Duluth Holdings Reports Q2 Earnings with Improved Profitability and Inventory Reduction
Duluth Holdings (DLTH) reported second-quarter earnings for fiscal year 2026, showing a net sales decline of 7.8% to $121.4 million due in part to the completion of its promotional reset strategy from earlier years. Despite this drop, profitability improved significantly with net income rising by $17.1 million to $18.4 million and adjusted EBITDA increasing to $27.0 million compared to $12.0 million a year ago. The company attributed much of its margin improvement—particularly the 1,810 basis point expansion in gross margin—to tariff refunds totaling $16.3 million. Excluding these one-time benefits, adjusted gross margin still expanded by 490 basis points due to reduced promotional activity and higher average unit retail prices. Inventory levels dropped 15.5% year-over-year as the company focused on a hero core product strategy and SKU rationalization. Duluth Holdings raised its full-year EBITDA guidance from $28 million–$32 million to $38 million–$42 million, citing improved profitability and working capital discipline.
Tickers: $DLTH
Topics: adjusted EBITDA gross margin inventory management net sales