Destination XL Group Inc. continued to see progress in the conversion to its DXL superstore format, helping it to cut its first-quarter loss, and raise its quarterly revenues more than expected.
Shares of the Canton, Mass.-based big and tall retailer rose 7.1 percent to $4.85 in trading Friday.
In the three months ended May 2, the company narrowed its loss to $574,000, or 1 cent a diluted share, versus a loss of $3.5 million, or 7 cents, in the first quarter of 2014.
Sales were up 8 percent, to $104.4 million from $96.7 million, with total comparable sales up 5.5 percent and comps at the 104 expanded-format DXL stores open at least 13 months up 8.7 percent. Excluding outlets, DXL currently accounts for 149 of the company’s units. At the end of 2013, those stores numbers 99 out of a total unit count of 359.
The consensus estimate among analysts was for a loss of 4 cents a share and revenues of $103 million.
David Levin, president and chief executive officer of the company, noted that it had outperformed its quarterly sales plan “despite the severe winter weather and difficult economic climate.” It has its heaviest concentration of stores in the Northeast.
Levin said the spring advertising campaign launched on ESPN and running through Father’s Day “represents the start of our third year with a national advertising presence on television, radio and digital media. The campaign continues to fuel the growth in our customer database, which leads to more DXL customer visits.”
He also hinted that the company was getting closer to moving into the international arena and was in discussions with a number of possible global franchise partners, with news possibly arriving in time for the company’s second-quarter conference call.
He took a moment on the company call with analysts to emphasize the scope of the firm’s strength in the big and tall market. “We have 357 stores among our three brands; the next largest competitor has four stores,” he said. “It’s a huge advantage for us. In online Web traffic, we now have a 58 percent traffic share and that has been growing steadily each month.”
Its assortment includes 22 brands for which it has exclusive distribution in the big and tall market.
While larger companies have abandoned efforts focused on big and tall, such as the Foundry operation discontinued by J.C. Penney Co. Inc., it’s “really the small, the independent mom and pops that slowly, over time, have closed their stores.
“When we can bring a DXL store into a market, it’s very difficult to compete with it,” he concluded.
Destination XL left its forecast for annual sales unchanged, at between $438 million and $443 million. Comps continue to be expected to rise 5.6 percent. The company, however, narrowed its expectations for a net loss to a range of between 20 and 23 cents from previous guidance of a loss of between 20 and 27 cents.