Duluth (NASDAQ:DLTH) Releases Earnings Results, Beats Expectations By $0.51 EPS

Duluth (NASDAQ:DLTH) issued its earnings results on Thursday. The company reported $0.50 EPS for the quarter, topping the consensus estimate of ($0.01) by $0.51, FiscalAI reports. Duluth had a negative return on equity of 3.10% and a net margin of 1.07%.The business had revenue of $121.39 million during the quarter, compared to analysts’ expectations of $119.91 million.

Here are the key takeaways from Duluth’s conference call:

• Profitability and cash flow improved significantly: Q2 adjusted EBITDA rose to $27 million, while free cash flow reached $13 million through the first half. Excluding $16.3 million of tariff refunds, adjusted EBITDA was still $10.7 million, supported by higher pricing, lower overhead, and better cost productivity.
• Gross margins and inventory quality strengthened: Underlying gross margin expanded 490 basis points year over year to 59.6%, while clearance inventory dollars declined 43% and clearance represented just 14.6% of inventory versus 22.2% last year. Management attributed the gains to reduced promotions, SKU rationalization, and a greater focus on core “hero” products.
• Full-year EBITDA guidance was raised: Duluth increased fiscal 2026 adjusted EBITDA guidance to $38 million-$42 million from $28 million-$32 million, while reaffirming net sales guidance of $540 million-$560 million. The outlook includes the tariff refund but also anticipates higher marketing and transportation costs.
• Sales remained under pressure: Q2 net sales fell 7.8% to $121.4 million, with direct-to-consumer sales down 7.6% and women’s sales down 15%. Management expects Q3 sales to be affected by difficult comparisons with last year’s clearance events, although it forecasts sequential improvement and a stronger Q4.
• Management is investing for longer-term growth: Duluth plans to increase upper-funnel marketing, expand AI-driven search capabilities, improve stores and e-commerce, and develop wholesale channels following early momentum from its Amazon launch. Core men’s products continued to perform well, while the company views AKHG as a smaller brand with selective long-term potential.

Duluth Price Performance

Shares of DLTH opened at $4.52 on Friday. The firm has a market cap of $171.77 million, a PE ratio of 32.29 and a beta of 1.38. The firm’s 50 day moving average price is $4.11 and its 200 day moving average price is $3.52. The company has a debt-to-equity ratio of 0.32, a quick ratio of 0.30 and a current ratio of 1.62. Duluth has a twelve month low of $2.02 and a twelve month high of $5.09.

Analyst Upgrades and Downgrades

DLTH has been the subject of a number of research reports. Wall Street Zen upgraded Duluth to a “hold” rating in a research report on Saturday, May 23rd. Weiss Ratings upgraded shares of Duluth from a “sell (e+)” rating to a “sell (d-)” rating in a report on Monday, June 8th. Zacks Research downgraded shares of Duluth from a “strong-buy” rating to a “hold” rating in a research report on Friday, August 7th. Finally, Robert W. Baird reiterated a “neutral” rating and issued a $5.00 price objective on shares of Duluth in a research note on Friday. One research analyst has rated the stock with a Strong Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, Duluth presently has a consensus rating of “Hold” and an average price target of $5.00.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of DLTH. Empowered Funds LLC raised its holdings in Duluth by 9.3% during the first quarter. Empowered Funds LLC now owns 101,447 shares of the company’s stock valued at $177,000 after buying an additional 8,597 shares in the last quarter. Barclays PLC raised its stake in shares of Duluth by 32.2% in the 4th quarter. Barclays PLC now owns 58,043 shares of the company’s stock valued at $121,000 after acquiring an additional 14,136 shares in the last quarter. Blair William & Co. IL raised its stake in shares of Duluth by 17.2% in the 3rd quarter. Blair William & Co. IL now owns 113,510 shares of the company’s stock valued at $444,000 after acquiring an additional 16,678 shares in the last quarter. Squarepoint Ops LLC acquired a new stake in Duluth in the 3rd quarter worth approximately $85,000. Finally, Quadrature Capital Ltd acquired a new stake in Duluth in the 4th quarter worth approximately $52,000. Institutional investors and hedge funds own 24.39% of the company’s stock.

More Duluth News

Here are the key news stories impacting Duluth this week:

• Positive Sentiment: Profitability sharply improved: Duluth reported second-quarter revenue of $121.4 million, slightly above expectations, and diluted EPS of $0.50 versus the consensus estimate of a $0.01 loss. Net income rose to $18.4 million from $1.3 million a year earlier, while adjusted EBITDA increased to $27.0 million from $12.0 million. Duluth Holdings Second-Quarter 2026 Results
• Positive Sentiment: Raised EBITDA guidance: Management increased fiscal 2026 adjusted EBITDA guidance to $38 million-$42 million from $28 million-$32 million, while maintaining its $540 million-$560 million revenue outlook. Duluth Raises Adjusted EBITDA Outlook
• Positive Sentiment: Margins and balance sheet strengthened: Gross margin expanded to 72.8%, or 59.6% excluding tariff refunds, supported by reduced promotions and direct sourcing. Inventory declined 15.5%, and the company ended the quarter with approximately $96 million in net liquidity and no borrowings on its asset-based lending facility.
• Neutral Sentiment: Analyst stance remains cautious: Robert W. Baird reaffirmed its “Neutral” rating but lifted or maintained a $5.00 price target, implying limited additional upside from the referenced price.
• Negative Sentiment: Sales weakened: Quarterly revenue fell 7.8% year over year. Direct-to-consumer sales dropped 11.5% because of lower web traffic and conversion, while store sales declined 2.4%.
• Negative Sentiment: Earnings benefited from a one-time item: The quarter included $16.3 million of tariff refunds, contributing approximately $0.44 of EPS, so underlying profitability was less robust than the headline results suggest.

Duluth Company Profile

Duluth Holdings Inc operates as a specialty retailer of workwear, outdoor apparel and accessories for men and women under the Duluth Trading Co name. The company’s product line includes work pants, durable outerwear, performance-based shirts, base layers and specialized gear such as tool belts and backpacks. Duluth Trading Co focuses on combining practical functionality with style, targeting tradespeople, outdoor enthusiasts and anyone in need of rugged, long-lasting clothing.

Since its founding in 1989, Duluth Trading Co has grown from a regional catalog business into a national retail chain.