Duluth Holdings Reports Strong Q2 Profitability and Liquidity

Duluth Holdings Inc., the parent company of lifestyle brand Duluth Trading Company, reported robust financial results for the second quarter of 2026, highlighting improvements in profitability and liquidity.

For the quarter ending August 2, 2026, Duluth Trading achieved a net income of $18.4 million, up significantly from $1.3 million in the same period last year. This improvement was partially attributed to a $16.3 million in tariff refunds. The company’s adjusted earnings per share (EPS) stood at $0.50, reflecting a positive impact of $0.44 from the tariff refunds.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged to $27.0 million, compared to $12.0 million in the previous year. The gross margin expanded by an impressive 1,810 basis points to 72.8% of net sales, driven by a 15.5% reduction in inventory, which was down $22.9 million from the prior year.

President and CEO Stephanie Pugliese commented, "Our second quarter performance underscores the effective execution of our operational priorities and inventory management. We’ve seen a significant improvement in profitability, thanks to gross margin expansion and disciplined inventory practices. We remain committed to enhancing our product offering and advancing our 'Build to Last' strategy to continue delivering exceptional customer experiences."

Despite a 7.8% decrease in net sales to $121.4 million, the company saw a decline in web traffic and conversion rates, offset by higher average order values. Direct-to-consumer sales dropped by 11.5% to $70.1 million, while retail store sales decreased by 2.4% to $51.3 million. The company opened two new retail stores in the third quarter of 2025, which contributed to the overall sales mix.

The balance sheet showed a strong financial position, with cash and cash equivalents totaling $26.8 million and net liquidity of approximately $96 million, thanks to the company’s zero debt on the $70.0 million Asset Based Lending facility.

Looking ahead, the company reaffirmed its fiscal 2026 net sales guidance range of $540 million to $560 million and raised its Adjusted EBITDA guidance to $38 million to $42 million, up from the previous range of $28 million to $32 million, including the impact of tariff refunds. Capital expenditures are expected to remain at approximately $12 million, inclusive of software hosting implementation costs.

Pugliese added, "As we move into the second half of the year, we are excited about our upcoming product launches and the strategic steps we are taking to enhance our customer experience. Our focus remains on building a stronger, more resilient brand for our customers who value quality and authenticity."

For the upcoming fiscal year, the company is optimistic about maintaining its strong financial position and continuing to deliver value to shareholders.