Duluth Holdings Soars 11.42% on Baird Upgrade, Q2 Earnings

Duluth Holdings Inc. (DLTH) saw a significant rise of 11.42% in pre-market trading on September 5, 2025, driven by a series of positive developments and strategic initiatives.

Baird upgraded Duluth Holdings' stock rating to 'Outperform' from 'Neutral,' setting a new price target of $7.00, up from the previous $2.00. This upgrade reflects the company's improving financial performance and strategic turnaround efforts.

Duluth Holdings' Q2 2025 earnings call highlighted a resilient quarter with improved margins and strategic cost savings, despite sales challenges. The company reported a net sales decline of 7% year over year, but achieved a 240 basis points expansion in gross margin to 54.7%. Adjusted EBITDA increased by $1.5 million to $12 million, or 9.1% of sales. The company's liquidity stood at $73.3 million, with net debt at $26.7 million.

Duluth Holdings' turnaround efforts include a promotional reset to drive higher profitability, cost control measures, tariff mitigation strategies, and disciplined inventory management. The company has reduced the depth of promotional activity to elevate full-price sales and improve average unit retails. Additionally, Duluth Holdings has implemented cost savings initiatives, aiming to realize $10 million in savings for fiscal 2025.

The company's strategic initiatives have yielded tangible benefits, including enhanced gross margins, reduced expenses, and lower inventory levels. Duluth Holdings' focus on product innovation and customer engagement has also contributed to its turnaround efforts, with successful product launches and marketing campaigns driving customer awareness and sales.