ation set the foundation to
enable extended growth into new channels,
brands and customer adjacencies."

Sato concluded, "Customers are responding
well to our Spring & Summer collections
featuring functional styles for outdoor work
and play for those that take on life with
their own two hands. Rooted in ruggedness,
our Duluth garden, landscaping and planting
assortment continues to build on its
multi-year success, expanding in both size
and breadth across apparel and gear for both
Men and
Women. The Women's Heirloom collection of garden shirts, overalls, aprons and
vests have been a cornerstone to this year's offering and have exceeded our
expectations setting the stage for many years of future growth for this anchor
category. Our Men's business experienced a significant improvement in trend from
the prior quarter with growth that was down slightly to last year. Supported by
the great momentum in garden, coupled with the AKHG Women's assortment, our
Women's business overall grew 14% in the first quarter fueling total company net
sales growth of 0.7%."

Operating Results for the First Quarter Ended April 30, 2023

Net sales increased 0.7% to $123.8 million, compared to $122.9 million in the same period a year ago. Direct-to-consumer net sales increased by 2.3% to $79.5 million driven by a higher conversion rate. Retail store net sales decreased by 2.1% to $44.3 million due to lower store traffic, which was partially offset by strong conversion rates.

Gross profit decreased to $65.7 million, or 53.0% of net sales, compared to $67.1 million, or 54.6% of net sales, in the corresponding prior year period. The decrease in gross profit margin rate was primarily due to a lower product margin rate, which was partially offset by expensing $3.9 million of expedited freight during the first quarter of 2022 compared to $0.1 million during the current quarter, impacting the quarter-over-quarter margin rate variance by 3.1%.

Selling, general and administrative expenses increased 3.2% to $70.2 million, compared to $68.0 million in the same period a year ago. As a percentage of net sales, selling, general and administrative expenses increased to 56.7%, compared to 55.3% in the corresponding prior year period.

The increase in selling, general and administrative expense was partially due to higher occupancy costs from the new automated Southeast fulfillment center, coupled with increased amortization of software hosting implementation costs from continued capital investments.

The effective tax rate related to controlling interest was 27% in the current period compared to 25% prior year period.



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Balance Sheet and Liquidity

The Company ended the quarter with a cash balance of $9.2 million, net working capital of $88.7 million, and no outstanding balance on the Duluth Trading $200 million revolving line of credit.

End of period inventory of $145.0 million represented a 4.8% decrease compared to prior period first quarter and down 6.4% compared to year-end.

Reaffirmed Fiscal 2023 Outlook

The Company's reaffirmed fiscal 2023 outlook is as follows:

· Net sales in the range of $645 million to $660 million

· Adjusted EBITDA1 in the range of $47 million to $49 million

· EPS in the range of $0.02 to $0.08 per diluted share

· Capital expenditures, inclusive of software hosting implementation costs,


    of approximately  $55 million

1See Reconciliation of forecasted net income to forecasted EBITDA and forecasted EBITDA to forecasted Adjusted EBITDA in the accompanying financial tables.

Conference Call Information

A conference call and audio webcast with analysts and investors will be held on Thursday, June 1, 2023 at 9:30 am Eastern Time, to discuss the results and answer questions.

· Live conference call: 844-875-6915 (domestic) or 412-317-6711 (international)

· Conference call replay available through June 8, 2023: 877-344-7529 (domestic)

or 412-317-0088 (international)

· Replay access code: 8504935

· Live and archived webcast: ir.duluthtrading.com

Investors can pre-register for the earnings conference call to expedite their entry into the call and avoid waiting for a live operator. To pre-register for the call, please visit https://dpregister.com/sreg/10178202/f937a546b8 and enter your contact information. You will then be issued a personalized phone number and pin to dial into the live conference call. Investors can pre-register any time prior to the start of the conference call.

About Duluth Trading

Duluth Trading is a lifestyle brand for the Modern, Self-Reliant American. Based in Mount Horeb, Wisconsin, we offer high quality, solution-based casual wear, workwear and accessories for men and women who lead a hands-on lifestyle and who value a job well-done. We prov

ide our customers an engaging and entertaining experience. Our marketing incorporates humor and storytelling that conveys the uniqueness of our products in a distinctive, fun way, and are available through our content-rich website, catalogs, and "store like no other" retail locations. We are committed to outstanding customer service backed by our "No Bull Guarantee" - if it's not right, we'll fix it. Visit our website at http://www.duluthtrading.com.





Non-GAAP Measurements



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