Duluth Holdings Inc. (NASDAQ:DLTH) Q4 2018 Earnings Conference Call - Final Transcript

Apr 04, 2019 • 04:30 pm ET


Duluth Holdings Inc. (NASDAQ:DLTH) Q4 2018 Earnings Conference Call - Final Transcript


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Good afternoon, and welcome to the Duluth Holdings Incorporated Fourth Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Donni Case, Investor Relations for Duluth Holdings. Please go ahead.

Donni Case

Thank you, Gary, and welcome to today's call to discuss Duluth Trading fourth quarter and fiscal 2018 financial results. Our earnings release, which we issued this afternoon is available on our Investor Relations website at ir.duluthtrading.com under Press Releases. I'm here today with Stephanie Pugliese, Chief Executive Officer; and Dave Loretta, Chief Financial Officer. On today's call management will provide prepared remarks and then we will open the call to your questions.

Before we begin, I would like to remind you that the comments on today's call, which include forward-looking statements can be identified by the use of words such as estimate, anticipate, expect, and similar phrases. Forward-looking statements by their nature involve estimates, projections, goals, forecasts and assumptions, and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

Such risks and uncertainties include, but are not limited to, those that are described in our most recent Annual Report on Form 10-K and other SEC filings as applicable. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events.

With that I'd like to turn the call over to Stephanie. Stephanie?

Stephanie L. Pugliese

Thank you and welcome everyone to our fourth quarter and year-end call for fiscal 2018. This past year was one of significant growth and accomplishment for the Duluth business. Our goals this year were to achieve strong revenue growth, strengthen our omnichannel presence, implement key infrastructure improvements and reach more customers than we ever have before.

We achieved these objectives and some highlights for the year include revenue growth of almost $100 million over 2017; a 50% expansion of our store base, ending the year with 46 stores, including three locations in Texas, one of our top three states; market share growth in both new and established store market; the power of the omnichannel model continues to prove out as evidenced by established store markets consistently achieving direct growth rates at more than doubled the non-store market rates; continued double-digit growth in our active customer base along with an improvement in key metrics such as the percent of customer shopping across categories and average annual spend per customer; implementation of a large-scale infrastructure improvements, including a new order management system, inventory planning system and e-commerce platform, and upgrade to our distribution center in Belleville, Wisconsin. And finally, the launch of customer-facing omni programs such as Buy-Online-Pickup-In-Store or BOPIS, ship-from-store and e-gift cards.

While executing all these important initiatives puts us in a stronger competitive position for the future, our fourth quarter, which is the lion's share of our revenues and profitability, fell