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DXLG Destination XL

Participants
Shelly Mokas Director of Financial Reporting, SEC Compliance
Harvey Kanter President, Chief Executive Officer and Director
Peter Stratton Executive Vice President, Chief Financial Officer and Treasurer
Eric Beder SCC Research
Alex Silverman AWM Investments
Michael Baker D.A. Davidson
Raphi Savitz RYS Advisors
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q1 2021 Destination XL Group, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I'd now like to turn the conference over to your speaker today, Ms. Mokas.

begin. may You

Shelly Mokas

and and us Nancy XXXX everyone. you Officer, our Thank call. and Harvey Thank Chief our Destination good XL joining Financial President is today on our Stratton. fiscal Executive Group's for Officer, On Kanter; you Peter call morning Chief first earnings quarter

uncertainties morning on website measures. about available explanation discussion risks sales discuss variety statements release Relations our and our Please forward-looking performance. reconciliation also refer our earnings we detailed and During company's metrics assumptions provide the turn financial are guidance Kanter. affect factors the today's that will call, now now company. Information Commission. differ XXXX. uncertainties to results call and a investors various our to is was those forward-looking and an the would filed in this materially cause Investor Harvey? from other for investor.dxl.com fiscal at expectations with Harvey regarding to of to subject certain which could due of updated non-GAAP company's over and the actual some to Today's such earnings with that like today is the I concerning to Exchange statements useful for Securities CEO, mentioned and information to contains Such and risks filings

Harvey Kanter

world. in shift to of want shared that fiscal to my while I XXXX perspective regards And behavior today's you recovery ongoing speak several growing. optimism of making well we call, Shelly you transformation. comments, It I about to stores and a in were and we in off a buying to terms quarter certainly see lead in starting serve starting opening grateful earnings our We quarter financially by consumer our fortunate to our my sales both since working greater well our with in quarter ongoing and our today business continued fourth strategic profit, sales have quarter financial saying of have and are I'd recrafted in the last you, and the and Thank good and the is a call internal were operating a was our consumer as for On first we in everyone. progress our indulge materially morning post-pandemic the DXL as expectations. back March, been signs channels pleasure and accelerate, solid direct we're and in spoke, DXL that have is with big through believe for levels as exceeded results step-forward digital and both our in This has strong place sales we drive our profit to enhanced teams model transformation.

greater we what will from we raising expectations and performance for quarter's our chapter Peter a in first which our our the later. of year, the detail at initial Given fiscal growth are is annual more believe performance, XXXX onset cover guidance of

to want are the As I few off. first cover I business that quarter details, I noted, topics there before into get a

recovery of distills that to our And of all we continued as choice and equally growing and want I And pause as all they here look only of begun in we and but are our two us in just we to his our endeavored paycheck, we truly to culture a to their is life to I customers, corporate that is what mission in a who on all our for and culture the development, are turn purpose employees call an a ongoing that To rooted of hopefully of and a we better understatement driven not the breadth pursue an apart, have associates. not we just assortment and return see shopping in ourselves to on and level be of growth challenging distribution outcomes are not a fit provide the made have with tall who far. departments and for we First, as single create both our the in for values body, style fits, few We DXL and place most strive our believe am market to levels to acknowledged, double DXL. bring a life and corporate say for that and respect not to so to to as employer else. this But be desire and center, creating an vision means and and accomplish and unwavering choice to And center an I an to choice, feel to found distribution we engagement stores, steer thank and team have If be consumer our creating to community our retailer, live actually more, happiness to results our but We interact our often we your you employer trusted our to bring work, place be employer shared the to day. I be mission everywhere clear a our earn on hopeful of our and endearing a to we harder improved journey, recognize. ago, and and we of to office, employer second truly balance relationship, another been be both commitment to that at be has want that build and and good to an has the started fortunes, our we in behalf and supporting years of experience have. through customers. and be and cannot actions be not very by efforts life I us culture strive will their center tall stores employer speak purpose very and is for a about. the set employees and engaged every better our leader all of of our retailers our clothing it thank in over have in equally we provide continue of and wanted a and for be who we a fits certainly the associates just just to guest happier, him more an DXL on create level that requires big to in to guests to day. and for exclusivity our an build our commitment his center, to down of dedication vision have fits the mission upon employer and are our accomplished that anywhere and to a efforts at belonging of as all helped taken men deliver continue teams to depth in that do working as to for good. it satisfaction choice have choice create big and esteem his worthy good our we be together to experience empowering backs shareholders. would what today, strive and greater we to and our embark

past We big and months. what XX and goes are tall and our the you to And day-in who our serve to day-out of guys. over answered and credit the truly grateful has accomplished all the of support call proud team

DXL you coalition. Through and and discuss the to experience DXL's encouraged where welcomed diversity ongoing organization, inclusion has take a for action made diversity workplace where over employees ago, diverse workplace. inclusion and cultivate promote greater I want weeks In recognize are and along and I a to Second, DXL respected a to to perspectives commitment inclusion. diversity a action to three discussion pledged CEO the little to in and this feel with

have the the normalizing But values nearly three bias. address another we believe us can X,XXX we on who of and this and other recognize taken we together positive which CEOs a past unconscious own initiative, now we company have helps promoted years, affect which step call these coalition journey companies change. joining our brand, For through by that

to prioritization to give and pioneer and natural consumer diversity Rubin for Elaine April third, we a XX with over is Digital expertise the her commitment our Our greater XX to evolve. insight and the and joined Elaine direct-to-consumer in business said, years Board with own e-commerce extension digital internal cover Prophets extensive exponentially Founder our DXL coupled today. underway, thrilled am planning topics that and further And Network her to and President experience is years, digital our personally which business. known over of us for the culture on warm coalition as our two inclusion accelerate With strategic is continue Elaine am Directors. I have Elaine I of welcome And our Board transformation, to XXth. of opportunity wanted experience, I join to to let's I now and to marketing. is leads our about digital well talk who have business. an a of with

was pleased eight net is XXXX. we our our in we about first quarter XXXX performance I time world into we lean and about will remainder making hearing how be First, Since what reporting first talk for And I want quarter. company in the from you talk the of last a as announce our to standpoint, want financial post-pandemic priorities for you are to to income and and normalized DXL meaningful first the to evolving customers. seeing results. XXXX am that from I second, for to year-over-year the to comparison our years, year we very XXXX see our our

XXXX. quarter first in of million were compared first million sales Our the quarter to $XXX.X $XXX

would a quarter leverage compared and to than finally, return pandemic was that million exceeded a customers net operations direct first Our we've sales outcome compared internally belief expectations of would subside, of XXXX. million as $XX.X a when million recrafted as that created began quarter $X.X the our to These our really to income and know the first net we've but in drove the actually $X.X $X.X of million in our adjusted held didn't loss of EBITDA are was our for expected. results the We've quarter XXXX. And firm we happen. greater the

fiscal on and to been XXXX level a and for was consistent dramatic over that to thesis the plan with for would acceleration our has this year. seen the year incredible but first XXXX. of have constructed us with balance clearly year, business quarter prospects truly the optimism gives a the we return the Our gradually remarkable in a start Again, the

Let bit been me on a expand our what's with customer. happening

know, XXXX you our in of traffic. many store was challenge As greatest

pre-pandemic, stores part from of your the in I closed for customers pandemic, but he's need not different the resuming once Suddenly sluggish and shop don't There socializing, some new a avenging were He go, first expecting anything being they We customers store, really our to For out this that clothing shift scale staying and many right clothes. from activities. to were you were tailwind the telling house certainly quarter's and result. again. parts need they soon new some year, and degree see certainly enjoy happen vaccines a of in the don't of position. to was were but anywhere of I not Throughout of to have country. so administered creates came for I a various They restrictions were after started home. were clothing accelerated initially point, at so demand dramatically. to demand and love reopened, I'm pandemic for starting is that our the pent-up We being to and sentiment in us back relieved now.

stimulus impact starting checks some was hitting bank mid-March. Another of that accounts level tailwind consumer on demand had in that

dictionary, acceleration cannot urban stimulus our from businesses The impossible today? getting new customers you out be for to to stimulus perhaps then definition. clearly it's once Webster to [indiscernible] in ignored. The question, what was much back and a brought direct a consumers quantify the posing We more driving how the due shop. was heard checks, stimulus, answer the when reference of to checks were While or

U.S. surpass in early deposited weather the XXXX arrived warm now to the when Fortunately, of our last sales are trends May. continuing fact of and XX even April into levels much in round Finally, cannot checks stimulus spring ignore were past and we the weeks that being continued

in from The factors in there our DXL for customers were traffic, the our business April may his acceleration Geographically, into our warm customers direct value. Meanwhile, wardrobe that XX%, conversion come replace continues to Midwest will improve. we've has are to XXXX. to March a time XX.X% and all it's February, Oftentimes and side We of comparable days serve XXXX weather have DXL March the in for on Southeast and were the or right realize compared winter fit years and catalyst an these begin In over business, and to his together that channels, known changing X% in has down up confluence and overall the clear in clothes on a as South quarter changing seasons shop. we the coming and May. month shopping, positive strongest the country. April, some and gains gains to his seen the our first our often Central to first creates Sales just order his quarter for minus environment gains happy sales clothes. needs. continued to website parts of from that but momentum in both In right been store three of with average performance there rebounded of an are was not the

XXXX. the is has what on quarter the in of the approximately to business of points, basis XXX country middle Our by Coast fourth saw the behind trailed we've which similar

not buy, dollars While has to in in strong travel I fully as growth conversion [ph] visits fiscal and noted per are more with which seeing is recovered XXXX, being intent realized strong transaction. we in growth distorts through

to shift strategies. me let update merchandising quick on Now, a our

We and when at more driving difficulty] and was full and were versatility progressed price drive and active comes Nautica continue essential during weddings are a to functionality customer comfort, embedded hugely to obviously are of led by time encouraging which it meaningful the pandemic. [Technical that [technical Polo, This are see our of quarter as into features we difficulty] business, that messaging expect the such leaning is particular spring casual, hold loungewear [technical put events, because we the and attribute to it rescheduling Reebok. as in sportswear, less season. our through key categories Difficulty] on

better meaningful expected. not demand we is While clothing game for it tailored this is changing, and certain for than

to inventories. Moving

we are down have from XX.X% We conservatively quarter managed XXXX. and first inventories

to our have been We supply working our organization. very hard sourcing global maintain chain through and logistics

second our One of the vessels for of and heard half emerged the overseas continues project, of shortage that sure XXXX disruptions of which available challenges I'm chain and supply a you've containers often. in today, delivery from

the China cotton, escalating. unaffected the out were and of year. China seeing the by by in merchandise raw freight delays, from but live exasperated than cost crisis also by less of for are humanitarian costs increasing We're end Our largely to province of the expect of been particularly entirely has certain materials, sourcing the in sourcing Right spring of is Xinjiang we receipts being now, X% China. be which

regarding also brands other our and online to ethical We're we with the heightened We occupancy and conditions continue to member working of With a And and ethical awareness supply a chain. to global manufacturing forced labor world-class improve the several companies transparent sourcing and costs. actively partnering are create through proactively have leading to organization. continue to regards chains. manage in retailers FedEx, and for supply platforms one world's of concern

negotiations pleased longer the landlords with pace continue but abatements, first rates. $XX no to so market progress half made XXXX, and of rent, of to the leases negotiate at dramatically In far. are XXXX, that slowed we has We we of compared we've The with negotiate engage to million are approximately deferments.

of over individual in XXX of In XXXX, expected restructured of deliver Since addition, $X beginning million over we the more one-third the specifically savings of fiscal our $XX.X life leases, including million than XXXX. we're expected store lease, to the chain.

push lose are these We sales. rents lease landlords, outlined with we these our with hard continue to costs that where

today, of I for we post-pandemic XXXX to into XXXX. lean what the to topic see in and shift let second priorities how as our Now, we a wanted me are world DXL remainder discuss specifically the

promotional First, our to about I talk strategy. want

drive our promotional the prior fewer, coupons and years. were smaller, strategy not than from significant propositions. let and much with to pandemic's overall dollars marketing. and this public, unique there's in communicated and liquidity promotions, the increasing discounts our and as within sale pandemic, forced Promotions, This audience made full during key marked increased we not what alone margin shifting savings and capabilities do and exclusive gross being we part by curated expect drove into taken not return in dollars or not a stores. forced website, in forward better products and generalized is approach to We to toughest as the of different our assortments. XXXX product, been not lapse have in through has we on improves This more drove differentiation levels but app full and posture targeted, meaning to Our traffic during segmentation site an offers exclusive or days move on on a in frequency, XXXX. Last to know you months year, and execute customers outcomes. rate a for we benefits for QX messaging, price deep and were a in on approximately personalization buying. to product more expect further promotions, XXXX, to we but focus down focusing year built our any created specific to efficient much targeted we more the Promotions our selling in positioning. around features uniquely as developing Promotions nine more marketing change suing overall not in we're specifically to far a available were differentiate encourage the of place brand's strategy of promotional terms maintain our and expect the This broadly to encouraged of

our you and were we thinking Next, share with let positioning me about the brands market. how addressable evolving

XXXX, to have immense of of we out performance. coming learnings lot insights leverage QX a We drive our and XXXX

only came in not by started QX grew as discussed have but customers. growth XX.X% and to of quarantine out driven the they to by we socialize, As DXL XXXX, returning customers DXL.com by new to existing in significant business driven

target As a XXXX business, of in same growth the than converting period the continues across a this. new been them to is large we positive customers to QX enhanced in market customers digital acquired Driving outcomes XX.X% defiled great more top of attributed prospects be on results. to growing that's our And our and new capabilities target drive to we channels priority. part marketing a have in progress making in efficiently XXXX,

drive Our choose approach for app on how DXL has shifted driving stores to experience or and the on stores, or our based they and web, them from to our wanting to DXL, customers engage being to they're there customers the our to website. in to on whether

not a relationship the mind also with share in greater our our loyal We with and discussed a in creates and shown to our Our more last and test learn our focus from strategy create customers returning months paying more XXXX, which past share alike. We and QX for off. helped earnings QX cadence only meaningfully with refine brand DXL who in with and consumers across have to marketing and marketing new signs some short-term have but our advocacy of our call enduring customer influenced stores, and segmentation general efforts retail long-term that is landscape our have and learnings create strategy to positive stickier most market promotional guests of six the broadly and comprehensive seek initiatives XXXX truly business. for been of

total market based adjustable billion. market north share, done, of is core sell $XX have believe Speaking research we merchandise the on for of we we

the actions reposition of our liquidity to offense to pivoted acquire DXL cash, all market we we have continued perspective along, the around have share clearly that to managing included pandemic coming brand, to finitely pandemic. driven grow out customers, the more the approach opportunity credit and on While from driven

we and team and clearly XXXX a this do tall our yet strengthen consumer is We XXXX our have stance the to men's We conceptualized evolving and leading our referred throughout life for apparel share. to to business, greater and further greatest the continue create as position we'll the alone mind us today, we defendable makes with competitive everything and look so articulated this in vision big that retailer beyond. the for it in and to to moat, now, believe share market position's positioning possible potential as and inflection bringing growth do

in judged across how behavioral to primarily an We the which sales are points. result $X.X In of being of as scores, the We personalized specifically, by consumers relevant the Scores, only which creating -- measurable different let to loyalty is million driving advocacy stickier by brand evolve total, creating not DXL give engage continuing touch short-term $X.X and update compared growing not wholesale our first generated wholesale. to for driven Amazon, more XXXX. Promoter with at business, will even NPS million And messages all goal first Net long-term segments our consumers. and change, we on but greater with customer of you the finally, also me in believe quarter quarter for

business there to challenges in our in wholesale works stock find work we DXL and for Amazon. levels, some for While continue to path are that a see projections flowing wholesale works we for

you. Thank me it Peter now opportunities search to update. Peter? overall over turn grow continue for an let to the business. new also We And for to wholesale

Peter Stratton

you and quarter about speak to you, results. Thank excited everyone. morning very today first good with Harvey our I'm

after and over we in we expected. March increase in drove the the pulled occurred we cost As the past year, leverage that promotions had began trends and our that than Harvey results Accordingly, earnings, on improvements will discussed against sheet. are on first which I our QX with earnings turnaround full review XXXX in for the with discussed, cash Along increasing flow sales guidance, our implemented and sales sales, XXXX balance you and results, sooner impact reductions that quarter I better quarter first to in year many our results. Due dramatically back of had we also COVID-XX our compatibility. the the will which I significant more compare

rapidly So, quarter fiscal the $XXX as let's start were sales. sales increased Total first the with down distribution, Harvey state total quarter over in were levels XXXX $XX.X X.X% relaxing of and and $XXX.X vaccine from basis, strong X% Stores was minus spoke to that million we a April. for XX.X% to February in for benefited And of million quarter compared sales March minus XXXX. to about the of performance, tailwinds and COVID a believe in specific first over of and On first to correlation plus XXXX. the first XXXX the in stores comparable fiscal X.X% quarter quarter million improved store both some quarter. from restrictions. the this there

uncertain tailwinds each are similar is trends these last, of long to May. it continuing pleased how we see in While will

sales is in number of up continued store as website, that our in high us business found April, build driven the especially worth even and XXXX, customers noting file pleased XX.X% website our up which by March have also direct over was accelerated. primarily to We through rebounded XX.X%. by the web. business new to that was were Also Our DXL.com

of So, back stores, not overall direct we all lift across experience did but just to an migration channels. a shoppers

the margin of XXXX. for XXXX as quarter and rate inclusive of first Our over improvement XXX The decrease quarter $X.X costs XX.X% compared store was by of a occupancy fiscal a a XXXX of costs, as gross occupancy in XX.X% of more result in customers driven margin initiatives. rent and to fiscal talked rate elevation brand reliant to was continue million for more the less exciting our XX.X% point gross primarily to will basis our closing and posture on through price margins unproductive that full suppliers. benefit promotional with in be and stores and our about. Even brand reduction both improved is image shift discounts long-term us the ongoing of coupons Repositioning Harvey first

Now, and let onto selling, me expenses. move administrative general

expense structure through that certain non-digital as costs fixed cost of in as reductions possible, despite operating XX.X% travel lower As headcount XX.X% fact fiscal reductions reduction our XXXX cost variable being first the Most for XXXX. our hours and XX.X% sales, were rate a is and historical fiscal elimination is compared as to models, lower of quarter of result many will the remember to corporate and actions XX.X% as in long-term. The cost reduction increase of we will staffing expense quarter accelerates. not of SG&A the the services, XX% and you were discretionary channels, We're marketing only and XXXX. for in first intended rate than the our but spending. especially reduced very that store these the diligent far These liquidity, first included that a for percentage of quarter fiscal costs, to business preserving implemented of about actions preserve reductions fiscal XXXX broad-based

quarter sales to experience, to $XX.X of in of trained diluted million below $X.XX store EBITDA levels. provide $X.XX costs quarter a strongest a associates of XXXX. they to quarter exceptional Facing quarter was net the will of basis, loss store invest quarter million XX.X% of or we million share XX.X% a XX-plus $X.X first Corporate Adjusted years. as per fiscal of the loss first million first for an for represented income was in SG&A million This in the Costs loss in to were and loss for for XXXX hours diluted share $X.X fiscal in XXXX of our remain XX.X% per first but of compared costs, a We the continue per first first or are store fiscal costs quarter of significantly a have center compared first quarter compared is XX.X% Net in of quarter the delivered or sales earnings the of of million down for ago. compared ensure to which distribution were $X.X historical the first properly and with to per in the $X.XX QX of overhead we the sales a corporate quarter the diluted to DXL of last $X.X to compared Customer Costs, years million income include that $XX.X that share XXXX. guest first the and the first the quarter loss dollar two fiscal XXXX. net in $XX.X of Support XXXX. On share expect net

I'll our common $XX.X new in the million. through the stock raised focus $XX with on to registered completed payoff $X past flow which direct year to February, for we were spent million turn the balance enhancing which used offering million of a FILO FILO. sheet. In preserving XX.X term we Next, our proceeds a relentless liquidity. loan, cash Also into shares of and We and we March, existing a entered million

stock provided liquidity. new to million million us Our capacity forward. a rate new borrowing offering additional higher going has to FILO term Both loan advance $XX with additional the flexibility the will provide and and of $X

turn. until XXXX transactions just million our of proceeds facility, in $XX.X million for does place the May our significantly as seasonal I include compared well position of which $XX.X to fiscal use Most our which and inflows for to in use purchases $X practice cash have remains fiscal we inventory as returned addition, revolving of revolving credit utilizing of improved historical Free not XXXX. our our improved flow million facility. of daily of a first our XXXX. mentioned, the our paydown In is this quarter, credit a improvement quarter profitability With inventory of supports to liquidity to due fortified, as the to first financing improved cash

you we sheet, As on much debt low relatively result, will our lower a see have but also a balance balance QX balance. a cash

end XXXX million of nearly $XX.X million to comparison, XXXX. first at cash, from million of and from quarter to QX consistent more a decreased of of improvement net the QX look $XX.X we For end XXXX. XXXX which an at the the $XX That's at the million $XX.X of at end debt

the million very with $XX.X improvements lower availability position, to had free financial facility quarter. the our end credit these cash debt, positive of availability were We flow. excess increased of revolving Our at and pleased

fiscal cash continue paydown And to a of in debt. expect generated on We couple quick XXXX flow free just notes to using inventory.

Our May inventory Xnd, million million $XX.X XXXX. XXXX, at million as and balance decreased at to at May to Xth, $XXX.X Xst, May compared XXXX $XXX.X

turnover we national time, but year's our expect at our brands are course, the of the At chain assortment meaningfully QX, total forward. inventory, line levels our year, and improved exclusivity representative first capabilities. in and logistics greater which supply clearance XX.X% to end same represented goals. narrowing store we unexpected of have impacted with Since going inventory last with the levels while we is inventory our driving working of of meet Of by our last quarter of long-term do our was should managing the inventory current our closures, conservatively, inventory believe more the inventory been

monitor industries. topic consumption we a is and across as some disruptions want we don't that for this risk a foresee shareholders, mind the supply of At return whether are our stock to exchange, outpace managing to chain address across continue it year. as could the production I is receipts but supply also variety to all of delay the such We a second retailers time, any that national sales inventory globe in NASDAQ. continues from of to that of is jeopardy half that plan a to chain disruption, top

delist plans many As time, to with list chose elected the market. our not do OTCQX voluntarily not know, Currently, and meet on we we listing have of At NASDAQ a did minimum the XXXX. the to stock in for to we December, from any standards NASDAQ. you relisting apply

We are aware applicants, new of which minimum listing the for standards include $X per share a price of share. required

to satisfy focusing if the to not business any changes requirements. requirement do monitor we that but we today, strategy, executing are our listing As there we'll on are continue

I to sales like updated share would Lastly, guidance you earnings for fiscal and with XXXX. our

wave continue fifth in -- during impact remains changing very to infections a be risks a we America felt remain rapidly by to of or of globally. And uncertain me the there throughout saying both and world. variants time. COVID-XX new world there of start live North Let that a in continues increased The

our However, into the increase quarter, our based reads quarter to trends guidance second experienced is believe first on early today. in the the and appropriate we we it business financial

that guidance guidance XXXX our and stores, quarter is of the the our to the of year, million; million through level we our a free are pleased by follows: but It is $XX to satisfying revised materialize outlook $XXX over in to corporate as cash have the and million; results. in rest financial see $XXX work reflects positive for fiscal Our hard caution flow. start first million GEC our Sales of approximately This put for DC, EBITDA year, very associates past approximately to adjusted results. $XX of

socializing would wherever our gathering to able is are Harvey We feel comfortable to that some he the over thoughts. are to and house chooses support whenever thankful here, that to glad and us. with be I said, for back and like customer to shop starting him again, be closing outside turn it to With to

Harvey Kanter

Peter. you, Thank

As hope in optimistic or and remarks we are heard you quite both and we energized. so Peter's, my

that assortment underserved be questions. and feel we'll and believe in lever bought. with a And consumers essentials most to for good have the curated an memorable customer, to We We of we our esteem, the -- designers, strategy storm We look both team. uniquely we brands serving experiences from in-store value to good. believe their do a to and offering that be and we and guys customers, and be by We worst luxury weather, and have online, to do meaningful extensive most price exclusive engage for all the strive the that, best, creating of an create that earned. -- have shareholders. and browse interact, challenges, and place with to worthy shop, returns the of to has their solid position. we take have end and we It what interacting our associates, believe incredible be excuse through come is financial friends cannot recovery And to all leverage and something big we and tall all, do -- me

Operator

Beder [Operator Research. first Instructions] of Your the with SCC line from Eric comes question

Eric Beder

morning. Congratulations on year. Good strong the a to start

Harvey Kanter

you. Good morning. Thank

Eric Beder

have here, segregate I of of much your group look When of much seeing how we're it even stimulus, sizing trying lead is that looking how you in at pieces product? of to terms that and to is at some believe you a know it gains other the you wider isn't. Are shifts you

Harvey Kanter

analysis. call stayed And of if of way it's not small kind Freshmen-XX that the time what phrased, don't -- they we're home, some the people I shifts have in have belief at know COVID-XX been it's would doing lot but We've sizes. the Yeah. percentages. level a I the like changed material, of the but seeing and amount it's of

movement or characterize a So X%, but X%, a up, material. let's small I would XX say from -- a size it XX X% XX, as so to movement

Eric Beder

at to growth? personnel you potentially Okay. the in the store to And support the office we when personnel, see of going are store increases level amount and stores look of and going kind the forward -- of adjustments this now home

Harvey Kanter

Yeah.

commensurate maintaining our social talked very and our business tried have revenue. sure, and stabs three increasing you priorities taken distancing of about we two remind about way payroll to I'll expense We've variable our way is stores. variable And For stores, at be to the talked our the for we've payroll respectful with relative business. the in we've

consumer First to distancing maintain as ways, meaningful social is sense. in to but the makes engage

are that the those the store changing case, merchandising up warehouse. those When mini to a a the being through sales sell leveraging that and the from sales. to social create itself the payroll, not experience store. are of velocity in trying because associates most lot specifically makes we and some of the with allows of adding to basically we ship crowding the payroll maintain visual which And with add the And you sense, social create inventory distancing three distancing that really have that. is up, stores more of store we it place. each to and in would store is in the but of as ability one that third is and still in Second, practices store And elements, layering are level the we

Eric Beder

more and and to it directly And little for -- to lower sales customer? you the how you Ship said, you has has it store enabled bit. and to overall the ship from have, store for a Great. one has you the process, enabled inventory it in up from how actually question, people as up to ability pick brought helped I

Harvey Kanter

is we're capacity materially pickup think levels buy is in in to seeing curbside. biggest at where actually in change Yeah. I seen place coming something purchases to we're is think pickup pickup pickup seeing The of or shipped incremental we're And at or we've from double-digit Eric, stored revenue and of And been coming it seeing online store curbside in. bylined online in store addition has greater And a the And terms been online each the which of customer that. growth buy store product. I sentiment has has in had pre-COVID. consumer curbside. shift buy and what the the

Historically, in as historically. sale digits low the If they different than revenue. want a from of single they literally to as but and it add-on in browse low, a or you come still compared and to very today, it's shop at you very something will, level forgot digits And before. double-digits percent single running was

Eric Beder

luck year. Great. the the for Good of rest

Harvey Kanter

Thanks so much.

Operator

comes Your Investments. Silverman from next question Alex of with line the AWM

Alex Silverman

and Hey, good morning congratulations.

Peter Stratton

Good thank you. morning and

Harvey Kanter

Hey, thanks appreciate so Really it. much.

Alex Silverman

Three quick questions.

using numbers? what kind First, for to for of direct kind -- what growth? to comps store are XXX, to are those you get using And assumptions XXX the are of your what you assumptions

Peter Stratton

Sure.

rest negative But store XXXX. very that assumption one. to be negative, take very is and comps I'll to they still Alex, -- do continued But see XXXX. but mentioned going So, outpaced close slightly QX were comps to as and for that the to they growth that they're will for year. were the we we The close in where slightly in continue we expect to of in which significantly, that expect stores where the indirect,

Alex Silverman

different a in of and in now store? that coming product he's the online Are coming shopper in is buying Great. the you that one product finding that's type

Harvey Kanter

not different. customer biggest and elements our believe, sizing, we is is the really associates. is specifically only store not shopping customer to continue and shopping or comfort into they see when seeing best is that trifecta they customer channels the app, But interacting they in-store typically And greater in comes which thing uniquely lifetime shopping the The product, continue I this richest is have by the No. obviously, do as to are they on And the our when of we the We're buying richest materially that store. purchasing customer we versus see item. see seen anything And that's with we the far the of understand or experience like, browser they're a When more have would we the they a material yet spot both. specific a there's brand, say online, level online where relative our value, crosses to online. an and material. customer, that between

Alex Silverman

in way out-of-stocks then And of last any is, your question some broad with my helpful. yourself it. Got items? you certain in That's did geographies find in stronger

Harvey Kanter

country, of to ship would are any net see versus acknowledge but great and our between have we stores to -- the the out-of-stocks comps ability middle we on inventory that ability to a material. Coast no material and practice move on difference the obviously inventory based the as support the We I around of the mentioned, a from in DC, the we have kind that

Alex Silverman

plan. that to That's keep above pretty with you able surprisingly up were amazing

So, congratulations Thanks. on that. That's all.

Harvey Kanter

Thanks.

is Our in we mix evaluate our see continue but hope level of turnover to goal inventory. the and is use will and more productive to performance, actually turnover that growing

Alex Silverman

guys. Thanks it. Got it. Appreciate

Harvey Kanter

you. Thank

Operator

line Your Davidson. question D.A. with Baker the next from Mike of comes

Michael Baker

guys. thanks Hey,

on promotions. last two Just cutting strong of pretty and on a sales here, point. really me. course, very up I following inventory for that or One, mean, low three

efficient As opportunity into it me demand drive the those aggressive be bit inventory want more promotions, to and a the with lead you start back, but more sales? get -- maybe I if maybe seems a to to bit? comes do an to as little to there's be little even to start we

Harvey Kanter

And we would as we define honestly, quite long we evolution the the drive And can I actually size. long fit proprietary if as that sales can't Well, for you believe positioning. elements a every positioning going we hang as brand don't possible. just developed if our really a are of proprietary on think to the get with elsewhere, we product, fits about forever, spoke truly we which you as different three and fit, grade possible about

bringing that of level aggressively ticket. very us higher we inventory. continue and team we The at and on two believe Secondarily, is revenue in promotion our live talked then news certainly execute in experience the exclusive fall the and use we always variables. that sales reward not we promotion, many a the good that And comes great ways to more units mix creating I experience historically. most level we and by personalization, the cases bottom hope and has we're remotely allowed of we the of the return by strategically if then of through push There's to traditional is The marketing risk a we cases. We anybody. in less management and can, we confidently selling the will accomplishing creating. is customer promotion. we've retailer, won't gone think we're if And in we've life variables to to experience specifically of unlike off, inventory in and those assortment, about unique segmentation belief which all and okay, is but not the actually that even managing to we're which level secret we our last average is which the words in our will in have the least, the not much a race actually that and greater return accelerate in to truly to had different if we're And really pull and creative

Michael Baker

X%. this sense. makes your EBITDA year for the that follow-up just that, would be, perhaps to That Well, is implied under a guys margin in Okay.

possible, over to of with more As the you about could art what talk sort time? do the of really to less, that be

Peter Stratton

Yeah.

with I be as going that year. second We something absolutely XX to think it. the EBITDA then our through is what's to put for XX year, on of got but really And with coming upside cautious We've be to when end -- could that the think can we be half certainly the that be there I think hard year, mentioned, to if just still website, water -- in that's are the coming number, the a in to guidance bridge. customers hang we're going achievable, yes, we trying but has happen stores. this to the it's tell pass I position that great out we're to to the there under should inventory. there's to our And to of we

Harvey Kanter

Yeah.

think think we of we're that that which and that as hope I Peter nine literally, things of brand's a big plane from cautious from promotion want optimism double the the recognize variables you flying has because to been I evolution bet. on have, part just I goes, thing one in I while said, we build the is really months have it. away the that this we better And repositioning, down that multiple this

variables et And cetera, our cetera, into drive of grow a so, inventory. our et that that, come then and margins, ability there's lot revenue, to

guidance the inherent we've about pretty think results. I that's So, risk in prudent and and our being as we're what pretty pragmatic provided thoughtful with

Michael Baker

rest not so the could, timing country. hog of presume intrigued quick But I reopening. because makes Coast of that's I That behind far line the here. to I'm Okay. Two by if sense. of the phone just ones, the more being the

middle of time the relate you ramp perhaps move country? look middle initial then the And seeing the part we over part they as And so, any surge up think of country with are the in reopening? more do to those that, that like the past to slowdown

Peter Stratton

yes, parts of first part continued little March The just correct. slower saw comfort surge of that we Mike, and has we tighter the and it a just beginning Coast that Coast, your expect since of We believe catch found. started the will country when like So do had we resuming out the life in up. the it. going have middle But much less some of in understanding middle we restrictions with is respond to to country, the the and very bit link that been seeing maybe

Michael Baker

Okay.

slowdown, so, occu One out at and they of and just one seeing gross the middle and I isn't more little math if is the the margins ago two is points. got look But And maybe there part then -- subtract here, and wrong. years importantly, which said and versus country good. you this XXX -- your it the basis so are

are think without the there? in the XXX missing I versus my basis something math Am merchandise margins down occupancy ago imply or so years saved something. I points that two or

Peter Stratton

Yeah. primarily No. are down the more you've and mix that added to the got And a merchandise business indirect. some it's bit, just costs. little due shipping shifting margins doing we're

amount. a not it's huge So,

think put XX it in I release that was it the is. sales basis penetration. difference what change press the It's But we had in the points. that's direct

Michael Baker

Right.

Thank you. the on time all appreciate Okay. call today. All the right. I

Harvey Kanter

Thank you.

Operator

Your next line of Savitz the Advisors. from comes RYS Raphi question with

Raphi Savitz

really on really, leadership the of masterful shareholders. last of behalf Harvey, year. Thank you the over course

Harvey Kanter

kind you, Hey, tell very that of will really clear. I you. be let's

customer their -- thousand amazing. have heroically couple a thousands and work, commitment pretty people We good to is doing our

our this. comments. off them I'm one group -- of the the -- So, team helping employee But really appreciate it my have hats and through population. get just our to

Raphi Savitz

to there? follow-up about have And How kind than learnings your great that differ you been a the new about customers, what was your those winning what Absolutely. can are well. new customers? it comments and hear existing tell And as have customers us of customer then I

Harvey Kanter

they I'd at say to high seem materially a don't be very level, different.

the XX% of putting today. regardless customer for for really is but today, a is level the tall I of product where searching shopping is customers it's what that's and ways. more up And on One, but consumers process DXL.com where might the at or another hard example, digital they team retailer, that in-stocks we to store -- I customers another as then where we're big perfect and we that buy is, looking. where search search see business have elsewhere kind they're implies way their whether that shopped some and that, two for of might names, looking more not come customer specific they're meaningful in assortments as nearly or is -- And are ability a in when as retailer. not the won't marketing and the is under channel shopped And or apparel. pressure a a through start looking what popping it's what and weak, I it think either direct shop there think strong And web, the now go they of It's not it we're through online. lot the and -- to us experiencing winning elsewhere. there haven't shopping us want that being at have found obviously to pushing because be our And doing not a or might've at the is secret the regardless elements. might and strategies they're customer really that

some we're other strategies it's had have how assortment. materially both our to We're buying. digital relative outcome relative getting So, -- terms actually what of to not duress the the customer, a retailers seeing well in combination and as of transformation think that of I different as actually they're the

what Lauren, Vineyard mix. call brands and Hill versus Harbor pretty referred other that Oak might brands, be and of expectation lot some somewhat of the Psycho not value of And Vines, seeing meaningfully. fluently brands, label penetrating which and carrying oriented our are would are our are value we Bay Ralph that would that collections the retailers to We are is Bunny, more have a private greater I part

Raphi Savitz

Got it.

really -- I will And what more at business the it it mean, move ultimately going business next most fleet? years? to what few think merchandising you resizing needle new let's think it acquiring create it, about the what's store aspects Okay. I of mix? telling next over visiting as out getting of over for what this years, the you I'm you business the say, is value? shareholder do guess, And customers, portions What the is Is few the or is guys customers, the the

Harvey Kanter

move I yes not than would last the say of store your yes. materially say, fleet, conversation. a different comment the I will would resizing that's other business, and which yes,

the broad assortment. lifting It's that There's So, a bullet. lot our market bullet. transformative digital a how is doing go very It's store. the is process. customers and silver to of specific there way no or silver belief no then personalization through And ourselves segmentation a the is creating as way experience this It's great we've heavy that to we been in we with there to relative productivity.

It's and greatest the the about, the lifestyle not business, the is which I to just incredible relationship and we with I create excitement the consumers talked fit, be what demonstrate an have only we're to as retailer, think is do. not there incredible customer to retailer is ability It's brand just company, a underserved, actually business. not our that a but a big and really it's business tall greatly we a being a community who sticky that respect, creates all sideline. we belonging for

Raphi Savitz

Harvey Got you it. yet congrats Well, much, Thank thank you. again. very and

Harvey Kanter

Appreciate again. Thanks comments. the

Operator

Your next question comes of line from [indiscernible]. the

Harvey Kanter

Seymour. Hello,

Unidentified Analyst

on several Congratulations quarter for an quick and guys. you question Hello. incredible

was unproductive of terms that's wondering closing So, were guys and where you stores had and mentioned where curious are locations. retail you was like that where you were you in looking

Peter Stratton

Sure. I'll take that one.

continuing on one So, we but store are stores, one to basis. every a evaluated is for close unproductive

act the store able own to economics of to weight. So each the need store carry of be in their each four-wall

just today. think at down XXX the year XXX I We're stores. over So, to we started XXX --

many And look line bottom to hard the real be be there there each are carry able that store a great going this something then years. more lease many, expirations the is really have productive, two a have stores take kick-outs we're the XXX are few that those think hard stores if closed. needs Obviously, should a to stores like over within and but that stores or cannot close XXX to And some will about some next to number, [technical that at. there's stores we'll be We year difficulty].

Unidentified Analyst

guys you. Thank the efforts all you do. that’s it. Appreciate Awesome. And

Peter Stratton

Thank you.

Operator

comes question Private Joshua of next from Goldman, Investor. line Your the

Unidentified Analyst

for and Thanks congratulations my call hard morning. work -- up quarter. taking phenomenal Good Keep the and a on good, work.

Harvey Kanter

Thank you.

Unidentified Analyst

approached of about XX a Okay. buyout difficulty] possible or any company My let's DXL [technical the to XX has day offers last, to buyout question merger, pertains in months? the

Harvey Kanter

that engaged that. -- one. have any So, We're -- we're take not we I'll conversations in about

Unidentified Analyst

have but private approached past But maybe Okay. the my happen you the didn't And you? yet, guys in or it company? ever any obviously, approached question. entire it -- question been possible purchasing Is XX a That's months? maybe, that has exactly to, company to you XX about approached from equity pertains buyout my company

Harvey Kanter

not we it's just touch but question, that base would appreciate We on comment sure. Joshua, something on. ever and

Unidentified Analyst

Thanks Understood. the again. regarding more one follow-up NASDAQ relisting. And Okay.

a to a that you price NASDAQ requires for -- apply consistent share $X say of the $X relisting? So

Peter Stratton

Correct. of $X a listing is share That's the requirements price. one

right So, I we're that to because we're $X actually as had we're OTCQX not price. not now, it we're with just we happy -- in is where comments, about moved close thinking to stock mentioned had quite the And share the -- now. the right there

Unidentified Analyst

be maintained and does to Okay. share the NASDAQ to have or price long How it? application accept obtain for that $X

Peter Stratton

to might it be That's Yeah. XX-day what $X. know sure days you have don't not have like but is. exactly about question. it I XX a a good -- exactly, I'm

Unidentified Analyst

that consider a the would if company that more, have point? for days share $X or for And consistent Okay. G relisting XX price at would DXL

Peter Stratton

but guess, we've where not the discussions all watching consider I we're that. I'm been kind have that. whether is point we future that will as and the something we I'm we a saying and of do necessarily board $X requirement, that to want our of No. to are. It's in it's moot saying with because

Unidentified Analyst

very you Thank much.

Amazing. day. great Continued a success. Amazing. Have

Harvey Kanter

wrap this. one believe. then we'll question have I we Thank you. And Operator, last

Operator

Yes.

Your comes Seymour line of [ph], final from the question Holtzman Private Investor.

Unidentified Analyst

Seymour. Harvey. Hi,

Harvey Kanter

happy on are Seymour. morning, We you're How good you? Hey, are the call.

Unidentified Analyst

Thank Thanks. you. Great job.

of ever Somebody number XX like you the a or that told like that academic, hear something pounds gained, like that? me Do that. with XX% something adults have the -- like

Harvey Kanter

we've that that, movement results but seen to. reference COVID-XX. data published a was up referring some small nearly by in seen weight. couple seen I not is definitely We've we've adults material. the in magnitude And points, don't what gained the size think our every to you're my that a That have again

Unidentified Analyst

-- Say Good. [indiscernible] grow. Okay. Peter,

Okay. job. Go Great Thanks. ahead. right. All

Okay.

Harvey Kanter

Take much care Seymour. operator. Thank more, you so

done. we're think I

Unidentified Analyst

Bye. Pleasure.

Operator

This today's concludes conference call.

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