Destination Xl Group, Inc. · NASDAQ:DXLG
Destination Xl — Investor Presentation (September 2014)
33 slides from Destination Xl's investor presentation, Sep 9, 2014
Slide 1: September 2014 Investor Presentation
September 2014 Investor Presentation Exhibit 99.1 Destination XL Group, Inc.
Slide 2: Forward Looking Statements and Non-GAAP Measures
FORWARD LOOKING STATEMENTS AND NON-GAAP MEASURES Forward Looking Statements: Certain information contained in this presentation, including, but not limited to, future store projections of sales per square foot, gross margin, occupancy and selling, general administrative expenses as well four-wall ca
Slide 3: Largest Men's B&T Specialty Retailer
LARGEST MEN’S B&T SPECIALTY RETAILER Total stores 80% - 85% Retail sales 15% - 20% Direct sales Private label brands Name brands Exclusive brands 40 million Addressable market 1.4 million Active customers 90% Enrolled in loyalty program
Slide 4: Unique Customer
UNIQUE CUSTOMER Not determined by demographic Males of all ages with a waist size 40” and greater Values convenience, comfort, selection and fit over price Desires a good, better, best array of product assortments in all primary lifestyles
Slide 5: Opportunity for Growth: Transforming Our Brand
Opportunity for Growth TRANSFORMING OUR BRAND Began transformation to DXL brand in 2010 to provide customers with a one-stop shopping destination and grow the business Capture greater wallet share Attract broader customer audience Target end-of-rack customers Leverage website to drive sales Waist si
Slide 6: One-Stop Shopping at Its Best
More brands Bright Atmosphere Wide aisles Highly Trained Staff Onsite tailoring Large changing rooms ONE-STOP SHOPPING AT ITS BEST
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Slide 10: Large Selection of Name Brands
LARGE SELECTION OF NAME BRANDS
Slide 11: Complete DXL Store Roll-out in 2017
Open ~40/year Close ~40/year 181 113 51 9 220 250 COMPLETE DXL STORE ROLL-OUT IN 2017 Majority of store openings are timed prior to the holiday shopping season to maximize profitability August 2, 2014 2017 Estimate DXL Stores Casual Male XL Retail CM Outlet Stores Rochester Clothing Additional Store
Slide 12: Square Footage Composition
1,700 – 2,000 1,003 643 SQUARE FOOTAGE COMPOSITION DXL Stores Casual Male XL Retail CM Outlet Stores Rochester Clothing Additional Stores DXL stores will account for the majority of square footage by end of fiscal Total square footage to increase 10% to 25% by end of fiscal 2017 August 2, 2014 2017
Slide 13: Improved Profitability at Maturity
DXL Year 1 DXL Year 2 DXL Year 3 DXL Year 4 DXL Year 5 Sales per square foot $150 $170 $190 $205 $220 Gross margin, net of occupancy costs 42.0% 44.0% 45.0% 46.0% 47.0% SG&A as a % of sales 26.0% 22.0% 21.0% 21.0% 20.0% Four-wall cash flow 16.0% 22.0% 24.0% 25.0% 27.0% Build out costs $75 IMPROVED P
Slide 14: DXL 5K Stores Drive Profitability
DXL 5K STORES DRIVE PROFITABILITY Introduced 5,000 square foot store concept in Q2 2014, which increased opportunity for continued store growth by ~50 more stores Lowers cap ex and occupancy costs by 25% as compared to a 7,000 sq. ft. store Penetrate smaller markets, where the economics of a full-si
Slide 15: Increasing Return on Investment
Per Square Foot Average Sq. Ft. Year One Sales Year One 4-Wall Cash Flow ROI 2010 – 2012 (48 stores) 9,590 $151 $22 30.0% 2013 (51 stores) 8,441 $145 $25 38.0% 2014 (40 stores) 7,428 $153 $26 42.0% INCREASING RETURN ON INVESTMENT Average store results ROI is defined as the internal rate of return ca
Slide 16: Successful DXL Marketing Campaigns
You’re Looking Good SUCCESSFUL DXL MARKETING CAMPAIGNS Since first flight launched (Q2 2014 vs. Q2 2013): +6.5% Traffic +13.1% Transactions +6.2% Retail Conversion +5.6% Web Conversion +7.6% End-of-Rack +11.0% Customer Count
Slide 17: Driving Traffic to DXL Stores
+65% +26% Experience Book & $50 Gift Card 35% Response Rate Free Polo Offer 22% Response Rate DRIVING TRAFFIC TO DXL STORES More customers in an average DXL store’s active database than at the average Casual Male XL store Higher retention rate at an average DXL store compared with an average Casual
Slide 18: Converting the Casual Male Customer
+24% CONVERTING THE CASUAL MALE CUSTOMER Begin promoting new DXL store at ambassador Casual Male XL stores 6 months prior to closing Extending leases at certain Casual Male XL locations Greater conversion rate of Casual Male XL customers in Spring 2014 than Spring 2013
Slide 19: Fall 2014 Marketing Campaign
FALL 2014 MARKETING CAMPAIGN Commence campaign two weeks later than prior year Will run from mid-October through mid-December Aligned with peak holiday selling season and targeting gift givers Greater quality of program for ad placement (NFL, ESPN, Prime Time) Increased media presence for Thanksgivi
Slide 20: Greater Presence in Metro Markets
GREATER PRESENCE IN METRO MARKETS Customers typically willing to drive up to 20 miles to shop at DXL Chicago metro market large enough for multiple full-sized and 5K DXL stores Prior to conversion, there were 19 Casual Male XL stores that serviced this market Full size DXL 5K DXL Future DXL
Slide 21: Impressive Double-Digit Comp Sales
5 quarters of double-digit comp sales increases IMPRESSIVE DOUBLE-DIGIT COMP SALES (11 stores) (16 stores) (23 stores) (29 stores) (36 stores) (48 stores) (52 stores) (61 stores) Spring marketing campaign ran from 5/5/13 to 6/14/13 Fall marketing campaign ran from 9/28/13 to 11/23/13 Spring marketin
Slide 22: Improving Direct Business
IMPROVING DIRECT BUSINESS Eliminated catalog circulation in May 2013 Improved website functionality Omnichannel retailer •Ship to store •Preferred delivery •Store inventory available online •Free shipping on orders above $100 •Mobile coming soon Increased digital display marketing Stronger promotion
Slide 23: Financial Performance
Destination XL Group, Inc. FINANCIAL PERFORMANCE Destination XL Group, Inc.
Slide 24: 2014 Sales Highlights
+5.8% +7.0% +11.3% +7.1% Q2 2014 SALES HIGHLIGHTS Total sales (Retail and Direct) Comparable sales (all stores) DXL comparable store sales Casual Male XL and Rochester Clothing stores
Slide 25: Sales and Gross Margins
45.9% 46.3% 46.5% 46.0% SALES AND GROSS MARGINS Strong gross margins provide opportunity for significant sales leverage $192.2 $195.8 $196.0 $192.0 $200.5 $392.0 $395.9 $399.7 $388.0 45.6% 2014 YTD ($MM) Sales Q1 & Q2 Total Annual Sales Gross Margin
Slide 26: EBITDA & EBITDA Margin
8.0% 7.9% 7.4% 2.0% EBITDA & EBITDA MARGIN EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin are non-GAAP measures. The above Adjusted EBITDA for fiscal 2011 excludes a trademark impairment charge of $23.1 million. For additional information about these non-GAAP measures, including a
Slide 27: Operating Margin & Comparable Sales
OPERATING MARGIN & COMPARABLE SALES Focus on improving operating margins through greater DXL sales (continuing operations) Total DXLG Comp Sales Total DXLG Operating Margin Before impairment charge of $23.1 million 4.6% 4.7% 3.5% (3.4)% (3.3)% 2014 YTD 1.5% 2.1% 1.5% 3.0% 5.2% 2014 YTD
Slide 28: Increasing SG&A with DXL Roll-out
37.9% 38.4% 39.1% 44.0% INCREASING SG&A WITH DXL ROLL-OUT $19.0 $19.6 $18.5 $27.8 $14.3 $148.4 $152.0 $156.4 $170.7 $86.8 43.3% 2014 YTD Marketing Expense Total SG&A SG&A as a Percentage of Sales ($MM)
Slide 29: Solid Balance Sheet
SOLID BALANCE SHEET Q2 Inventory $92.9 $104.2 $104.2 $105.6 $116.0 Net borrowings under revolver $0 $0 $0 $9.0 $25.7 Cash on hand $4.1 $10.4 $8.2 $4.5 $5.6 Fixed term loan $0 $0 $0 $16.7 $22.6 ($MM) Unused excess availability under credit facility at August 2, 2014 was $71.0 million
Slide 30: Cash Flow & Capital Expenditures
$9.0 $18.0 CASH FLOW & CAPITAL EXPENDITURES Before tenant allowances $18.7 $23.4 $29.9 $24.9 $(2.7) $32.4 $54.1 $18.9 2014 YTD ($MM) Cash Flow from Operating Activities CAPEX
Slide 31: DXLG Investment Highlights
DXLG INVESTMENT HIGHLIGHTS Transformation to DXL concept creates compelling investment opportunity Significant market share/sales growth opportunity Strong gross margins Ability to significantly improve operating margins Solid balance sheet with borrowing capacity
Slide 32: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION • In addition to Operating Income (Loss) determined in accordance with United States Generally Accepted Accounting Principles (GAAP), the Company uses certain non-GAAP financial measures, such as “EBITDA,” “Adjusted EBITDA,”EBITDA Margin” and “Adjusted EBITDA Margin” in asses
Slide 33: Investor Contact
INVESTOR CONTACT Jeffrey Unger V. P. Investor Relations jeffunger@usa.net 561-482-9715 (o) 561-543-9806 (c) www.DestinationXL.com
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