Duluth Trading Raises Fiscal 2026 Adjusted EBITDA Guidance Amid Improved Profitability
Duluth Holdings Inc. (NASDAQ:DLTH) reported a significant increase in second-quarter net income and adjusted EBITDA, despite a decline in sales. The company attributed the improved profitability to higher gross margins driven by reduced promotions and lower product costs from direct sourcing. Net income rose sharply to $18.4 million compared to $1.3 million in the prior year, with Adjusted EBITDA more than doubling to $27.0 million. The firm raised its fiscal 2026 adjusted EBITDA guidance to a range of $38 million-$42 million from previously projected $28 million-$32 million while maintaining full-year revenue expectations between $540 million and $560 million. The improved performance was partially supported by one-time tariff refunds, but underlying gross margins also expanded significantly. Investors are closely watching whether the company can sustain these margin improvements without relying on non-recurring benefits like tariff refunds. While sales declined due to lower customer traffic and reduced promotional activity, inventory levels dropped 15.5%, potentially reducing future discounting needs.
Tickers: $DLTH
Topics: adjusted EBITDA guidance raise profitability improvement