Destination XL Group, Inc., the largest multi-channel specialty retailer of big & tall men's apparel and accessories, reported operating results for the second quarter of fiscal 2013.
Second Quarter Fiscal 2013 Highlights
- Sales were $97.6 million compared with $100.5 million in the second quarter of fiscal 2012.
- Loss from continuing operations was $(0.03) per diluted share, compared with income from continuing operations of $0.06 per diluted share in the second quarter of fiscal 2012. Destination XL (DXL) transition costs and increased marketing costs related to the DXL national ad campaign totaled $0.09 per diluted share for the second quarter of fiscal 2013.
- The Company operated a total of 65 DXL stores as of August 3, 2013 with a combined comparable sales increase of 28.8%, and a 16.5% comparable sales increase for the 29 DXL stores open longer than one year supported by the Company's national marketing campaign.
- Opened 11 DXL stores and closed 23 Casual Male XL stores.
- DXL dollars per transaction increased 23% from the prior year's second quarter.
Second-Quarter Fiscal 2013 Results
Sales
For the second quarter of fiscal 2013, total sales were $97.6 million compared with $100.5 million in the second quarter of fiscal 2012. The year-over-year decrease in sales was partially offset by an increase in comparable sales for the second quarter of fiscal 2013 of 3.8%, consisting of a 6.9% increase from the retail stores and a 9.8% decrease in the direct business.
The increase in the retail stores was primarily driven by the 65 DXL stores that had a comparable increase of 28.8%, which represented approximately 26% of the Company's comparable retail store sales.
Comparable sales for the 29 DXL stores that have been open for more than one year increased 16.5%. Offsetting the overall sales impact of the increase in DXL store comparable sales is an approximate $4.8 million reduction in overall sales from Casual Male XL and Rochester Clothing stores closed since the last year which have not been replaced with a DXL store.
With respect to the direct business, sales from the catalog business continued to negatively impact overall sales with a decrease of 51.7% in the second quarter compared with the prior year. Based on the results of catalog sales through the end of the second quarter of fiscal 2013, the Company will be eliminating its catalog mailings in the fall of 2013. The Company anticipates replacing the catalogs with a more cost-effective 16-page direct mailer.
The Company has been decreasing its catalog circulations and impressions on existing catalogs over the past year, with impressions down 84% in the second quarter, as part of its shift toward the more profitable e-commerce business.
While catalog sales have decreased, the profit margin from the direct business has increased 130 basis points, from 24.9% to 26.2%. In the long-term, the Company expects its e-commerce business to replace the current shortfall in sales from its legacy brand catalogs.