DXLG - Destination XL: Q1 Was Bad As Expected; However The Stock Is Still A Buy
2024-05-31 09:22:16 ET
Summary
- DXLG reported disappointing Q1 results, with sales down 8% and operating income falling close to 50%.
- Despite the negative results, DXLG maintained gross margins and reduced SG&A while investing in stores, marketing, and a website rebuild.
- Management had warned of bad Q1 results in 4Q23, and FY24 guidance implies a fall of 5% in sales, so the results were not unexpected.
- The company trades at an attractive multiple, even considering the guided 5% sales fall. However, the company would only break even if sales were to fall 10% for the year.
- I believe the 5% scenario is more possible and therefore still consider DXLG a Buy at these prices.
Destination XL Group ( DXLG ) is a retailer specialized in big and tall men. The company has 280 stores in the US....
Destination XL: Q1 Was Bad As Expected; However, The Stock Is Still A Buy