Destination XL Group reported operating results for the third quarter of fiscal 2015. Total sales rose 6.4% to $99.6 million from $93.6 million in Q3 2014.
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The increase of $6 million in total sales was primarily driven by our comparable DXL stores, which increased $3.5 million for the third quarter. On a comparable basis, total transactions in the company's DXL stores were up 5.8% over the prior-year third quarter.
For the third quarter of fiscal 2015, gross margin, inclusive of occupancy costs, was 45%, compared with gross margin of 43.3% for the third quarter of fiscal 2014.
The increase of 170 basis points was the result of a 50-basis-point improvement in occupancy costs as a percentage of total sales, due to sales leverage, and a 120-basis-point improvement in merchandise margin, primarily due to lower markdowns as a result of the company's higher penetration into sales of full-price merchandise.
SG&A expenses for the third quarter of fiscal 2015 were 42.6% of sales, compared with 42.8% in the third quarter of fiscal 2014. On a dollar basis, SG&A expense increased $2.4 million from the same quarter a year ago.
The results for the third quarter of fiscal 2015 include DXL transition costs of approximately $1.4 million, compared with $1.1 million for the third quarter of the prior year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, a non-GAAP measure, for the third quarter of fiscal 2015 were $2.5 million, compared with $0.5 million for the third quarter of fiscal 2014. The improvement was primarily driven by an increase in sales from the same quarter of the prior year.
Net loss for the third quarter of fiscal 2015 was $(5.5) million, or $(0.11) per diluted share, compared with a net loss of $(6.3) million, or $(0.13) per diluted share, for the third quarter of fiscal 2014. On a non-GAAP basis, assuming a normalized tax rate of 40%, adjusted net loss for the third quarter of fiscal 2015 was $(0.07) per diluted share as compared with $(0.08) per diluted share for the third quarter of fiscal 2014.
Cash flow used for operations for the first nine months of fiscal 2015 was $(5.1) million, compared with cash flow used for operations of $(15.4) million in the same period of fiscal 2014. After capital expenditures, free cash flow, a non-GAAP measure, for the first nine months of fiscal 2015 improved by $15.8 million to $(30.4) million from $(46.2) million for the same period of fiscal 2014.
Capital expenditures for the first nine months of fiscal 2015 were $25.4 million, compared with $30.8 million for the same period of the prior year. All capital expenditures are subject to ROIC (Return on Invested Capital) hurdles. ■