Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Q3 2023 Earnings Presentation
22 slides from Duluth's earnings presentation, Nov 30, 2023
Slide 1: Investor Presentation Third Quarter 2023
Investor Investor Presentation Presentation Third Third Quarter Quarter 2023 2023 November November 30, 30, 2023 2023
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements This presentation dated November 30, 2023 includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts included in this presentation, including stateme
Slide 3: Introduction to Duluth Trading Co.
INTRODUCTION TO DULUTH TRADING CO.
Slide 4: Our Greater Purpose and Mission Statement
OUR GREATER PURPOSE “Celebrating the can-do spirit by enabling anyone who takes on life with their own two hands.” OUR MISSION STATEMENT “We build high-quality, solution-based products for work, play and every day. We craft our raw materials – unique brands, durable products, standout customer servi
Slide 5: Secret Sauce
Secret Sauce Better Brands A brood of sub-brands all bonded by the belief that you can accomplish anything that you put your own mind and own two hands to Better Innovation Long, colorful history of product innovation and solution-based design Better Marketing Distinctive marketing made to break thr
Slide 6: Financial Review
FINANCIAL REVIEW
Slide 7: Three Months Ended October 29, 2023
Three Months Ended October 29, 2023 Summary ● Net sales of $138.2M compared to $147.1M in the prior year third quarter ● Women’s AKHG sub-brand net sales increase 19.0% compared to prior year third quarter ● Inventory composition healthy and well managed, down 15.0% compared to prior year third quar
Slide 8: Three Months Ended October 29, 2023
Three Months Ended October 29, 2023 (6.1)% $147.1 $138.2 $56 $51 (9.8)% $77 $2 $69 $91 $87 $(6) $(2) $(10) 2022 2023 2022 2023 2022 2023 2022 2023 (10/30/2022) (10/29/2023) (10/30/2022) (10/29/2023) (10/30/2022) (10/29/2023) (10/30/2022) (10/29/2023) Retail Direct Net Sales Gross Profit Adjusted EBI
Slide 9: Nine Months Ended October 29, 2023
Nine Months Ended October 29, 2023 (5.9)% $411.5 (2.5)% $401.1 $220 $158 $148 $207 (46.4)% $23 $(5) $254 $253 $12 $(16) 2022 2023 2022 2023 2022 2023 2022 2023 (10/30/2022) (10/29/2023) (10/30/2022) (10/29/2023) (10/30/2022) (10/29/2023) (10/30/2022) (10/29/2023) Retail Direct Net Sales Gross Profit
Slide 10: Strong Balance Sheet, Liquidity and FCF
Strong Balance Sheet, Liquidity and FCF Debt to Capital (1,2) Free Cash Flow ($ in millions) As of October 29, 2023 Nine Months Ended Cash $8.2 Debt: Line of Credit 36.0 Term Loan 0.0 Total Debt 36.0 Total Shareholders’ Equity $217.1 $(71.0) $(75.3) Total Capitalization $253.1 2022 2023 Debt to Capi
Slide 11: Fiscal 2023 Financial Guidance
Fiscal 2023 Financial Guidance ($ in millions) 2022 2023 Guidance Reconciliation to 2023 Forecasted Adj. EBITDA Fiscal Year Ended January 28, 2024 Net Sales $653.3 $640 to $655 -2.0% to 0.3% Forecasted ($ in millions) Low High Net Loss $(8.2) $(5.1) (+) Depreciation and amortization 32.7 32.7 Adj. $
Slide 12: Net Sales and Adjusted EBITDA
Net Sales and Adjusted EBITDA Net Sales Adjusted EBITDA1 ($ in millions) ($ in millions) 699 77 639 653 616 568 471 55 52 52 46 44 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 1 Adjusted to reflect the add-back of stock compensation expense. November 30, 2023 12
Slide 13: Investment Highlights
Investment Highlights ● Growing lifestyle platform of sub-brands with well-established digitally-led omnichannel business ● Multiple revenue growth opportunities led through five strategic pillars ● Strategic investments support long-term EBITDA margin expansion ● Strong balance sheet and ample liqu
Slide 14: Big Dam Blueprint
1b DAM BLUEPRINT
Slide 15: "Big Dam Blueprint" Growth Strategies
“Big Dam Blueprint” Growth Strategies 1 2 3 4 5 Increase/ Intensify Efforts to Evolve Our Multi- Lead With a Test & Learn to Accelerate Optimize Our Brand Platform as Digital-First Unlock Long-Term Investments to Owned DTC a New Pathway to Mindset Growth Potential Future Proof the Channels Grow the
Slide 16: Lead With a Digital-First Mindset
Lead With a Digital-First Mindset 1 2 3 4 5 ● Transform Duluth into a digitally-led organization integrating data and digital technology into all areas of our business, fundamentally changing how we operate and deliver value to customers ● Our digital transformation will provide the structure for ho
Slide 17: Intensify Efforts to Optimize Our Owned DTC Channels
Intensify Efforts to Optimize Our 1 2 3 4 5 Owned DTC Channels ● Increase our focus and investments in our direct channel as our primary growth vehicle ● Our customer places a high value on our stores and they will continue to serve as a critical piece of the omnichannel ecosystem: ○ Convenient touc
Slide 18: Evolve our Multi-brand Platform as a New Pathway to Grow the Business
Evolve our Multi-brand Platform as a 1 2 3 4 5 New Pathway to Grow the Business ● Ladder to the Greater Purpose: “Celebrating the can-do spirit by enabling anyone who takes on life with their own two hands.” ● Focus on features, benefits, durability, innovation and a strong value proposition ● Prior
Slide 19: Test & Learn to Unlock Long-term Growth Potential
Test & Learn to Unlock Long-term 1 2 3 4 5 Growth Potential ● Gain operational learnings to implement wholesale opportunities including logistics, systems and people needed to scale efficiently ● Gain direct-from-manufacturer operational learnings to offer unique and customized products based on cus
Slide 20: Increase and Accelerate Investments to Future Proof the Business
Increase and, in Some Areas, Accelerate 1 2 3 4 5 Investments to Future Proof the Business ● Analyze and identify investments that will allow us to scale more easily and effectively, as well as deliver on ever-evolving customer expectations: ○ Increased investments in automation across our logistics
Slide 21: Thank You
THANK YOU
Slide 22: Appendix: Reconciliation to Adjusted EBITDA and Free Cash Flow
Appendix Reconciliation to 2023 Adjusted EBITDA and Free Cash Flow Adjusted EBITDA Free Cash Flow 3 Months Ended 9 Months Ended 9 Months Ended October October October October October October ($ in millions) ($ in millions) 29, 2023 30, 2022 29, 2023 30, 2022 29, 2023 30, 2022 Net cash provided by op