Duluth Trading Company reports 8.1% sales decline in Q3 2024 but improves gross margin

Duluth Trading Company reported a net sales decline of 8.1% for Q3 2024, impacted by warm weather and a competitive market. Despite this, the company saw growth in average order value and digital sales tactics. Inventory levels increased due to early product receipts and unsold seasonal items. The company is focusing on improving inventory management and operational efficiency. They completed the exit of a legacy fulfillment center, which is expected to save about $5 million annually. Duluth plans to open two new stores in 2025 and is enhancing its marketing strategy to drive traffic. Duluth's gross margin improved by 210 basis points, reaching 52.3%. However, the company anticipates a full-year gross margin reduction of about 125 basis points due to higher promotional activity. They reaffirmed their full-year sales guidance of $640 million and aim to end the year with strong liquidity.