Duluth (DLTH) investor relations material

Executive summary

• Achieved third consecutive quarter of improved gross margin, lower costs, reduced inventory, and enhanced profitability.

• Adjusted EBITDA for the year rose by $10.3 million to $24.9 million, with positive free cash flow of $16.6 million, a $41.8 million improvement year-over-year.

• Full-year net loss narrowed to $16.2 million from $43.6 million in the previous year.

• Fourth quarter net income reached $7.8 million, reversing a $5.6 million loss from the prior year.

• Inventory reduced by $35 million (21%) versus last year, supporting improved liquidity and operational efficiency.

Financial highlights

• Q4 net sales were $215.9 million, down 10.5% year-over-year (8.3% excluding prior year's 53rd week).

• Full-year net sales were $565.2 million, down 9.8%; gross margin expanded by 420 basis points to 53.4%.

• Q4 gross margin expanded by 890 basis points to 53%.

• Adjusted EBITDA for the year was $24.9 million, up $10.3 million; adjusted EBITDA margin rose to 4.4% from 2.3%.

• Ended year with $141.3 million in net liquidity and no debt on the ABL facility.

Outlook and guidance

• FY2026 net sales projected at $540–$560 million, down 1%–5% year-over-year.

• Adjusted EBITDA guidance of $26–$30 million for FY2026.

• Capital expenditures planned at $12 million, focused on growth, infrastructure, and maintenance.

• First half of 2026 expected to see sales decline of 6%–10%, stabilizing to -2% to +2% in the second half.

• Gross margin expected to expand by 100 basis points to 54.4%.