LONDON, UK / ACCESSWIRE / September 26, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Duluth Holdings Inc. (NASDAQ: DLTH), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=DLTH, following the Company's posting of its second quarter fiscal 2017 financial results on September 05, 2017. The clothing and tools supplier notched its 30th consecutive quarter of net sales growth on a y-o-y basis and topped sales and earnings expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the fiscal second quarter ended July 30, 2017, Duluth's net sales surged 31.0% to $86.2 million compared to net sales of $65.8 million in Q2 2016, driven by a 7.1% growth in direct net sales and a 138.3% growth in retail net sales. The increase in retail net sales was primarily attributable to an increase of 12 stores in Q2 2017 on a y-o-y basis. Duluth's revenue beat analysts' estimates of $82.8 million.

For Q2 2017, Duluth's gross profit increased 25.7% to $48.9 million, or 56.7% of net sales, compared to $38.9 million, or 59.1% of net sales, in Q2 2016. The Company noted that the 240 basis points decrease in gross margin was primarily due to a decline in shipping revenues as a result of promotions that had more free shipping days compared to the prior year's corresponding period, coupled with an increase in inventory reserve due to retail growth and an increase in freight cost from the Company's distribution center to the retail stores.

During Q2 2017, Duluth's selling, general, and administrative (SG&A) expenses increased 26.1% to $41.5 million compared to $32.9 million in Q2 2016. As a percentage of net sales, SG&A expenses decreased 180 basis points to 48.2% versus 50.0% in the prior year's comparable period. As a percentage of net sales, the Company's advertising and marketing costs decreased 340 basis points to 17.4% compared to 20.8% in Q2 2016, primarily attributable to launching the women's television advertising campaign in Q1 2017 versus Q2 2016, coupled with the planned decrease in catalog spend as a percentage of net sales.

As a percentage of net sales, Duluth's selling expenses increased 100 basis points to 14.1% compared to 13.1% in Q2 2016, primarily due to an increase in customer service expenses due to retail store growth, which was partially offset by leverage in shipping expenses from an increase in the proportion of retail net sales. As a percentage of net sales, the Company's general and administrative (G&A) expenses increased 60 basis points to 16.7% in the reported quarter compared to 16.1% in the prior year's corresponding period, primarily due to an increase in store occupancy and equipment expense and depreciation.

For Q2 2017, Duluth's net income advanced 18.4% to $4.3 million, or $0.13 per diluted share, compared to $3.6 million, or $0.11 per diluted share, in Q2 2016. The Company's adjusted EBITDA increased 26.7% to $9.5 million in the reported quarter compared to $7.5 million in the prior year's same quarter. Duluth's net income exceeded Wall Street's expectations of $0.10 per share.

Balance Sheet and Liquidity

Duluth ended the quarter with a cash balance of approximately $1.4 million, with net working capital of $58.3 million, and $28.1 million available on its $40.0 million revolving line of credit. Effective August 01, 2017, the Company's borrowing availability under its revolving line of credit increased to $50.0 million.

Store Update

During Q2 2017, Duluth opened two retail stores, one in West Chester, Ohio, and one in Pittsburgh, Pennsylvania, and an outlet store in Redwing, Minnesota.

Outlook

Duluth reaffirmed its fiscal 2017 outlook. The Company is forecasting net sales in the range of $455.0 million to $465.0 million, adjusted EBITDA in the band of $47.0 million to $49.5 million, and EPS in the range of $0.66 to $0.71 per diluted share.

Duluth updated its fiscal 2017 retail store openings and capital expenditures and is projecting to open a total of 15 stores, adding approximately 173,000 selling square feet. The Company is expecting capital expenditures of $38.0 million to $42.0 million.

Stock Performance

At the closing bell, on Monday, September 25, 2017, Duluth's stock rose slightly by 0.46%, ending the trading session at $19.71. A total volume of 99.75 thousand shares have exchanged hands. The Company's stock price surged 14.33% in the last three months. The stock is trading at a PE ratio of 33.24 and currently has a market cap of $644.71 million.

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