Duluth Holdings reports declining sales and leadership shake-up ahead of 2025 transition
Duluth Holdings has reported a drop in net sales and widened losses for its latest quarter. The company also announced leadership changes, with CEO Sam Sato set to retire in April 2025. Despite challenges, cost-cutting measures have improved operational efficiency.
The company’s quarterly net sales fell by 1.8% to $241.3 million. Fulfillment delays and weaker retail traffic contributed to the decline. Gross margin also shrank by 410 basis points, largely due to an 8.9% drop in average unit retail prices.
Adjusted EBITDA for the quarter stood at $8.5 million, while the full-year figure reached $14.6 million. However, adjusted earnings per share showed a loss of $0.04 for the quarter and $0.71 for the year.
Inventory levels rose sharply by 32% year over year, reaching $166.5 million. The increase was driven by higher stock of core products and shifts in sourcing strategy. Meanwhile, cost-reduction efforts, including fulfillment centre consolidation, generated significant annual savings and improved shipping efficiency.
Leadership changes are underway, with Sam Sato stepping down as CEO and board member on April 25, 2025. Stephen Schlecht will take over day-to-day operations from March 14, 2025. By May 2025, Stephanie Pugliese was named the new CEO, a role confirmed in the Q3 2025 earnings call.
Looking ahead, management forecasted fiscal 2025 net sales between $570 million and $595 million. Adjusted EBITDA is expected to range from $20 million to $25 million.
Duluth Holdings faces a period of transition with new leadership and ongoing cost-saving measures. The company’s guidance for 2025 suggests a focus on stabilising sales and profitability. Operational improvements and inventory adjustments remain key priorities for the coming year.
