Duluth Holdings Inc. (NASDAQ:DLTH) Q2 2020 Earnings Conference Call - Final Transcript

Sep 03, 2020 • 09:30 am ET


Duluth Holdings Inc. (NASDAQ:DLTH) Q2 2020 Earnings Conference Call - Final Transcript


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Good morning. And welcome to the Duluth Holdings Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [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. And welcome to today's call to discuss Duluth Trading's second quarter financial results. Our earnings release, which we issued this morning, is available on our Investor Relations website at ir.duluthtrading.com under Press Releases.

I am here today with Steve Schlecht, 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 will include forward-looking statements, which 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.

And with that, I'd like to turn the call over to Steve Schlecht, Chief Executive Officer of Duluth Trading. Steve, go ahead.

Steve Schlecht

Good morning, everyone, and thank you for joining today's call. I am pleased to report that net sales for the second quarter grew 13% to $137 million, driven by a 67% growth in direct sales year-over-year. In the quarter, we also saw a meaningful improvement in earnings and cash flow. Of course, we are far from taking a victory lap in the COVID environment. Yet I can clearly see the Duluth trading story playing out according to our long-term strategy.

Our company was built on three brand pillars, solution-based design, humorous and distinctive marketing, and outstanding and engaging customer experience that continue to set us apart regardless of the competitive landscape.

I'm very proud how our agility, brand strength and business model are serving as well during these unconventional times. The solid results we reported this quarter reflect our unwavering commitment to our customers.

First, we -- our heads down focus on creative -- on creating innovative and solution-based apparel and goods that consumer's value, when comfort was key, our spring and summer product assortments and widespread appeal to both men and women.

The men's business was especially strong this quarter. It was a 15% over last year and our drive to deliver the newness factor to customers, such as the launch of a men's swimwear line accounted for close to 18%