Duluth Holdings Inc. (NASDAQ:DLTH) Q2 2019 Earnings Conference Call - Final Transcript

Sep 12, 2019 • 09:30 am ET

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Duluth Holdings Inc. (NASDAQ:DLTH) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Analyst
Jonathan Komp

up on that and asking a little bit different, but when you look at the SG&A ratio this year, 48% to 49% would be a high mark for the Company. Is there any sort of longer-term vision on where that could be and maybe just any broad stroke comments on the individual pieces where you could get some leverage over time, especially with less of a focus on the capital investment growth in the short term?

Executive
Dave Loretta

Jon, I guess, specifically on the SG&A rate, I mean, we know we've got the opportunity to leverage that and that's going to start to be realized this second half of the 2019. Getting our operating margins back to where they historically were in, high-single digit, low-double digit is still our objective. So, we think that's not coming at the expense of more capital. It's -- they go hand-in-hand.

Analyst
Jonathan Komp

Okay. Appreciate the perspective. Thank you.

Executive
Dave Loretta

Thanks.

Operator
Operator

[Operator Instructions] The next question will come from Dylan Carden with William Blair.

Analyst
Dylan Carden

Yeah. Hi. Thank you very much. I was wondering either Dave or Steve, if you could talk about some of the behind-the-scenes investments that you alluded to in your prepared remarks and just sort of how those flow throughout sort of the balance of the year and into 2020, and when benefits from those at least from an operating margin standpoint are expected to really take hold?

Executive
Stephen L. Schlecht

Yeah, Dylan, I guess what we've talked about from the investments in our infrastructure and logistics, I mean, those have been in place starting last year and the benefits that we're getting from those are materializing in our ability to leverage SG&A. So I think that's been clear as to how we've articulated where some of the capital spend has been. If there's a specific area within that, that you were curious about, I'm happy to go deeper with you.

Analyst
Dylan Carden

Yeah, I guess maybe then sort of store functionality. I know POS rolling out next year, but some of the inventory management tools that you've implemented, any kind of early signs as to how those are helping sort of drive efficiencies?

Executive
Stephen L. Schlecht

Sure. Well, we definitely have the opportunity within the inventory planning and flow of goods to improve that, where we're going to see in this back half of the year is a better inventory positioning from the planning standpoint and from an open to buy. So we expect that's going to be -- that's already materializing in a better handling, better throughput of the inventory, better logistics coming down from having inventory in the right locations and having the goods in the right place and having them in the stores more timely. And that comes from both, use of the tools, but also our planning approaches to that. So that's what's going to realize in the benefits.

Analyst
Dylan Carden

Great. And then, sort of I guess, coined [Phonetic] from that, any sort of guidance you can give around on the flow, or particular around men's new product into the