NEW YORK: Duluth Holdings Inc. said its earnings fell 50% in the apparel retailer’s first quarterly report since it went public last month, although revenue rose.
Shares were up 1.9% to $16 in recent after-hours trading. Through Thursday’s close, the stock has risen 31% from its initial public offering price of $12 a share.
The casual wear and workwear purveyor is known for its humorous marketing of its products, which include Longtail T-shirts and Buck Naked underwear.
The Belleville, Wis., company generates the vast majority of its revenue through online and catalog sales. In the latest quarter, such direct sales rose 27% to $46.5 million.
Chief Executive Stephanie L. Pugliese said Thursday the profit decline in the latest quarter mostly stemmed from expenses related to the company’s growth, including the implementation of our new warehouse management system and third-party logistics infrastructure. Advertising expenses also increased as the result of television advertising campaigns tested ahead of the key holiday selling season, according to Ms. Pugliese.
For the period ended Nov. 1, Duluth reported a profit of $1.5 million, or six cents a share, down from $3 million, or 13 cents a share, a year earlier. Analysts polled by Thomson Reuters expected the company to report break-even results on a per-share basis.
Revenue increased 30% to $55.3 million, in line with company expectations for $55 million to $55.5 million.
Gross margin rose to 57.2% from 56.2%. Overhead costs rose 44%.
