June 8, 2026

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Duluth Holdings Inc. (NASDAQ: DLTH) reported first-quarter 2026 results with lower sales, but a smaller net loss, major gross margin expansion, improved adjusted EBITDA, and higher full-year adjusted EBITDA guidance.
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Duluth Trading is a lifestyle apparel brand selling workwear, casual wear, outdoor apparel, and accessories for men and women.
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The company reported an adjusted loss of $0.20 per share, better than estimates for a loss of $0.45, representing a 55.6% earnings surprise. Revenue came in at $98.59 million, above estimates of $95.10 million, though revenue declined 4.0%.

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Results Showed Margin Improvement

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Net sales declined to $98.6 million from $102.7 million a year earlier. Direct-to-consumer sales fell 8.7%, pressured by lower web traffic and conversion after the company reduced promotional activity. Retail store sales increased 3.3%, helped by higher average order values and two new stores opened last year.
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Gross margin expanded 540 basis points to 57.4%, driven by higher average unit retail prices from reduced promotions and better product costs from direct-to-factory sourcing. Tariff costs partly offset those gains.
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Net loss improved to $10.0 million from a loss of $15.3 million a year earlier. Adjusted EBITDA improved by $6.4 million to positive $2.6 million. Inventory fell 24.8% year-over-year, and the company ended the quarter with about $100 million of net liquidity.

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Guidance Raised

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Duluth reaffirmed its fiscal 2026 net sales guidance of $540 million to $560 million.
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The company raised its fiscal 2026 adjusted EBITDA outlook to $28 million to $32 million, up from prior guidance of $26 million to $30 million.

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The Bigger Picture

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Duluth’s quarter showed progress on profitability despite lower sales.
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Revenue still declined, but the smaller loss, stronger gross margin, lower inventory, positive adjusted EBITDA, and raised EBITDA outlook suggest the company’s turnaround efforts are gaining traction.
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