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Destination XL (DXLG)

Participants
Shelly Mokas Director of Financial Reporting, SEC Compliance
Harvey Kanter Chief Executive Officer and President
Peter Stratton Chief Financial Officer
Michael Baker D.A. Davidson
Jeremy Hamblin Craig-Hallum Capital Group
Call transcript
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Operator

Good day, and thank you for standing by. Welcome to the Destination XL Group Third Quarter 2021 Earnings Call. All participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. today’s being that advised be conference recorded. is Please Instructions]. [Operator hand over Director to I SEC would speaker conference to like Mokas, now your the today, Reporting. Financial of Shelly Please go ahead.

Shelly Mokas

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

sales for detailed COVID-XX. like call Securities that results including, availability but a to, risks some fiscal Today's explanation risks that useful certain today's release, regarding to from company, uncertainties variety the our CEO, concerning statements contains with During afternoon we Such provide would the Please on and could performance. and to to the some at will over reconciliation disruption which filings available of and Investor updated company's forward-looking our various to chain disruption, to Wednesday earnings Harvey? statements affect an other expectations supply about metrics with earnings non-GAAP discussion investor.dxl.com XXXX. cause are of information due guidance and materially uncertainties refer to is call, from discuss for filed not and assumptions also such our measures. today actual and and I subject factors forward-looking mentioned those labor Information financial is differ Commission. the limited Relations Exchange our in now turn Kanter. investors to website company's and Harvey the was

Harvey Kanter

the and you optimism about quarter as tone business hear messaging, year, look are progress is in and forward close our the Wednesday we Shelley, good third everyone. reminders making holiday greater you, My consistency morning and the at the repetition, and our in to speaking hand. which in work year our out on I you our for with today announced season. this Thank we our and results, opportunities this we hope to in

that is As the we results risk, year better goes, learning. began X short me all holiday of journey, transformation And also as season. a ahead, well we and months possible from this reputation and the executing the with of from vision, but X from to saying growth still producing given the strategy. the my is team tenacity and our as same since this our same the range is hope ongoing we reputation, just understand it inspiring mark mother mission In and volatility years well now, is will meaningful the the results. same The and perseverance transformation the

and the all of Given we March of is signs again, line. exciting the first accelerating. recovering to to that have exceeded as not ago quarterly only acceleration XX-month to the is sales, continued see build, expectations the we the how much X line began quarter, the our sales to results and our and reset once platform in that, was bottom well. In pleased see to business report drop that our the I'm second more but detour, in consensus performance business. that pandemic's that approximately in was the recovery begun leverage the operating months to top the results It have see to started our energizing. year-to-date quickly It

continues a initiatives these shortages. the this the the remarkable, and to we and our to are repositioning. is quarter, third that is level We supply in challenges demonstrate see we daily, performance brand's labor the given that traction Despite and happy are grappling responding with consumer the performance in incredibly challenges with with chain in somewhat ongoing our at the

caution in as later to in date. in the This in year's should success consumer in CEO, our specifically, the we been will comments, it always the Since promotional in our here detail quarter be remain change way. test. strong actions our continue conservative supply volatility my this consistently not confident historical set to really intend promotional but now publicly of that intent us in performance should broadly cover quarter plans, the in I've its plans, a from our to the guidance. outlook undergo despite and I a the more highly for to fourth we will engage clear abundance be anyone. very this risk our and with very fourth combination different quarter -- optimistic Without chain personal While our caused greatest surprise has brand's of been sharing in

we transparent, We in what been why. believe detailed and thorough and have

and our Given that we the the always those in variables philosophical as our control orientation and and offering outlook are challenges not control, do we we we acknowledging done versus expectations. doing have

cover X other before business I outlook, about Now our I talk things. to results the want and

release mission quarter. quarter enough And quarter being second, release. dear press greater in Wednesday to also + may serving Tall to We're our curious of of my information. make closed, a would which customers if all this our want we we for critical gratitude employees today's time wanted earlier our this on with see Big every knew everyone part our and the market an who earnings Wednesday's on and We earnings was I the call sure published attendance important First, we grow is to us third to normally to issue than see we after as if extend more release. had

most the and your and that of to. continuing just all has culture our literally themselves are body, each the it going Here day. To them couldn't and like people. their to empathy office, the Despite and in of associates engagement is your on From associates despite distribution labor times, the work. very Thank workload stores but workload, hard keep and these thank their push never and the giving associates, challenges for market challenging our of indebted you center filling the and of and passion of times stress again, At and build many managing and and our in maintaining dedication commitment truly more they one for and inspiring transparency, we've every importantly, way. and empowerment heart, their guest through Thank challenging in customer to this, very of in you. the lean struggled of they working you, that of going going in because never-ending staffing the we energize to our just challenges consumer. a the corporate daily stress are DXL. for support to every But I home a levels, look experienced. thank every be our in not my most before labor companies, all certainly of we balancing been customers are the with most proud culture for have the we for trust, resultant and DXL's this to bottom the more creates, a positions from that open It's team continue all it's the center, secret all our mental Like appropriate you. you and stores, be

today. to different with X the and to cover want I details you topics on Now

our quarter we First, quite saw high across in I third quarter and third on online our strong wanted results. the sales stores, app. to review At level, growth a

cadence our and margins. the was This gross addition, more door to AOV, In higher tight, light is at product and price. promotional a going means very markdowns higher which full out translates lower

operating leverage. and driving We our are costs operating controlling

supply Second, chain want about I we to short-term to inventory the from to labor. managing talk are across you entire how challenges

are in about momentum XX% QX, to acquisition, to presentation and achieve new QX we post-holiday QX which And we priority, those market But we will to finally, land driving customer will maintain talk #X our our and growth and and I file. pleased our because outcome are know down XXXX. that the are outcomes, greater repeat achieve minimum received While taking to need happen across customer through revenue share. customers value want levels our this We results in inventory entire to with try and order. marketing, us, levels be Ultimately, long-term lifetime you which of through our the trial inventory season. about is

also at strategies and in well and demonstration continued brand greater previous customer is the meaningful is richer even as appropriate repeat. to the and the building we repositioning. experience elevator offerings moat, with through more engage What shopping same in to explained our on the as in product profoundly, leading as regards of the edge the trial remains to pitch calls. this the Making simplify to acquisition, My deeper, DXL. technology have marketing and Our continue ongoing a follows of more digital look engagement relationship in consumer customer investments

day. fits market anywhere a else, Our place shopping culture with cannot consumer that creating to bringing vision and experience have trusted in have our as and its happiness style be rooted depth who community create any Big that guests + is a and for assortment our exclusivity its life, a retailers DXL and deliver an to and the a build be mission our in driven clothing of values the desire him body, belonging the in of a found interact employees of of distills and breadth that single to every its Tall of relationship, period, the fit level by the and few level and at and an satisfaction and experience we to other leader, curated respect fits and

me comp very for is quarter rate QX XXXX accelerated overall So start that the in second as the XX.X% let sales to quarter. from by which I'm XX.X%, results. to our to announce compared up now our reviewing pleased third

third million, in financial $X.X Year-to-date, last XXXX. third comp million to XXXX. the comparison results. were year-over-year of QX $XXX.X quarter was total, growth as to from we $XXX.X normalized was and compared million adjusted and quarter to our XX.X% $XX quarter stores XX.X% sales reference adjusted be year XXXX compared our was most Comp comparisons our As direct had given for comp brings In our leverage exceeded In was XX.X%. likely million as to our come. These remarkable of $XX.X results August, sales making we million store we've the EBITDA growth similar remained that a this a compared in In XXXX to EBITDA will outcome increased in facing. our sales was expectations, achieved rate it X.X%. us any it known truly how of QX. In the on XX.X%. It the in to to comp in million in sales compared X have October, double sales far September, to digits drifted $XX.X our of challenges is XXXX. stores, quarters direct was we been are And to standpoint,

both in growth see very conversation dollars to a our our in continue stores, by shopper We transaction. rates purpose and evidenced per

Our and developed when quarter an growth rate quarter XX% as compared second increased in the our new-to-file to improvement the just customer This increased from new quarter's XX.X% is maintained business third not growth XXXX. our direct quarter quarter store third the new rate first off of Consistent of quarter performance XX.X%. to with file momentum slightly customer sales as accelerated. in our but second our the increased, third growth only its the in

a all Our to rate By our compares are in direct August, growth rate for these comps second month, quarter. the in XX.X% September October. comps QX in XXXX. comp were XX.X% and of in XX.X% XX.X%, XX.X% which up against Again, growth

in Direct out sales Our compared as believe compared to annual the be XXXX, retail is testament to XX.X%. expect and our QX we to and just to of a XX.X% of in penetration XX% direct sustainability for approximately direct in the of we year brand. stand ability digital penetration our shows a QX under digital-first as our as XX% total transformation, full to XXXX was growth

indicates by web our inflection of marketing of in basket direct that investments size. digital in and was digital our customers. new Our in and driving growth DXL driven We a are our traffic, growth infrastructure conversion believe improvements the significant optimization combination to new-to-file

inventory better down function this challenges, of slowed, a if and this can will we that Although believe inventory do we October almost is exclusively positioning, sequentially we believe reverse itself. slowing achieve results

chain moment, We to a challenges hand-to-hand just it feels about in daily needless combat. supply say, like will talk but,

Amazon, by Finally, with strong. predominantly were off-site respect sales on exceptionally driven to originating third-party marketplaces, results

take in also launched to ramp target.com on months assortment. will just meaningful and to few we up it We marketplace expect a a October,

bit and shift merchandise and a Now let assortment gears talk inventory. me our about

categories. product to continue We across sales strong a see all performance

with private DXL, the to have but the trend of the tailored then Long backs dress our at each that New impacted third penetration and bring the network. others. quarter Our inventory in of of Vineyard New growing continue challenge be merchandise work, delays and be assortment which the is private XX% these XX% the capacity the in sales and overseas private staffing to Reebok, label motivated to which and relatively collections, throughout among and to causing Nautica, compared sportswear, designer through but business XX.X% build in share our don't return flights price despite increases. consistent international we increases. know to the quarter, the remain biggest for port all and third vendors Trucking clothing has drove second quarter, Pairing, continues is was from as challenges. goods, and At velocity, suits accelerated through composition. continued a higher our clothing XX.X% label facing brands phase in started fly reductions in chain. impacting worker quarter In of problematic, even disruption Polo, and from companies the of us label Long the of delays constraints and top-selling trend any some assortment the issues, clothing domestic has was relaxed Tailored the customers actually further seems QX to looking continue second gains oriented as to quarter airfreight problem, Tailored shortage as shirts. to include caused We York, through inventory with shipments has inbound and drivers casual a The coming Jersey. that Port see coming but selling and to we supply Beach, be is a the being X Ocean congestion price are major up and constant in our well. casual. Beach Vines even

as the reality And of could dynamic, anything recently JFK there I help of goods arriving aired it the be. We label you example and for ETA had think opaque an which will situation, I X moving sharing better is ever understand stay transparent. into but anything private in Airport. as that XX/XX

trucking days my able later, been DC the in JFK had airline where located product XX/XX, goods still the was in finally turn on Incredibly did at arrived to know not the for mind. this having received are goods? calls and shipment XXX X XX/X. load and nearly once despite the port, to was word, lot. sales, asking, weeks as and saying imagine. where pick comes located, We company XX/X, of has daily miles. up the located As We in ultimately the airfreighted and goods we our On then to not And arrived product. product you X weeks. to it The the getting the difficult, Despite might took goods travel so to X challenges burn

selling are shelves, turnover historical are our what Inventory from we we XX% performance. and up is stocking We stock.

team. sourcing Our global

successful sourcing been still, fabrics has in production penetrated at including heavily Southeast our procuring the team level. lesser needs. we Cambodia, a global to support Vietnam, first mitigating Today, has factory risk sourcing team China. to divide global that are in Asia, extent, Bangladesh But year to and, Our all in

the we to supply orders market, greater greater prices gross Our by item our sourcing allow is normal. has secure which price to through programs up platformed navigate fulfill we trying we experiencing margins. way of of million XXXX. from with Part yarn will to these over battling inflation, and over country -- us incorporate allow vendors and XXXX of and every also team is allude to protect us our With offset to to in are challenges to X speed key the availability are clearly on fabric This should into diversifying lead our chain shorten yards not flexibility. what our and XX% cotton speed source times and fall

been we Mexico, environment. for Jordan, In has third are we elevated quarter, production about enough We eligibility position of many regard India, XX%. with stores, shift been believe plans fared exceeding receive the to center, we've to and labor, Central and seasonal we their certainly the pending the their incentive associates than it impacting compensation have have but was competitive closer unfulfilled seeing group in recruit With We current store bonus season. associates, the a stores compensation. are bring now at producing manufacturing as America. our more and a sales where to initiated Traditionally, been strong open compensation rate of have holiday believe and and base unfulfilled in level expect a workers In wage But materially our to an as commission for of well our challenges, and seeing positions. by or in we able are well achieving XX%. distribution overall have the to we incontvertical their so we year-round some in a we

let's about marketing. Finally, talk

year Our we've already accomplished enthusiasm is incredibly energizing. this for

comfort, can't to and an allowed by is grounded brand that fit, to positioning private + value price, away consumer Big brands fit retailers, largely discount our from highly uniquely promotional other in to trusts that that national experience around into has replicated This by continuing driven and value an and are We a curated is strategy our builds respect an around experience proposition who built a the curated driven be us the proposition lean and assortment grounded shift of the Tall and in and label for the us. exclusive offer period. proprietary

with our knowledge is we be to promotional. need building view long-term hyper in that confidence don't Our the

the limited in quarter non-promotional we unique second consumer third we only like Just targeted for the essentially promotions were the in segment. quarter, were with

the our taking honors long-term of brand's discounter, to somewhat posture promotional what store, understands not as and is us anyone for market priority, than a else of me that is but as a big share. as not guys done #X that While further that And enhance has positioning today, better a brand to this market. means coupon in really DXL and reduced a the brings transition. And

While repeat is lifetime to in order. customer value it and and then with that acquisition again shifts and repeat starts and trial

a focus the always retention us. our It's striving on But was As on to focus and base. through better our consumers already. easier we fixated pandemic, a between retention lot to existing been Customer have acquisition. for you a battled predominantly balance and we today, more achieve efficient goal are customer has

our digital working in having attributable driven our assortment a are differentiators believe We hard that fit, that funnel, comprehensive working any to evolve amount brand-building tall. channels spend and as our big upper as attributable and that mindset times paid from CRM. singular past, we of the our and I significant DXL awareness. many said to an spend greater we marketing the such Today, store drives And experiences a and on men's and separate spend selling are other dollars our messaging

brand We of repositioning, you to influencer have and testing and brand's And to slowly outreach. connected in opportunities. now our been number must at with we investment influencers TV move we more as other seeing aligned are forward, channels. our we're we opportunities starting the and multiple socialize a important, should seize already defined increased other Hopefully, materialize today, and across a and to partner content. messaging streaming; say have to also on identified point have I'm where we happy And

public industry, -- style more in active us and outreach. this certain cycle publications. life becoming you have regard, seen magazines and relations life in in And are trade We featured

XX there analysis. months, We're complete past understanding ways more understanding engage in segments in personalized worked we behaviors, vendors, demographics. by are customer, greater which have XXXX, by persona do are work And understanding investing research in customers to walk and of us more the with and customer. driven the its his a quantitative that area. QX to in qualitative allow to style, to more of a helps to we deeper aspirations, shoes mostly but significantly our customer into using much and to of create us This of this acquiring third-party Over the and and a to our is further in

are further consumers' with apparel his shops? job about will tall groups, doing through XXXX and that his focus for he defendable my We gathering referred articulated and everything staff Where makes to talking in conducting heard we wholesale. and XXX-degree will business, this in strengthen XXXX. clearly big as I back engagement give our our let moat, can the to to research hope, or on potential what guys guest his to consistency we a her? have his mindshare. interviews, believe feedback beyond pain life points? refine and our said We our with be positioning What team big reputation, in finally, vision do have our our you as surveys you was Why and tall as QX bringing from the lead how reminded also leading interactive shops experience are me needs, have been in men's the about greatest we and the that center, work tick, from DXL positions competitive have are before, wants our and are so today, makes is it. and us of We laid a are update our and the for today position, retailer continue improve? at and And the it or better what an are our conceptualized the what shopping growth what and thoughts his he stores other We web perceptions do messaging this comments in to My now we teams.

our supply for generated compared challenges we in $X.X discussed business, our total, $XXX,XXX In have mainline wholesale, of third the primarily in with sales million quarter we wholesale as the chain experienced is 'XX. to Amazon, of too. in Just business, which quarter

The force in building Peter? move slowdown hand business' to like wholesale in ways on publicized of financials. a to the the and our is towards on than determining turn the the supply through issues And that sales work on like We procuring core major and impact and now, chain Peter business forward. business issues are forecasting to to continue wholesale improving and highly then in respect would has impact challenges supply to update together over a have felt our for we call been inventory. here and with I an greater the chain

Peter Stratton

and quarters quarter's Harvey, Like to I'm and morning, you, of our multiple this growth. string Thank good everyone. sequential together Harvey, by ability excited performance

With financially, challenging on of seasonality that the sales, strength quarter after earnings we of against discuss third are I we delivered QX are guidance, QX of. performance, full for has of for comparability. historically our results. more have sales we also I been and a proud year, the this us but Based quarter my increasing XXXX review you earnings comparisons which will quarter's again with better will focus the year I our

margin. to Harvey discussion into right gross so detail think going has I covered already, I'm in jump the sales

a of improved costs, for merchandise XX.X% fiscal over Our rate points low coupons markdown low of gross very comprised was throughout selling third us basis a basis and occupancy in more improvement was specific are for XXX targeting fiscal X quarter very XXX We of of of and quarter merchandise of compared to maintained using in XXXX XXXX. segments. Markdowns primarily The rate, of gross only and the combination the basis promotional of The XX.X% XXX margins XXXX quarter third leverage. factors: points customer inclusive as the for promotions and margin the posture full-price was occupancy a rates. XX.X% clearance. margin point improvement margin of result

margin. reduced clearance quarter, inventory greater to a normal tiers penetration of this Our capture and was even very we discount also low share our

levels expect the Store in rent as We decreased impact freight the we we and XXX estimate in to promotions basis costs compared the to stores limit costs as to for of of pricing by goods. but points Partially lower leaving were containers beginning get elevated of a part $X.X result delays reductions airing increases more periods strategy. unproductive product freight We a temporary million expect in to higher our be shipments freight by level approximately pandemic. these since sought remain paying clearance QX the benefits of from of lower markdowns to costs before XXXX adjustment ongoing our as the better. in be things to future negotiated have closing and offsetting occupancy

restructures of lease reductions of where we our from Although savings individual been has half XXX of the deliver we slowed, including over pace to the of secured more rents fiscal continue $XX.X store restructured market. $X.X the we leases, of those are the in benefit XXXX, new stores have expected have which life leases, the savings over to than million over chain, million expected in XXXX. Since

selling, me move and administrative Now, let general expenses. on to

offset for accruals headcount levels, approximately on by expense, second merit our XXXX were the last SG&A dollar sales, to fiscal advertising XXXX. year's As leverage of results. rate quarter costs SG&A third of and higher improved XX.X% and but for fiscal reductions. sales fiscal percentage and flat due as a incentive-based Increases store were to basis, expenses corporate from of the savings in adjustments On XX.X% XXXX the second for quarter XX.X% a of quarter XXXX were compared to

quarter We $X the sales of quarter third XXXX. are to was third Adjusted XX.X% in compared Net XXXX. as quarter Corporate fiscal the being in support fiscal $X.X the as of $XX.X in in million net third XXXX the reductions for diluted designed made of $XX fiscal the in to million very our of possible of despite fixed adjustments certain quarter to compared third share quarter income a quarter QX of third as were the for and a distribution areas million investment were share merit our net third as and a quarter costs, cost new-to-file third the XXXX. accelerates. the $X.X XXXX of for quarter labor costs to negative per diligent the center greater third $X.X XXXX. in million sales XX% was where costs, a sales X or and share about many challenging variable of the $X.XX drive market. or million compared diluted to of diluted per for the for The fact EBITDA workforce include or XX.X% customers positive Customer-facing quarter loss a compared fiscal of and advertising loss represented preserving business XX.X% retain $X.XX which costs this increase greatest that corporate loss overhead we per of a loss third $X.XX the with million will

sheet. this that very flow balance X talk significant that years. and almost we transactions first quarter had debt-free accomplishment, we like pleased connection for turn the In are I'd Next, cash to the X in to this about. with I'll I'm to time report

$XX.X First, prepaid term September, million we in FILO loan in full. our

Although had our credit on loan, of revolving of at facility. term this left a interest years it significantly to was higher X over rate X.X% compared we as

The May million new at set which second to facility of expire facility and used old our old more credit $XXX a us revolving The October end to old which was inventory term, seasonal replaced facility. XXXX and credit provides business XXXX. the support has transaction, the in favorable that and bringing the closed new secured October, of credit was be facility, in purchases terms Like credit future a it the needs. is that can to X-year facility, primarily inventory are by than far credit other our

new the of had the had borrowings of end availability. quarter, credit under of facility third and million $XX As excess we no the

unamortized of for of million expense prepayment the the with the financing as for a write-off penalty connection $X.X FILO in reflects interest well QX $XXX,XXX loan as early termination costs. of Our

lower credit will FILO loan new high interest the benefit rates. the periods future from and retirement of the facilities However, interest

focused cash of fiscal us the capital is as cash compared to from flow in a the balance of end the access the a XXXX. very due of XXXX flow capital months cash for good expenditures of improve at interest By on to customer quarter for maintenance, of and cash period further rates, opportunities years our at and feel of debt and positive improved now $XX.X fiscal reinvest primarily free $XX.X expenditures was ROI-based to and to our we use $XX.X we the XXXX. of position. This experience. million. no is end use are $X.X we low QX XXXX free about $XX.X low to The cash back flows, enabled free comparison, million will into balance with and end define our which With debt third net capital $XX.X earnings. of same improvement what in first operations cash customer cash of at Our counts flow, fiscal our million liquidity QX the X less million After looking million XXXX, for debt grow our that proceeds a was million as primarily business

investment: focused but technology, Harvey talked add just and extensively and thoughts marketing, currently X stores. me let are technology areas a of few has on stores. We marketing about pretty on

of be invest we going First all, to stores. on with are selective to where

store are to are gaps portfolio, some looking do selected We are to broad-based business a there market in and but we how stores whether with and to further. address. we resurrect which share direct dovetail we our DXL are grow choose planning opportunities the believe of our there at complement Ultimately, campaign not may rollout stores,

As supply this enough battle it inventory a secure in than disruptions. demand before, to had been has stronger constant year expected the ongoing we Harvey talked chain customer with about global

lows $XX.X and to Xx over to at Consequently, to inventory XXXX, XXXX, October million XX, at X, and inventory XX% Our XXXX, our million XXXX. our flow inventory as at million $XX.X up $XXX.X XXXX, The and are vendors slower balance compared compared in XXXX, certainly was around XX, as October XX, quarter the down levels at our of record just or levels. to than Clearance as turnover XX, to from of X, compared November also at XX% expected. XXXX at historical product of October X.X% November XX.X% X.Xx. is represented levels third October has at been

what to I'd However, in in next. you like our share with our checks shipments confidence given pipeline revised on which is the specific us today outlook, has

raised Our results our for a we exceeded our have quarter expectations, result, guidance. internal full year and third the as

a and are taking light we situation. quarter, for conservative inventory While chain cautious we supply approach of optimistic the fourth and strong in are a issues

$XXX expect with full $XXX sales year, from million e-commerce million range to For approximately to we of XX%. penetration the

expected to $XX per $XX to for expect million be adjusted income share. range is $X.XX million, EBITDA net $X.XX from to to full We year and the

-- high million cash the EBITDA be the XX% sales $XXX $XX Finally, million in sales million. end, expected in quarter high $XXX guidance high XX% excess free continue The of and of be working of million margin. to We this we at our flow and or XX% double-digits much There is unique adjusted done, the EBITDA low in EBITDA comp work a is year of to will shareholder $XX a over adjusted rate range. on shopping greater. to fourth to is nearly like margin of of end a to margin the is would and gross we the term, believe imply I sustain end XXXX At it Harvey sales value, long experience an still are and turn all that, to And thoughts. to tall DXL closing big the for drive premier back with some into for men. would growing rate

Harvey Kanter

Peter. Thanks,

that As levels you've allow we actions We and plan. lies navigate and we our ahead. staffing execute heard the have cautiously need with conservative issues are strategic optimistic our us have to we and truly what in projections here greater supply to our potential to pleased and the far now, the accomplished, will remain that labor we chain hopefully recognize product

on app have employee designers consumers our will our confidence and position do all we shop our created And gives we'll and -- most be financial of exclusive solid that we what to share all, incredibly in do and the is tall market. to browse, best. gaining customers that our in to operator, have for the us and and this price an giving a all and most we big the luxury our uniquely And in we we and extensive questions. And finally, value purpose, to history. we know base believe that, interact. underserved the creating their by with We are best, brands, memorable incredible assortment that on committed stores, consumer and of passionate place We into continue strategy company's to feel take online, look inroads most offering experiences engage make an to and essentials from guys

Operator

Instructions]. [Operator

from Baker comes Davidson. first Our with Michael question D.A.

Michael Baker

quarter, So on hate idea I conservative focused but wanted cautiously said of get short-term the -- think I be rebound you really be the would something think, rebound, from can November low of a we lines stuff. to the that you saw digits I But optimistic. double is But along just Harvey, to your I guidance you for October. fourth until in myopically think what

does product does I if you you checks November in. question the rebound, When the can product know can guess comments when is, When become square Peter's I if guess, And that late? too get got You said you actually do in? we the you get stuff? that give that confidence. it with

Harvey Kanter

a Mike, great first much things. are you tell very weeks November QX. of high level, question, a it's X aligned and I'll One, our at X.X to

very we X they X day that people's move we the over The goods us that's reason a goods didn't hopefully, point can day. to day. on expecting that example to to in the plane and we're reality But airfreighted through for a specific get understanding, in. get like airfreight and goods. the day So next reference that are to weeks good will you believe When come in, you're it pipeline highlighted back on I pass it's is feel where we receiving and

single are, every what XX% are XX%, in. inventory, It's almost we our the so we fact that chasing Given bring we over like behind it. cross-stocking And turn goods, selling we're is fact, day, in up

believe happens day can't question then up, likelihood that And it's well, they outperform. single so conservative greater and that to But once the answer stacking way start in outcome. there's greater we’ll given we to day we happen and to even that a that, up, the doesn't every any and the to more is we fall supposed continue catch back

Pollyanna. the of our confident It's trying not there wanted with I'm end group to to is clear we'll risk. done, this the reality we of as what So situation. but I year be we gave believe what guidance. And get be that's and the just

Michael Baker

fair. in or And that's to Yes, line third quarter necessarily clarify, with November than not just then better levels October. quarter, to third back

Harvey Kanter

-- is was going to company bridge. My unfortunately, lot in have there's ended. that quarter's that, was but to stores X.X where as fact, our pass back is the a reference is have about our weeks, accelerated what yes, performance comp of overall and of to total the the under first in point QX October, water There

get to So ahead we're skis. not our just of trying

Michael Baker

more One I could. sense. Makes Understood. if question,

you here. qualitative one talked top marketing question I a standpoint, lot quantitative is in brand you than and I what you've of there bigger do marketing, that lot was think From of of on the past, I the of, of buckshot sort all shock call, a funnel. qualitative think a on like building... changes rather that Just about made a there's the guess just

Harvey Kanter

National TV. broadcast

Michael Baker

Yes, helping for exactly. me that. you Thank articulate

You moved that. away from

us in next X doing were there? give then you sounds are we marketing years? can past go And that Or -- of it like the you the spend some that quantify, moving percent working? expect couple over to moving Now at or like the you looking sense what what's by you're dollars wasn't towards not do we're up

Harvey Kanter

when specific is X greater national ability I'll and tell across on our The couple streaming blunt a when broadcast things you're gave level our you, I target and Yes. examples, of customer TV YouTube TV on you're to but you than Hulu doing examples, basis. marketing exponentially as a

push other we we more broadly. That creating of among our question, consumer. streaming we're And up the efficiency also pushing So expect that an said, venues added is percentage answer will being to get to sales. to your

consumers, after the group, we're upper somewhere is for larger to spend. as turns of in your then, trial the change the to trial, and target to consumer share repeat. first turns of a accomplish X% mind purchase, should awareness But creating that of I brand we of much to repeat, repeat, and after So going of acquisition then go going market, South part said, about greater talk we'll the and how from to to and way we're X% continue share important -- and North if X%, most

be And productive said, of into more shotgun top is targetable so than, that shift, as but it's you approach. spend there marketing should funnel shifted

Operator

comes Group. Hamblin Capital question with next Our from Craig-Hallum Jeremy

Jeremy Hamblin

bit kind on men's kind inventory follow-up of strong question other, just you to look wanted other struggling on call does your can versus there what mix acquire Can QX your more Any in a Is very any which of you suits, clothing? typically tailored you of that? of and share been product or the And you particular the are deeper. insight little sounds inventory, there to like mix? current seasonality out kind I margin is, then into get it's categories pieces in it where have other the on rates seasonal how quarters? trend are product

Harvey Kanter

Yes, it's Harvey. I'll take that.

in So of just what say about first I revenue. clothing, have own And suits tailored expectations. shirts dress we terms and inventory exceeded that, and about less all, when of it's our examples X our prime more

the pretty has were goods chasing to but are inventories And at level, a just heightened so positioned, continued now actually we our business well accelerate.

have things been just raw shift that said, remarkable, able their Now capabilities Ethiopia. was really from, team rather find of that I materials think, one it about to our greatest and global I sourcing the they

they I distribution goods and Tuesday. could Mexico. they've headed if produce, don't of now end me the we into able center but that, the the Mexican at to had get into on quote are produce with And then been were the goods that think literally was to fabric, producer it shipping that work December capacity

would Face, I with I and we not to agility, it's sweater very remarkable been the to before, core is movement ATS outerwear have say the are our speed Columbia question D.A. or as question, and typical perfect fluid is out, chasing called the Ralph And is, as and Vineyard Davidson, where dynamics North has doing in. clothing conversely, which that kicked hope as Vines, in even little these the business of seeing talk we're tailored and positioned expectation So the when overall how getting inventory market business addition amping about to now in are I right their colder, moves, for. weather would And Lauren, ability order. back our get things what kicked us to much goods. a of our actions like at But certainly, Nautica, has our in strongly just from examples we're Mike

an feel and receiving we XX% keep speaking, analogy I well I have goods Normally, of we we keep And but grocery inventory you're down just to a more and flowing. so it's goods. that. And use as faster, positioned, relatively turning that wouldn't much XX% store. to say than But just have when you're pretty anything like else,

Jeremy Hamblin

That's color. great

Okay.

Turning of another to kind question. QX

a So of p.m., years store hours have from hours X continued at this ago. reduced couple XX a.m. to

question, if we and you to you about spent a then part December? unpredictability, make inventory because marketing in of has money position, type point going Or already? what type going understand Are As p.m.? pull ability the what but the p.m. holiday totally of X are if follow-up to and that to invested of get marketing into adequate as the season, it hours the been you to really maintain thickest your XX kind And investment, do holiday back sense of you given do you on go to don't risk have have to doesn't kind inventories? -- ability have of the

Harvey Kanter

One, questions. different X we are asked hours, store You not hours. store extending

stores across always the big hours. grown of they ours, is And literally digital, this. ask that conversations we they're talked of already And shop based of have that about, our get decide if and business, that our digital Google they they on shopping, look associates. we're even Google stores our the that we've and specifically, pushing and tall We transformation, when online, digital as for on and used hours. customers not every and always there a DXL, and to believe levels the a hours at terms we that for store of they customer part cognizant about RSMs of what is in empathy very I and had the store in about incredibly in lot even done, have ask the we are harder all really actually them time of them our when of people have of lighter marketing. about and the robust customers challenges families engage the know much to talk VPs We part to in out regional impact With information. stores, equally totality, and we folks day managers, went them. multiple concerned that's and believe, extending And And the are

more intend the the it long So open not of to is, we and short do hours.

even and a you asked allow I marketing, marketing. at we're given And that positioning. us lighter tell and question stores that? recognition other in the and the which especially better second I go haven't question is those are customers' stocks what the that doing We of would our see we're that our that would then will better can we're hours And but QX, do the the way really our getting we marketing back we the is to the are floor. business. you full, look terms can into And was I think actually in rooms, comfortable of bad, the about harder do what in spend where that is, I ask investments we how question, certainly not relatively lean marketing, And inventory. We fast things selling on when lean the in appreciate inventories especially store, in think even and were And looking would certainly you'd you is question I work. agility in walked believe to competitive set, we ways, if our more pull to but potentially and if

Jeremy Hamblin

for stores then for and me on look sure. Yes. good Last it turn one over. our The stores could walk I

you've one a for of excited been pretty talk about exclusive terms here new In 'XX. thing brand relationship a ton about didn't you

color mix brand. you stores? percent to and not the to term it kind will could be? expect for other And floors that room think out? make of more can Top product yet you as to be have above? brands do in itself, What on of is the used take When I a XXL Is necessarily for it around but you there that, you've provide brand X the any the

Peter Stratton

top think a repositioning said. The with is I'm brand's what selling the as excited Jeremy, X about might Yes, success based is brand the actually I What top a them, top really of have today. I we've you've actually would ways selling brands. on along our X globally really as brand to It's ours engaging brand X misunderstood brand of we, company, and the regular opposed of X out with will of discounting, what is pulling other ways -- this and consumers call nationally priced only engaging distributed it. brand-centric And and in distribution. the retail coupon be retailer

sizes, + And to brand entities. which in from so normal and be we continue will it I'm to or In itself. Tall. Tall, just more will Big It's X is only outlets + we across And specifically + X expect be to the Big tremendously it brands, very sell the retail for us X today. referring sizes top buy non-Big distributed consumers DXL of other have revenue sell as revenue Tall as to and it only clear,

Jeremy Hamblin

That's helpful.

in? on So where above comes exclusivity XXL the is

Harvey Kanter

announce Yes. done, until in a it's to that next And something announce brand. with partnership the want that we just year. not Honestly, will next year we it's but

Operator

with Davidson. comes Our D.A. question from Baker next Mike

Michael Baker

lot more. asked Yes, made about store Why double Peter, with The what's count that are comments, interesting. dip figure and a I'd count. the a back It's We store get right come X not? you Friday.

at for my get I because think there. me had if That X you don't XXX that notes I'm said wrong a seems I have low this, point and think I year-end. correct -- about little it will

about an long-term store really talk interesting But are or you sounds you there can some guess the opportunity some make your like And any sales that's comment. guess even then I I think right what's I rebranding is now? might It remodeling. strong, So sense. which does stores, open count for

you with stores, some DXLG have doing these or stores? become those DXL still those? Male You eventually of stores Casual older are Do what

Peter Stratton

Yes. Great Thank Mike. you. question,

dense be of store XXX there be we're year, end couple to, maybe at populated, X where carefully of the equation as the One, could as So looking in don't store that alluded figure end enough where that go very something no, said, the This could highly and of the from we're is store not year. to I to at portfolio the is different gaps we I next at XXX in it's have a we because, will and there's market we highly trying we be stores. out this a actually prioritize. at but parts stores and to count, X very, want that's to possible we of that

are are modest. don't opportunities male stores the about I And those also happens think casual with the the there some and it's you there. think I casual stores. but opportunities talked then across country, what male ultimately

I couple lot we've lease stores As of expiration and renewal of years. for awful mentioned, come that got an over the next those up

cases, will be be a getting we In basis. case-by-case do be want to other some on looking remodeled. we'll relocate. cases, So at at looking them they In we'll

as rate. is see store the dynamic a end do merit and a So XXX, store each I continue store is on I fluid at renewal. could its we'll those question eventually very up the each message about come we what I going with Where but at but precipitous make us evaluate as to and come own it's that, as to think said, up, overall, not choices for count down, we to

Harvey Kanter

to so didn't we we and the data at brought I we're for the a lot is metrics, market opportunities. on that Internet-based capita about talked digital And our to looking and when hard atrophy, per say of that, did that by either that who practice speak. revenue always down I one have we talked double looking at pretty just I -- via white of have do. things one. space digital our joined, against working One thing or customers and as muscle, geography geography, to really often fill-in at analytics wanted we didn't And distribution have I've all it just a I publicly

the there is a and openings opportunities consider recognition shopping store of driver's potential by point, have the opportunities Peter's markets, will for online, openings in to our where those driven are. And greater seat. consumer we be the store that So to they're lot will if be in

grow Now as stores be does the with -- Peter markets think penetrated allude I that but are will to yet. store it stores counts, heroic to both don't not it fully opportunity in said,

Michael Baker

seconds direct percentages month if not. more total are of might to Makes clear. comps some estimate the to do it, on the Very by you based this by One come by to and month, up last, can we and willing math but make XX stores, with gave sense. data, us everyone's maybe you an give if But maybe comp add in life you easier. it

Harvey Kanter

Peter.

Peter Stratton

Yes.

sorry, So Mike.

looking So are I'm quite comp what not for? you sure

Michael Baker

numbers on… understand have can company -- total direct number So as the total that’s it, I of but also company monthly a you comp gave, -- and weighted were comp, you comp store the sort

Peter Stratton

sure. For

I did that there mention we in somewhere. think

QX, For total the comp was XX.X.

Michael Baker

I No, meant monthlies. Sure. the Sure.

you You gave the it. maybe if I I each the gave monthlies But by missed and in did monthlies segment. I don't recall total, -- know don't

Peter Stratton

it. Got

Okay.

it XX.X. it was was And XX.X. August, XX.X. was for XX.X%. it September, October, for So

Harvey Kanter

-- we seeing are. we of an enough. expectation is grew was grow grow we time where before, be last… now the are believe enough, didn't to that you as just inventories caution trailing And if would the receipts. continues, were, some, I one Just said but didn't And we they we'll expectation they acceleration level they I our we And creates as they that where maintained absolutely, that that back have for

Michael Baker

strong from in So Like quarter. throughout a pretty no say, to XX, just going XX that's I there's shame to was going the trend that.

Harvey Kanter

we Well, that. appreciate

for question, one time wrap. have to last we have we think and I then

Operator

with Jeremy Hamblin Our Capital last Craig-Hallum comes Group. question from

Jeremy Hamblin

remarkable of job done have a balance sheet. the guys reshaping You

ones add about thought almost going go-forward $XXX are back dividends, about out et XXXX, CapEx million used company go your you're buybacks of million cash, if that Or that's in that there at stores to like on all build do basis? is other with huge been shareholders to a given it's but special not some ton XX% probably NOL, our you're -- you You projection, also By via cash a needs. a of you investment know capital can your like do by has What have run allocation the of new or some to do how that cetera? relatively not low $XXX it's have you problem market and cap. I Obviously, even their think look that to, opportunities? going -- a you at... would

Harvey Kanter

Jeremy, to I'm level. that quickly high really a going Harvey. handle it's at

terms how and view, do that interact give The question it's I a we terms continue at in make or not and in is store will sizing still to look but consumers' at to it's That showroom of but they an in with made not digital a enough, Technology a it's, need the showrooms where example example what technology. them consumers. a with often front, us. it's of digital digital First no of and relationship customer-facing the our foremost, size enhance is and there's allow technology-driven, even decision we measure. commercial technology point to about digital

technology would investment And be third infrastructure. one around big be second business. extending our in the would driven The

delivery. infrastructure like speed to and market to things So get

more do. that distribution to After East We're would Coast. X that, any which need any at or shareholders, we direct we're are on at in articulate continue be are all return at. forthcoming are we But and are they that. great no planning will the Board by other those point what have to look look means potentially evaluating a company good would to detail great elements that We able for decisions center their where to

Harvey Kanter

be safe, we I a and interest. to And season and are to for the front with thank look the the Happy everyone opportunity unfortunately, well, holiday forward your us. and family end we I And their Be at Hopefully, couple wish a with you and talking same of minutes of healthy in an to that, stay for Christmas everyone Thanksgiving. over. of safe, QX.

Operator

for you concludes conference Thank call. This today's participating.

now may disconnect. You