DLTH - Duluth Holdings Is Entering Risky Territory Given Its Lack Of Cash
2024-06-28 04:48:18 ET
Summary
- Duluth Holdings' 1Q24 results show declining sales, flat gross margins, and growing operating losses.
- Management acknowledges strategic problems and is considering store and fulfillment center closures.
- Despite the low valuation, a lack of strategic change, efficiency, and cash reserves make Duluth a risky investment, warranting a Hold rating.
Intro
Duluth Holdings ( DLTH ) 1Q24 results were not great, with comparable sales down and margins decreasing, contrary to many apparel retailers posting margin improvements. Merchandising problems were also notable, with some styles being out of stock. During the earnings call , the management team discussed a strategic review process, considering closing stores and fulfillment centers. SG&A and marketing expenses continue to grow despite the falling sales....
Duluth Holdings Is Entering Risky Territory Given Its Lack Of Cash