Destination XL Group Posts Q2 Loss; Cuts FY Outlook - Quick Facts

(RTTNews) - Destination XL Group Inc. (DXLG) said that net loss for the second quarter of fiscal 2013 was $1.6 million, or $0.03 per share, compared with net income of $1.2 million, or $0.03 per share, for the second quarter of fiscal 2012.

The results for the second quarter of fiscal 2013 include Destination XL or DXL transition costs of approximately $3.1 million, which includes $1.3 million of pre-opening occupancy costs and lease exit costs, $1.3 million of SG&A expenses related to pre-opening payroll, training, store operation and test marketing and $0.5 million related to trademark amortization. In addition, marketing costs increased $4.1 million related to the Company's national marketing campaign, for a total of approximately $7.2 million, or $0.09 per diluted share.

Loss from continuing operations for the second quarter of fiscal 2013 was $1.6 million, or $0.03 per share, compared with income from continuing operations of $3.0 million, or $0.06 per share, for the second quarter of fiscal 2012. Analysts polled by Thomson Reuters expected the company to report breakeven per share for the second-quarter. Analysts' estimates typically exclude special items. The loss for the latest-quarter was primarily attributable to the $0.09 per share in DXL transition and marketing costs included in the second quarter of fiscal 2013.

Total sales for the quarter declined to $97.6 million from $100.5 million in the second quarter of fiscal 2012. Two analysts had consensus revenue estimate of $103.60 million for the quarter. The year-over-year decrease in sales was partially offset by an increase in comparable sales for the second quarter of fiscal 2013 of 3.8%, consisting of a 6.9% increase from the retail stores and a 9.8% decrease in the direct business.

The increase in the retail stores was primarily driven by the 65 DXL stores that had a comparable increase of 28.8%, which represented approximately 26% of the Company's comparable retail store sales. Comparable sales for the 29 DXL stores that have been open for more than one year increased 16.5%. Offsetting the overall sales impact of the increase in DXL store comparable sales was an approximate $4.8 million reduction in overall sales from Casual Male XL and Rochester Clothing stores closed since the last year which have not been replaced with a DXL store.

The company said it now believes that it will open between 55 to 58 DXL stores in fiscal 2013, lower than its original plan of 57 to 64 DXL stores due to changes in its projected store opening dates. As a result of that factor, and the weaker-than-expected direct business performance, the company revised its guidance for the full fiscal year.

For fiscal 2013, the company now expects loss per share in the range of $0.03 to $0.05, as a result of the lower sales volume. Previously, the company expected approximately breakeven per share for fiscal year.

The company now expects comparable sales increase of 6% to 7% and total sales of $395.0 million to $400.0 million for fiscal year. Earlier, the company anticipated Comparable sales increase of 8.5% to 10.0% and total sales of $415.0 million to $420.0 million for fiscal year.

Street currently is looking for full-year 2013 earnings of $0.01 per share on annual revenues of $415.55 million.