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Duluth Holdings Inc. (DLTH)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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16.63+0.98 (+6.26%)
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  • L
    LiquidVrCash
    Change in leadership always scares me.
    Neutral
  • R
    Robert
    The Street is looking for a profit drop on a sales increase. If this happens 12 will be the result. A small beat could get a bump to 17, If they can hold it will largely depend on the Dream Weaver conference call. I held a huge position last year and really did not completely go out until early fall. Made a boat load by buying every dip down to 3. I think I had enough insight to this business as it was more a less a miniature version of a couple business models that I had managed in another life. Now when I look at it I am wondering how they make this company a growth entity that can command parity valuations with competition that is best in class. I do root for the under dog. I wish them the best. Without a beat here and a first class Dream Weaver Conference call it may #$%$ the turnaround cycle by 6 months. I do understand that many think it has already turned around. I do believe the company did achieve survivorship status. Not much else though. I did see the first piece of innovation in marketing in their catalog that was aimed at the Ladies ' Market and the popular theme of Gardening. Looked very good . I hope they get a reward. The comps should be easier to achieve from here on out for the year. The question is are they ready ?
    Neutral
  • M
    Michael
    I like it in the $5-$7 range. I don't think it's worth a 20 to 30 pe ratio right now
  • e
    eddypgil
    Fewer new store openings means a strong quarter . Buy at $13
  • L
    LiquidVrCash
    Long term holder’s buying opportunity coming.
    Bullish
  • e
    eddypgil
    Lots of clothing retailers had great results this week. DLTH will too
  • R
    Robert
    I believe we have seen the bottom. The stock has bounced off the 200 day moving average with earnings on the horizon in the next three weeks. Today the 3 day moving average crossed over the 8 day moving average . Both of these data points are prudent stock price reversal points. If earnings meet expectations I see a very fast trip to $15. If earnings surprise I see a quick trip to 20 area depending on the size of the beat. The company is continuing their new store growth plan. If sales at the comp level actually show a 5% or better the 15 level will accelerate going into Christmas selling. It is positive that Schlect went back to work. I am still not a big fan of their new store growth strategy but they have not disclosed nor have the sleepy analysts that cover the company asked good questions about the comps based on their individual comps. I made 25% on this stock when they looked like they had a good story but I sold a tad early because I did not like the lack of expense control . I missed some up but missed a big drop. Now that the past CEO has left the company I suspect that the tables will turn and there is no better time to buy than now prior to earnings. Why ? Timing indicators are excellent and candle pattern indicates a breakout potential at 10.
    I will share a personal trading secret and that is on a breakout the 3 day SMA crosses the 8 day and if it follows through Monday it is a bright green indicator. I checked the options and they do tend to have some predictive indication when a stock like this has low volume and all of a sudden you see some unusual option action it says something about expected positive change. Do your own due diligence but I am beginning to like what I see here. Took a stick my toe in the water position today but will follow closely
    Bullish
  • s
    scott
    The tide has turned. We should trend higher for the next few months until next earnings which will confirm the recent quarterly results showing improvement across the board. Happy to see the reduced rate of store openings which will reduce capex and allow performance to catch up with the investment in store openings for the last few years. If the next quarter does confirm the return to higher profitability, we will immediately return to the $20-$25 range and continue to trend back to $30 where the stock belongs. Growth in the brand name should continue as long as management continues to develop the merchandise to capture a broader audience while maintaining the focus of functionality. Solid investment at this point. My calls worked out well. Depending on the share price going into earnings this quarter, we might do that again. Stay strong and long. The shorts do not give up a fight that easily. They dampened the last rally. We will see them reducing in this quarter.
  • e
    eddypgil
    $20 by April
  • e
    eddypgil
    Institutions under invested. If company surprises look for huge jump in price
  • G
    GMAN
    No guidance spooks investors, decision to slow ramp of new stores is good. 40pct increase in online sales saved them. EPS is ok. All in all, pretty strong performance, the mistakes they made were too many brick and mortar opened, which is weighing on them now. Stock should recover 3 to 5 pct back within a week, nut this is definately reset in PPS.
  • R
    Robert
    I attended the conference call this morning and it was very informative and while there is some uncertainty due the Corona Virus I was assured from my perspective that our company is in good hands and has the ability to drive through this challenging and uncharted territory.

    I am impressed enough with the results for the fourth quarter against the forecast. The soft spot is the same for this company as many others due to The Corona Virus scare. They do have a good on line presence that allows them to serve their customers on line. Currently their sales are 50% in the stores and 50% on line. This should provide some needed cash flow . The operating cash flow along with their bank line capacity should be adequate to steer the enterprise through the first half. It is unknown how long we will suffer overhang from the virus but most have a soft expectation and strong hope that fall sales should be sustainable. Currently while store traffic is than robust they have had to close only 8 stores so far. More could come but they have an advantage that many of their stores are in secondary and tertiary markets and may be able to provide an additional layer of cash flow to aid the cause. They are cutting their new store count from ten to five which will help the business environment.

    Balance sheet is strong enough combined with their current banking capacity to claw their way through this. The management both Steve and David seem to have a clear eyed point of view and understanding of this Black Swan event. If they stay disciplined and the Corona Virus tends to follow the early curves appearance they should not only survive but by maintaining these disciplines more tightly control expenses going forward.

    I love the solemn but positive attitude they both displayed. This may be a good place to bet on a turnaround as there is a limited downside for an aggressive investor as it is cheaper than a long term option would be and there is not a stated expiration date.

    The only negative that needs attention and it sounded to me that is already addressed is inventory.
    The management had to bring inventory in for fall early to avoid the Tariffs and Spring in early.
    The good news there is not a pending markdown bath due to the year around wearable for all but winter product. This may slow down turn for the rest of this year but that is a justified and responsible action as opposed to an all out giveaway. This is not high fashion merchandise and for the most part is stable year-round wear.

    There are a couple of operating enhancements worth mentioning. One is that they are working hard to become a strong omni channel retailer with a seamless experience for the customer and their transactions both sales and returns. Buy it where you want it and if you need an exchange or return do it where it is most convenient. The company can ship a direct order from a near by store as well. Very convenient for the customer and benefits the company .

    I have owned this company in the past and sold out sometime ago very profitably. I was concerned about their ability to run a multi store chain and direct customer experience profitably.

    I started buying earlier this year and trading some options around a core position. I have added to this core and now have a good sized block and find myself in an unusual position for me as a trend following swing player.
    I knew I should have sold out and taken a small loss. I decided in stead to build a position based on my belief that the company would prosper in the future. I actually see nothing that should have prevented that from happening by 2020 yearend EX- Corona. I still believe with skillful management and this team will be challenged but I believe it will take at least two to three quarters to get back on track. I will no doubt be purchasing a large block as they display their ability to come out the other side.

    I wish the entire Duluth Team all the best and hope this hard headwind eventually becomes a tailwind. My warning is to be smart but once you have the map and timing be relentless.

    I wish felloe shareholders good luck as well. I believe with some patience you can still handsomely profit. I would further suggest roadshows as you come out the other end. The best medicine for shareholder approval is good communication along with promised results being delivered. I have no financial results in mind at this point. All the same I do expect a better operation as you come through and I believe you do as well.

    GLTA
    Bob
  • J
    John
    Fiscal 2019 Outlook

    The Company reaffirmed its fiscal 2019 outlook as follows:

    Net sales in the range of $610.0 million to $620.0 million
    Adjusted EBITDA1 in the range of $51.0 million to $55.0 million
    EPS in the range of $0.60 to $0.66 per diluted share
    Capital expenditures of approximately $38.0 million2
    15 new store openings, adding approximately 215,000 of additional gross square footage
    Bullish
  • s
    scott
    This board is so quiet. If you are a long, recommend this post. At least we will know how many of us will be celebrating when we start moving North.
  • R
    Robert
    Well it is clear that the secret of the turnaround at DLTH is still closely held. ( LOL !! ) Hedgies either hate it on the short side or have not read the tea leaves based on the last quarter surprise results. I believe if they can drive better results in the next quarter and I fiercely do believe they will . The shorts will cover and began to reacquaint themselves to once again not getting out in time to maximize profits. Hedge Funds continue to be the worst place for your money and it has been proven complete with the 1 million charity bet against hedge Funds against the S&P 500 index. Even when one or two make a good return, virtually zero make it on a 5 year let alone 10 year return. So why do they play ? They get 20% of any profit they generate and a 2% of total invested. Some are getting squeezed down a bit these days due to no load ETF and zero commission . Index low cost funds have killed them except for a few patrons and I do say patrons rather than clients who quit thinking about risk reward analysis. I had a Hedge Fund associate the other day explain that a 40% risk is no risk at all. Not so much for him but his client er patron could feel different when the risk goes south which it most frequently does. Anyway , I digress . The usefulness of the tool for the long siders will come through this year. The main reason is the Founder returns as the CEO and not only was the company run better under his watch than the CEO who spent too much money on opening stores too fast she was confused that the growth of women's" clothing was so important to the business that she became less innovative both in assortment, marketing and staying fresh in men's rugged wear. This will return and cash flow and comp revenue growth will begin to grow faster as a new store does in fact grow very fast in the first two -three years of operation. Even the great Target and Walmart have slower comp growths in their older stacks. The aggressive and profit damaging investment of the past should and I believe will grip the sales and profit picture in a positive momentum drive as new store growth can moderate . A stronger focus on their e-commerce business is where the largest growth potential remains. Any reasonable Marketing Executive should grow this business a minimum of 4x over the store growth. I believe they will succeed with improved focus on cost and a compelling marketing communication program. The concept is a good one and most of the products are innovative enough to drive interest and I can say that I believe their men's apparel is very good quality and when promoted an outstanding value. Their everyday value is OK but he promoted pricing makes them a leader in this segment and the strength is at Duluth you do not need to go to 3 other stores to find a compelling reason to buy. I like their underwear but I believe it is over promoted and they have other products that would find a benefit as well . I would redeploy 80% of the marketing dollars from women's tops to other products and offerings. I look for a short term level of $12-13 and by year end 2020 low to mid 20's area. Could be higher if they really focused on the business. EBITDA is the key Metric management needs to focus on to get the stock moving again.
    Bullish
  • R
    Robert
    Getting very cheap for an omni retailer with sales per share over $20
  • R
    Robert
    The early adapters for the turnaround are and have been on board for awhile now. The second stage booster investor is starting to find their way here. These investors are not risk adverse once the trendline is in place signaling a turnaround model is in place and is working. Over the next two quarters I expect we will see 20+ share price . It starts with the 12 handle and moves to the 13 handle. The progress is still being judged by buyers as it moves into the 14 and 15 range, The economy starts to pick up another quarterly favorable report starts the faster acceleration towards 20. The report for the following quarter shows increasing momentum volume and demand picks up as 20 is met and begins the mid 20 trip. That is how I mapped my turnaround calendar to get here. And we will move forward as if sprung forward around the 20 level. The stock is only trading at 12 times forward PE currently. Another beat it will be less but the stock will have earned a higher multiple and it is not too late to get on board. A price of 20 is a 53% gain from today's level. This is very possible Before the end of the first quarter of 2021. This is not a pump. I have already made over 33% because I bought dips and options both sold puts and bought calls and 12,000 shares . I may take a partial off the table but I am in until I see a minimum of 25. Then I will evaluate.
    Here is why I still like the investment :
    Bullish
  • R
    Robert
    I just read the conference call notes and other than The Stifel and Blair analysts there was not much in the way of insightful questions. I did see some fresh down grades which in my opinion are appropriate. If you look at the direction, focus and current business metrics I would not buy. I went into the conference call notes I was thinking a strong buy opportunity. Now I would not touch it with your money let alone yours. The major elephant in the room is store productivity and comparative sales per retail location. I get omni /multi channel strategies very well. There is a stench in the room when you grow the store base by 50% and all the growth appears to be coming from catalog ,on line and TV promotion.If you can not get a high single digit sales increase on a stack of stores over the last 2 years more work needs to be done. Buy on line and pick up in stores is fine but not a reason to open more stores at high investment.In true multi channel management strategies that work each segment adds some positive incremental synergy or you do not have an effective strategy that ensures a long term 15% ROI which I submit you must have to have an investable concept. There are many positives and I did invest in the past but sold as the stock in my opinion got ahead of its' self.I am doing a more in depth study and I will post some further analysis. I like the product and I like the branding. I am suspicious that the new store growth plan is weak and not returning a strong ROI and very costly . One of the most successful growth retailers has grown without long term debt by limiting openings to 20% of the base every year, Good comps are evident as they are not practicing a rush to over populate their store mix to secondary and tertiary markets, Market size and the sic codes by market should be studied to develop a template the better ensures success.As an example there are many more Plumbers, Construction, Mechanics , Civil Engineers etc.And there are many more retail customers who enjoy rugged casual and outdoor wear. This would generate more on line and direct as well, A mix of small ,mid and larger markets would be advisable in my opinion. I am a customer who likes their products. I believe the value is lacking in some cases but the wear is sufficient to ensure that I do not need to purchase anything now or into the future as I have already loaded up. So my value as a long term customer diminishes quicker than as if it were a broader concept. I am not suggesting a broader concept but one that is tightly focused as now but serving a larger population. I live in a larger market but I know there is a store in Andover. Ohio and I will visit it before investing again. I tend to take positions that I can add to building a good size investment where a 20% gain generates a large dollar return. I did this my first time in but protected my profits and sold out. I admit I was drawn here on a value play with a short term pop to ensure confidence. My first glimpse is not so encouraging. I believe some of the analyst are afraid to ask tough questions to a female CEO but I believe it will make them stronger, That is all for now more in late April.
  • D
    Derek
    Way to go DLTH. Pay this guy 500k + to leave this company in the tiolet. Mind boogling.

    On April 27, 2020, Allen L. Dittrich, Senior Vice President and Chief Merchandising and Marketing Officer of Duluth Holdings Inc. (the “Company”), notified the Company of his intent to retire after over five years of service to the Company, which was preceded by his service on the Company’s advisory board of directors in 2014. Mr. Dittrich’s retirement will be effective May 7, 2020 (the “Retirement Date”). In connection with his planned retirement, the Company and Mr. Dittrich have entered into a letter agreement, pursuant to which Mr. Dittrich will receive nine months of base salary continuation at the annual rate of $350,000 following the Retirement Date and 24,010 shares of Mr. Dittrich’s unvested Class B Common stock of the Company that are scheduled to vest after the Retirement Date will vest immediately upon the Retirement Date.
  • R
    Robert
    I read the Conference Call Transcripts. I am impressed and I was pleasantly surprised that the management team has been quick off the ball after the March 23 market low . The sales are very good considering the year over year growth on two counts . Direct sales are outstanding on a year over year basis and couple that with new customer sales growth this is shaping up to beginning to look like a real turnaround. The remaining challenge comes as all stores are open. If a comp sales gain generates on the store basis this stock is going to pump in my opinion. I have increased my price target over the next 12 months to $25 .I was impressed as a side note with the detailed answers to the Analysts questions . I would not be surprised to see some upgrades if the next quarter is positive. Stock is up over 100% from the low. The next 100% should take less time imo. If the numbers come in the company will go on sale at a premium price. If not it becomes a very good acquisition target. Some core value has been put on display here.