US: Unseasonable weather pushes Casual Male to Q3 loss
- Q3 loss remains flat at $1.6m
- Sales edged down 0.3%
- Gross margin falls 100 basis points to 44%
Unseasonably mild autumn weather and weak catalogue sales have led men's wear retailer Casual Male Retail Group to post a third-quarter loss and cut its full-year earnings guidance.
Net loss remained flat at US$1.6m for the three months to 27 October.
Gross margin slipped to 44% compared to 45% last year. The company attributed the decline to lower merchandise margins and increased occupancy costs.
Sales edged down 0.3% to $88.7m primarily driven by new DLX stores and an 11% increase in online sales, while comparable sales climbed 1.5%. Comparable sales at DXL stores jumped 13.8%.
On a comparable basis, sales at its retail divisions increased 2.5% while the US direct business saw sales slip 3% on a 33% decline in catalogue sales.
"While overall third quarter results did not meet our expectations, Destination XL retail stores and direct sales through DestinationXL.com performed well with excellent comps," said president and CEO David Levin.
"Our lower year-over-year revenues and the resulting earnings decline were due to the mild fall weather that affected sales of seasonal apparel and lower sales from the direct channel as we transition our catalogue customers to our e-commerce platform."
Looking forward, Levin added: "We believe that the increased focus on digital marketing will offset the top-line weakness in the long term and our direct operating margins will improve as a result of the reduced catalogue circulation."
The company now expects full-year diluted earnings per share to range from $0.17-$0.20, compared to previous guidance of between $0.22 and $0.25.
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