Duluth Holdings 2026 Q1 Earnings Misses Targets as Net Loss Widens by 94.1%

Duluth Holdings (DLTH) reported its fiscal 2026 Q1 earnings on June 6th, 2025. The company faced challenges as earnings per share (EPS) missed expectations, with a loss of $0.45 per share compared to a loss of $0.24 per share in the previous year. Despite maintaining its fiscal year 2025 adjusted EBITDA guidance, Duluth Holdings is undergoing operational adjustments to simplify business processes and improve financial health. The guidance remains in-line with previous estimations, reflecting the company's ongoing efforts to stabilize performance amidst a challenging economic environment.

Revenue

Duluth Holdings experienced a 12.0% decrease in total revenue, which fell to $102.70 million in Q1 2026 from $116.68 million in Q1 2025. The direct-to-consumer segment generated $62.55 million, while retail store sales contributed $40.15 million to the total revenue.

Earnings/Net Income

Duluth Holdings reported a deepening loss of $0.45 per share in Q1 2026, a substantial increase from the $0.24 loss per share in Q1 2025. The net loss widened to $-15.26 million, marking a 94.1% increase from the previous year's $-7.87 million loss. This reflects a challenging EPS performance.

Price Action

The stock price of Duluth Holdings has climbed 4.89% during the latest trading day, has climbed 3.76% during the most recent full trading week, and has jumped 12.21% month-to-date.

Post-Earnings Price Action Review

The approach of buying DLTH stock following revenue misses and holding for 30 days poses significant risks, given the company's underperformance against the market. Since the start of the year, Duluth Holdings has recorded a 27.5% loss, contrasting with the S&P 500's 1.5% gain. The company's history of missing revenue estimates further complicates this strategy, as seen with a 12% decline in net sales year-over-year for Q1 2025. Despite exceeding EPS estimates by $0.06, Duluth Holdings experienced a notable 12.72% drop in pre-market trading post-earnings release, indicating negative market reactions to its financial results. The stock has decreased by 39.38% over the last 12 months, with no positive EPS revisions in the past 90 days, underscoring continued negative sentiment. The company's high debt burden, with a debt-to-equity ratio of 0.89 and a weak financial health score of 1.64, suggests potential liquidity issues that could lead to further price declines. While strategic initiatives aim for long-term improvements, they may not positively impact the stock in the short term. Consequently, investing in Duluth Holdings based on this strategy may result in considerable losses, prompting investors to seek more stable opportunities.

CEO Commentary

Stephanie L. Pugliese, President and Chief Executive Officer, emphasized her commitment to Duluth Holdings, stating, “I am back at Duluth because of my belief in this brand and its potential.” She identified three key focus areas: enhancing brand awareness, innovating solution-based products, and improving customer service. Pugliese noted the need to simplify operations to restore financial health, indicating that the company would reduce SKU counts by at least 20% by spring 2026. She expressed confidence in the team’s ability to drive profitable growth, stating, “I am confident in our path forward,” while highlighting the importance of decisive actions to navigate challenges.

Guidance

Duluth Holdings is maintaining its fiscal year 2025 adjusted EBITDA guidance in the range of $20 million to $25 million, with expectations of achieving over $10 million in cost reductions. The company anticipates double-digit reductions in year-end inventory compared to the prior year, alongside a focus on managing tariff impacts, which are projected to incur approximately $14 million in additional product costs. The strategic initiatives include rationalizing product offerings and optimizing the store portfolio, with plans to close underperforming locations and open two new stores in priority markets.

Additional News

Duluth Holdings has announced several strategic changes in the past three weeks. The company welcomed back Stephanie L. Pugliese as President and CEO, marking a significant leadership shift aimed at streamlining operations and refocusing on core strengths. Another key development includes the company's transition to an asset-based lending agreement, extending to 2030, which offers improved borrowing rates and flexibility. This financial maneuver is designed to bolster liquidity and support future growth initiatives. Additionally, Duluth Holdings has initiated a SKU reduction strategy, targeting a 20% decrease by spring 2026, to enhance inventory efficiency and drive productivity gains. These strategic moves reflect a concerted effort to stabilize the company’s financial position and optimize operational performance