後購買服飾。管理層表示，許多受訪使用者表示將在體重穩定後重返 DXL。
• 若扣除關稅退款，由於滯銷季節性產品折價增加以及燃油附加費推高運輸成本，商品毛利率將下降約 70 個基點。
• DXL 董事會指出，在當前條款下，Full Beauty 合併案帶來更高的財務與股權稀釋風險。

分析師問答集錦

管理層表示，預計在 2026 財年關閉 3 家門市。次年將有數十份租約到期需要續約，但 DXL 強調，這些地點將單獨進行評估，並非全部都是關店對象。公司將專注於銷售額有潛力轉移至附近 DXL 門市的市場。

在資本支出方面，管理層表示，大部分投資用於技術升級與物流中心，較少資金分配給門市。DXL 可能會延後非立即需要的升級以保留現金，直到同店銷售趨勢穩定。

電話會議完整逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Thank you. Good day, everyone, and welcome to Destination XL Group, Inc.'s conference call to discuss our second quarter fiscal 2026 financial results. Today's call is being recorded. At this time, I would like to turn the call over to Ms. Shelly Mokas, Vice President of Financial Reporting and SEC Compliance at DXL. Please go ahead, Shelly.

Shelly Mokas

Thank you, Operator, and good morning, everyone. We appreciate your joining us on Destination XL Group's second quarter fiscal 2026 earnings call. Joining me today are Lionel Conacher, our Interim Chief Executive Officer, Peter Stratton, our Chief Financial Officer, and Jimmy Olsen, our new Chief Growth Officer. During today's call, we will reference certain non-GAAP financial measures that we believe provide useful supplemental information regarding our performance. Please refer to our earnings release, which was filed this morning and is available on our investor relations website for additional information and reconciliation of those measures. Today's discussion will also include forward-looking statements regarding the company's strategic initiatives, marketing strategies, store rationalization work, expectations for comparable sales, the share, update regarding the merger, and other expectations for fiscal 2026. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations.

Additional information regarding those risks and uncertainties is included in the company's filings with the Securities and Exchange Commission. With that, I will turn the call over to our Interim CEO, Lionel Conacher. Lionel?

Lionel Conacher

Thank you, Shelly, and good morning, everyone. I'm honored to join today's call as DXL's Interim Chief Executive Officer at an important time for the company. I want to begin by recognizing Harvey Cantor for his leadership and contributions to DXL over more than 7 years as CEO. Harvey helped strengthen DXL's position as the leading specialty retailer in men's big and tall, and on behalf of the Board of Directors and the entire management team, I want to thank Harvey for his service and wish him well in retirement. Just a few words about myself. I've been involved with DXL as the director since 2018 and have served as Chairman since 2020. During my time with the DXL, I have developed a deep appreciation for the company, its people, and most importantly, the big and tall customer.

We have a strong brand, a loyal customer base, a clear understanding of our customers' priorities. The differentiated leadership position that we have established in this underserved market gives us a strong foundation on which to build, grounded in our commitment to serving the big and tall customer. Our priorities from here are straightforward. We are focused on increasing traffic and revenue, strengthening customer engagement, improving profitability, and advancing strategic initiatives that can support long-term growth. The second quarter earnings result we reported today are a testament to progress we are already making in these efforts. Our business continues to improve, and we see clear signs that a resumption in sales growth is imminent. Q2 sales performance was consistent with the progress we reported in the first quarter, which is a significant improvement over our prior year's results.

I'm incredibly excited about the opportunities ahead for DXL and proud to be speaking with you all about our momentum today. Before we dive into the quarter, I'd like to introduce Jimmy Olsen, who has worked with DXL in a consulting role for the past 12 months and recently joined us full-time as Chief Growth Officer. Jimmy comes to DXL with a deep background in retail strategy, brand elevation, and scaling omnichannel platforms through marketing, merchandising, and product development. This newly created role of Chief Growth Officer brings together the customer-facing levers of the business, and Jimmy's perspective will be instrumental as we execute against the traffic, assortment, promotional, and store experience opportunities in front of us. Jimmy has held leadership positions at a number of blue chip retailers, including Walmart, American Eagle, Tommy John, Todd Snyder, and The Gap. On behalf of the DXL Board of Directors, I am thrilled to welcome Jimmy to DXL. You will hear directly from Jimmy for a deeper dive into our growth priorities and initiatives.

To frame up the balance of today's remarks, in just a moment, I'm going to turn the call over to Peter to give you an update on our second quarter performance, sales trends, margin, and liquidity. After that, Jimmy's going to talk about our go-forward strategy and priorities before I come back to close things out. With that, I'm going to ask Peter to give you an update on our financial results. Peter?

Peter Stratton

Thank you, Lionel, and good morning, everyone. Our second quarter sales were generally in line with our expectations and remain consistent with the year-over-year improvement in trends that we saw in Q1. Net sales were $111.6 million, down 3.4% from last year. And our adjusted EBITDA was $7.7 million or 6.9% of sales compared with $4.7 million last year, while adjusted earnings per share was $0.05 compared with last year's $0.01 result. Comparable sales were down 3.5% for the quarter, with stores down 4.3%, and our direct business down 1.6%. Monthly comps increased sequentially from negative 5.7% in May to negative 2.8% in June and then negative 1.9% in July. Store traffic remains our most significant challenge, although we continue to be encouraged by strong conversion in dollars per transaction, which helped offset some of that traffic pressure.

In direct, we saw improvement in conversion driven by enhancements to the app and overall site experience, and we also benefited from solid performance and clearance product, primarily through the direct channel. More broadly, the direct business generated demand through paid search, paid social, and programmatic marketing, while ongoing improvements in app performance, site experience, and speed supported better conversion. We continue to evaluate our marketing allocation carefully to strike the right balance between attracting new customers, where we have seen acquisition rate increases since the fourth quarter, and reengaging repeat and lapsed customers where spending remains more cautious. Encouragingly, when new customers discover DXL, they continue to respond well to our assortment, fit, and value proposition. Based on customer surveys and related insights, the overall slowdown in customer traffic appears to reflect a combination of weight loss journeys, shifting spending priorities, and delayed purchasing decisions. Importantly, we believe the underlying affinity for the DXL experience remains strong. Although we still have meaningful work ahead, we are encouraged by the improvement in the quarter and confident that our turnaround efforts are beginning to gain traction.

Our merchandising efforts remain focused on sharpening value, strengthening private brands, and improving inventory flow to better align with current demand. We are leaning further into private brands, particularly Harbor Bay as an opening price point and value driver, while continuing to improve around storytelling, around quality, fit, and value across channels. Our creative and messaging have become more focused on essentials, cost per wear, and trusted fit, reinforcing our position with a more value-conscious customer. We are also rebalancing the promotional calendar toward higher margin and higher inventory risk categories so that promotions can help drive demand while protecting profitability and reducing future inventory exposure. Another topic that I'd like to touch on quickly is IEPA tariff refunds. Towards the end of the first quarter, we submitted a claim to the U.S. Customs and Border Protection online portal, and I'm pleased to report that we received a refund of $4.6 million during the second quarter. Which benefited merchandise margin and improved adjusted EBITDA versus plan.

Gross margin, inclusive of occupancy costs, was 47.9%, up 270 basis points to last year, primarily driven by this refund. Excluding the tariff refund, merchandise margin would have been approximately 70 basis points worse than last year, primarily due to a higher markdown rate to move through slower-moving seasonal product and increased shipping costs due to fuel surcharges. Occupancy costs were flat in dollars, but the leverage versus last year due to lower sales. Selling general and administrative expenses were 41% of sales with advertising expense coming in at 6.1% of sales, generally in line with last year. We continue to look very carefully at SG&A across the organization, reducing corporate expenses where appropriate, and rationalizing our store base over the next several years as leases expire or kick-out rates become available. The punchline here is we need to improve our return on assets. Targeting stores that have a high probability of transferring volume to another store allows us to make the total store portfolio more productive.

In certain markets, we believe there are opportunities to rationalize high occupancy stores and redirect customers to other stores in the market. The store rationalization work will have limited impact in 2026, but it is expected to reduce occupancy and store operating costs beginning in 2027 and beyond. This is a multi-year project that should improve sales per square foot and four-wall profit over time. I'll close with an update on the continued strength of our balance sheet. We ended Q2 with $20.1 million of cash and investments on hand, no debt, and excess availability of $61.7 million. Most importantly, our balance sheet gives us flexibility. Our inventory levels are clean and stable, inventory turnover is strong, and clearance levels are in line with our 10% targets.

Preserving working capital remains a priority, and we have paused all nonessential uses of cash while funding only the most important and required initiatives for the business. These targeted growth initiatives are already bearing fruit, as evidenced by this quarter's comparable sales result of negative 3.5%, the strongest we have delivered in the past 3 years. I'd now like to turn it over to Jimmy to talk more about those initiatives and elaborate on our marketing and merchandising strategies.

Unknown Speaker

Thank you, Peter, and good morning, everyone. I'm excited to join DXL and to be leading our growth agenda across merchandising, marketing, direct, and stores. The second quarter reinforced both the strength of the DXL proposition and the work still ahead to drive more traffic, sharpen product storytelling, and create stronger reasons for customers to shop with us. I want to organize my comments on today's call around the internal growth strategy we are calling Fit for Growth. In the simplest terms, this strategy consists of four strategic pillars. Supercharging our fit authority, fueling growth in our private brands, building our brand awareness and go-to-market strategy, and lastly, driving new customer acquisition. Our first priority is supercharging our fit authority. This is the foundation of what makes DXL different, and it starts with the initiative that has positioned DXL at the leading edge of fit centricity, FitMap.

We've now scanned more than 150,000 customers, and our most recent 12-month cohort shows scanned customers spending more than they did before. For scanning with stronger conversions, higher AOV, increased visits, and a meaningfully lower return rate than non-scan customers. Scan penetration, simply getting more of our customer file measured, remains our single largest lever inside this program. Fit authority is also the right lens for how we're addressing a genuine structural shift in our customer with GLP-1 medication adoption. Based on our customer surveys, a meaningful portion of our customer base is currently using GLP-1 medications, indicated while they are on their weight loss journey, they stopped buying apparel altogether for a period. But a majority tell us that they intend to come back to DXL once they reach a stable size. We believe being the authority on fit means staying with this customer through that transition, not just at a single point in time. And we're building a specific communication journey tied to FitMap scan segments to do exactly that.

Our second priority is fueling growth in our private brands. Private brand penetration continues to grow year over year. Our ThermaChill franchise, which is a new product development technology built into our tech pants, shorts, and button-down shirt, is one of our cleanest growth bets inside this priority. ThermaChill features dual temperature regulation to keep you cool when it's hot outside and warmer when it cools down. Our year-to-date demand for ThermaChill product grew 56% over last year. Proof that when we invest ad spend in marketing behind a private brand franchise that's genuinely working, it scales. We also continue to see that targeted product-specific promotions outperform broad discounting.

That discipline is protecting merchandise margin, even as we work through a softer traffic environment, and it's a direct extension of what fueling private brand growth actually means in practice, winning through product and value, not through the depth of the discount. Our third priority is building our brand awareness and evolving our go-to-market strategy. As we continue to evolve our marketing investment from lower funnel spend toward mid and upper funnel tactics, we're running tests in select markets to get in front of him where he consumes media. Our brand awareness remains below the category average, and the current marketing mix has been heavily weighted toward bottom of funnel conversion. We are reallocating, not adding to, the advertising budget over time to support a more balanced funnel, including incremental testing in YouTube and programmatic channels. We're already seeing early proof points. Awareness in our core demographic of 35- to 64-year-olds with household incomes above $100,000 has moved from 40% to 49% in 7 months. Priority is also where our AI discoverability work sets.

Through a focused effort on generative and answer engine optimization, we've moved our Trustpilot sentiment score from 1.5 to 4.4, a concrete, inexpensive proof point that the go-to-market investment behind a GenTech and AI-initiated search is paying off before the larger infrastructure is even fully built. Our fourth priority is driving new customer acquisition. I want to be direct and transparent with you that this is the priority most exposed by this quarter's traffic mess. We are behind the pace we'd like on both new customer acquisitions and reactivation right now. This is why priorities 1 through 3 matter so much. Fit authority and FitMap give customers a differentiated reason to choose us and stay. Expanding private label lets us deliver more value, helping attract new customers and grow our base. Brand awareness is what actually gets a new or lapsed customer to notice us in the first place. Acquisition doesn't happen in isolation. It's the output of the other three priorities working together, and it's the priority we're most focused on moving over the balance of the year.

Before I turn the call back over to Lionel, I want to leave you with this one thread. Traffic and customer acquisition is the challenge underlying essentially everything I just described, and this Fit for Growth strategy is our coordinated response. Not four separate initiatives, but one solution viewed through four distinct lenses. I'd like to thank Lionel and the Board of Directors for this opportunity. I'm so excited to be working on solutions that are going to move the needle for DXL and the big and tall customer we are proud to serve.

Lionel Conacher

Thanks, Jimmy. Before we open the line for questions, I want to provide a brief update on the status of our proposed merger with Full Beauty. September 2, DXL filed an updated preliminary proxy statement with respect to the merger. As detailed in this filing, conditions have changed since we first entered into the merger agreement in December. Causing Full Beauty's operating performance, financial results, and balance sheet positioning to deteriorate. Our board takes its fiduciary duties to our stockholders seriously and to that end has continued to evaluate the merger in light of these developments. Based on this evaluation, the board determined that the merger is no longer in the best interest of DXL and its stockholders. Accordingly, the board has withdrawn its prior recommendation in favor of the merger and now unanimously recommends that stockholders vote against the issuance proposal. There were several factors that contributed to this decision.

The increasingly challenging consumer environment since 2025 of December. Full Beauty's continuing decline in operating performance and financial results, including lower than expected net sales, earnings, EBITDA, and cash flow. The corresponding heightened risk that Full Beauty will not achieve its projections for the current fiscal year, their increased level of indebtedness, concerns regarding the potential negative equity value, and the substantial economic dilution that our stockholders would experience if the merger were consummated on its current terms. In terms of next steps in this process, we are currently awaiting SEC review of the amended preliminary proxy statement. Once we receive SEC clearance. We will file and mail definitive proxy materials to all stockholders eligible to vote at the special meeting, which will be held in a 20- to 25-day window following the definitive proxy filing. The proxy statement can be found on the landing page of our investor webpage at investor.dxl.com. We encourage stockholders to read the proxy statement carefully and in its entirety.

Beyond that, we are not commenting further on the merger at this time. We ask that you keep your questions on today's call focused on second quarter operational and financial performance. In closing, as you just heard, we're taking focused steps to advance the strategic priorities we believe can meaningfully strengthen the business over time. Three of the most important are FitMap, our application of AI, and our work to better understand GLP-1 related customer behavior. What connects these priorities is that each reflects a meaningful shift in how our customer shops, how he discovers product, and how we need to evolve to serve him more effectively. Together, these are strategic growth levers that we believe can improve customer engagement and sharpen our competitive position and create more durable long-term value. We have a differentiated position in an underserved market, a powerful relationship with a big and tall customer, and a team that understands how to serve him.

The actions we are taking to strengthen the business, drive growth, and improve profitability are beginning to translate into encouraging improvements in our performance, and our fortress balance sheet provides us with a strong underlying foundation for the growth engine we are building. And confident in our ability to capture the meaningful value creation opportunities ahead. With that, operator, we will now take questions.

Operator

Thank you. [Operator Instructions] Our first question comes from Joseph Midkiff of 226B Capital Partners. Your line is open.

Unknown Speaker

Hey, good morning, guys, and thanks for the updates today. There was mention of reviewing store base as leases come due, particularly in markets with multiple locations. I was curious if we could clarify, um, how many leases would be coming up for renewal in total over the next 24 months and how many or what percentage of those might be potential candidates for closure or consolidation.

Peter Stratton

Sure, I'll take that one. This is Peter. So, you know, we've been spending a fair amount of time taking a look at the portfolio. And, you know, as I mentioned in my remarks, we need to make our assets more productive. So, in instances where we have more than one store in a market that we believe we can eliminate a store, drive that volume to the nearby sister store, it improves our return on assets, and that's really the big focus. For this year there's a handful of stores that are closing, I want to say 3 stores this year. Um, next year, the stores that are coming up for uh lease and renewal, Um, there's gonna be a few dozen that that are coming up. Now, those are not all closing.

We are going to be looking at those on a case-by-case basis. Um, and we'll be developing those plans really over the next 6 months to figure out how much more will be closing. But ultimately, it's about improving our sales per square foot in the existing portfolio and making sure that we can get the most return out of those assets.

Unknown Speaker

Fantastic. Thank you so much. Excited to hear about the return on asset focus there. If I could follow up, you mentioned as well the potential for the potential for pausing any cash investments that can be deferred. Is that something that you could quantify the impacts of or speak at all to what specifically – what areas specifically have been targeted for pausing or removing?

Peter Stratton

So the um, the majority of our capital spend this year is in our technology, um, upgrades and improvements, our distribution center, um, and and there's a a a small amount in in stores. Um, the majority of that is going to be in uh distribution and and in technology. So, you know, we are, we have a number of projects going on right now to make sure we're staying current with the latest releases of all of our software platforms. But in some cases, we're going to try to push those out a little further. You know, when our vendors start taking platforms to end of life and we're required to upgrade, well, those are the situations that we're going to have to deal with, but we're trying to avoid any upgrades that will burn cash until we see more stability in our comp trends in the near future.

Unknown Speaker

Well, awesome. Thanks, guys. I appreciate the tone of the call shifting to a realization of what's happening in the business, and I'll jump back in the queue. Thanks again, guys.

Operator

Thank you. I show no further questions at this time. I'd like to turn it back to Lionel Conacher for closing remarks.

Lionel Conacher

Thank you, Operator, and thank you, everybody, for listening in today, and we appreciate your interest in DXL. And with that, we'll close out the meeting. Thank you.

Operator

This concludes today's conference call. Thank you for participating, and you may now disconnect.

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