Destination XL Group reported operating results for the third quarter of fiscal 2016.
Article continues below
For the third quarter of fiscal 2016, total sales rose 2.3% to $101.9 million from $99.6 million in the third quarter of fiscal 2015.
The increase of $2.3 million in total sales was primarily driven by a comparable sales increase of $1.1 million, or 2.3%, from the Company's DXL stores. On a comparable basis, total transactions in the Company's DXL stores were up 1.8% over the prior-year's third quarter.
Sales per square foot for the DXL retail stores, on a rolling 12-month basis, increased to $182 from $174 for the prior-year quarter.
For the third quarter of fiscal 2016, gross margin, inclusive of occupancy costs, was 44.4%, compared with gross margin of 45.0% for the third quarter of fiscal 2015.
The decrease of 60 basis points was the result of a 30-basis-point decrease in merchandise margin and a 30-basis-point increase in occupancy costs as a percentage of total sales. The decrease in merchandise margin was primarily due to a shift in the timing of clearance markdowns.
The increase in occupancy costs was due to occupancy expense increasing at a greater percentage than sales.
On a dollar basis, occupancy costs for the third quarter increased approximately 4.0% over the prior-year's third quarter, primarily as a result of an increase in total square footage.
SG&A expenses for the third quarter of fiscal 2016 were 40.6% of sales, compared with 42.6% in the third quarter of fiscal 2015.
On a dollar basis, SG&A expense declined $1.0 million from the same quarter of the prior year, primarily due to decreases in advertising costs and incentive accruals, which were partially offset by increased store payroll and medical benefits costs.
Net loss for the third quarter of fiscal 2016 was $(4.5) million, or $(0.09) per diluted share, compared with a net loss of $(5.5) million, or $(0.11) per diluted share, for the third quarter of fiscal 2015.
On a non-GAAP basis, assuming a normalized tax rate of 40%, adjusted net loss for the third quarter of fiscal 2016 and fiscal 2015 was $(0.05) and $(0.07) per diluted share, respectively.
Earnings before interest, taxes, depreciation and amortization (EBITDA), a non-GAAP measure, for the third quarter of fiscal 2016 were $3.9 million, compared with $2.5 million for the third quarter of fiscal 2015.
The improvement was driven by an increase in sales from the same quarter of the prior year and a decrease in SG&A expenses. ■