What changed in this filing

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Item 1. Financial Statements

2024-05-31 compared with 2023-12-01 · 92 added, 125 removed, 437 unchanged (33% of the section changed)

3 unchanged sentences

(Amounts in thousands)

October 29, 2023

April 28, 2024

January 28, 2024

15 unchanged sentences

(Amounts in thousands)

October 29, 2023

April 28, 2024

January 28, 2024

LIABILITIES AND SHAREHOLDERS'

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

1 unchanged sentence

Accrued expenses and other current liabilities

Income taxes payable

Current portion of operating lease liabilities

6 unchanged sentences

TRI long-term debt, less current maturities

Deferred tax liabilities

Total liabilities

Shareholders'

Shareholders' equity:

Preferred stock, no par value;

10,000 shares authorized;

‎ issued or outstanding as of October 29, 2023 and January 29, 2023

‎ issued or outstanding as of April 28, 2024 and January 28, 2024

Common stock (Class A), no par value;

10,000 shares authorized;

issued and outstanding as of October 29, 2023 and January 29, 2023

‎ issued and outstanding as of April 28, 2024 and January 28, 2024

Common stock (Class B), no par value;

200,000 shares authorized;

31,264 shares issued and 31,110 shares outstanding as of October 29, 2023 and

‎ 31,945 shares issued and 31,710 shares outstanding as of April 28, 2024 and

‎ 31,178 shares issued and 31,023 shares outstanding as of January 28, 2024

Treasury stock, at cost;

154 and 112 shares as of October 29, 2023 and

235 and 155 shares as of April 28, 2024 and

‎ January 28, 2024, respectively

2 unchanged sentences

Accumulated other comprehensive loss

Total shareholders'

equity of Duluth Holdings Inc.

Total shareholders' equity of Duluth Holdings Inc.

Noncontrolling interest

Total shareholders'

Total liabilities and shareholders'

Total shareholders' equity

Total liabilities and shareholders' equity

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

Three Months Ended

Nine Months Ended

October 29, 2023

October 30, 2022

October 29, 2023

October 30, 2022

April 28, 2024

April 30, 2023

Cost of goods sold (excluding depreciation and amortization)

5 unchanged sentences

Income tax benefit

Net loss attributable to noncontrolling interest

Net income (loss) attributable to noncontrolling interest

Net loss attributable to controlling interest

10 unchanged sentences

Three Months Ended

Nine Months Ended

October 29, 2023

October 30, 2022

October 29, 2023

October 30, 2022

Other comprehensive income

April 28, 2024

April 30, 2023

Other comprehensive loss

Securities available-for sale:

3 unchanged sentences

Comprehensive loss

Comprehensive loss attributable to noncontrolling interest

Comprehensive income (loss) attributable to noncontrolling interest

Comprehensive loss attributable

4 unchanged sentences

(Amounts in thousands)

Nine Months Ended October 29, 2023

Three Months Ended April 28, 2024

Noncontrolling

2 unchanged sentences

variable interest

shareholders'

income (loss)

shareholders'

Balance at January 28, 2024

4 unchanged sentences

Other comprehensive loss

Net (loss) income

Balance at April 28, 2024

Issuance of common stock

Stock-based compensation

Restricted stock forfeitures

Restricted stock surrendered for taxes

Other comprehensive loss

Balance at July 30, 2023

Issuance of common stock

Stock-based compensation

Restricted stock forfeitures

Restricted stock surrendered for taxes

Other comprehensive income

Balance at October 29, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Nine Months Ended October 30, 2022

Three Months Ended April 30, 2023

Noncontrolling

2 unchanged sentences

variable interest

shareholders'

Balance at January 29, 2023

4 unchanged sentences

Other comprehensive income

Balance at May 1, 2022

Issuance of common stock

Stock-based compensation

Restricted stock forfeitures

Restricted stock surrendered for taxes

Other comprehensive income

Net income (loss)

Balance at July 31, 2022

Issuance of common stock

Stock-based compensation

Restricted stock forfeitures

Restricted stock surrendered for taxes

Other comprehensive loss

Balance at October 30, 2022

Balance at April 30, 2023

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Nine Months Ended

October 29, 2023

October 30, 2022

Three Months Ended

April 28, 2024

April 30, 2023

Cash flows from operating activities:

8 unchanged sentences

Software hosting implementation costs, net

Deferred catalog costs

Trade accounts payable

6 unchanged sentences

Principal receipts from available-for-sale security

Proceeds from disposals

Net cash used in investing activities

5 unchanged sentences

Payments of tax withholding on vested restricted shares

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Decrease in cash and cash equivalents

29 unchanged sentences

The Company’s fiscal year ends on the Sunday nearest to January 31 of the following year.

Fiscal 2023 is a 52-week period and ends on January 28 , 2024 .

Fiscal 2024 is a 53-week period and ends on February 2 , 2025 .

Fiscal 2023 was a 52-week period and ended on January 28, 2024.

The three months of fiscal 2023 and fiscal 2022 represent the Company’s 13-week periods ended October 29, 2023 and October 30, 2022, respectively.

The accompanying condensed consolidated financial statements as of and for the three and nine months ended October 29, 2023 and October 30, 2022 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented.

The three months of fiscal 2024 and fiscal 2023 represent the Company’s 13-week periods ended April 28, 2024 and April 30, 2023, respectively.

The accompanying condensed consolidated financial statements as of and for the three months ended April 28, 2024 and April 30, 2023 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three and nine months ended October 29, 2023 and October 30, 2022.

GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three months ended April 28, 2024 and April 30, 2023.

These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the fiscal year ended January 28, 2024.

Impairment Analysis

As of October 29, 2023 and for the three and nine months ended, no triggering events or indicators of asset impairment were noted.

As of April 28, 2024 and for the three months ended, no triggering events or indicators of asset impairment were noted.

Inventory, consisting of purchased product, is valued at the lower of cost or net realizable value, under the first-in, first-out method.

8 unchanged sentences

Prepaid expenses and other assets consist of the following:

October 29, 2023

April 28, 2024

January 28, 2024

16 unchanged sentences

Amounts receivable from credit card issuers are typically converted to cash within 2 to 4 days of the original sales transaction and are considered to be cash equivalents.

Reclassifications

Certain reclassifications have been made to the 2022 financial statements in order to conform to the 2023 presentation.

The Company reclassified $ 4.2 million and ($ 4.2 ) million from Property, Plant & Equipment and Prepaid Expenses, respectively, in the prior period.

There were no changes to previously reported shareholders'

equity, statement of cash flows or net income (loss) as a result of the reclassifications.

Significant Accounting Policies

19 unchanged sentences

Three Months Ended

Nine Months Ended

of Operations

October 29, 2023

October 30, 2022

October 29, 2023

October 30, 2022

April 28, 2024

April 30, 2023

(in thousands)

20 unchanged sentences

Other information related to leases were as follows:

Nine Months Ended

October 29, 2023

October 30, 2022

Three Months Ended

April 28, 2024

April 30, 2023

(in thousands)

11 unchanged sentences

Operating leases

Future minimum lease payments under the non-cancellable leases are as follows as of October 29, 2023:

Future minimum lease payments under the non-cancellable leases are as follows as of April 28, 2024:

(in thousands)

7 unchanged sentences

Debt consists of the following:

October 29, 2023

April 28, 2024

January 28, 2024

24 unchanged sentences

and (iv) reduce the commitment fee in some instances.

As of October 29, 2023 and for the nine months then ended, the Company was in compliance with all financial and non-financial covenants contained within the Credit Agreement and the First Amendment.

As of April 28, 2024 and for the three months then ended, the Company was in compliance with all financial and non-financial covenants contained within the Credit Agreement and the First Amendment.

DULUTH HOLDINGS INC.

2 unchanged sentences

Accrued expenses and other current liabilities consist of the following:

October 29, 2023

April 28, 2024

January 28, 2024

18 unchanged sentences

Treasury yield curve, credit information and an estimate of future cash flows.

During the nine months ended October 29, 2023, certain changes in the inputs did impact the fair value of the available-for-sale security.

During the three months ended April 28, 2024, certain changes in the inputs did impact the fair value of the available-for-sale security.

The calculated fair value is based on estimates that are subjective in nature and involve uncertainties and matters of significant judgement and, therefore, cannot be determined with precision.

1 unchanged sentence

The amortized cost and fair value of the Company’s money market account and available-for-sale security and the corresponding amount of gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:

October 29, 2023

April 28, 2024

(in thousands)

13 unchanged sentences

The Company reviews its securities on a quarterly basis to monitor its exposure to other-than-temporary impairment.

No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the nine months ended October 29, 2023 or October 30, 2022 .

The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of October 29, 2023.

No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the three months ended April 28, 2024 or April 30, 2023 .

The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of April 28, 2024.

(in thousands)

4 unchanged sentences

The carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows:

October 29, 2023

April 28, 2024

January 28, 2024

12 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company has determined that it was the primary beneficiary of one variable interest entity (“VIE”) as of October 29, 2023 and January 29, 2023.

The Company has determined that it was the primary beneficiary of one variable interest entity (“VIE”) as of April 28, 2024 and January 28, 2024.

The Company leases the Company’s headquarters in Mt.

5 unchanged sentences

The Company does not consolidate the trust as the Company is not the primary beneficiary.

The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of October 29, 2023 and January 29, 2023:

October 29, 2023

The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of April 28, 2024 and January 28, 2024:

April 28, 2024

January 28, 2024

5 unchanged sentences

Noncontrolling interest in VIE

Total liabilities and shareholders'

Total liabilities and shareholders' equity

LOSS PER SHARE

5 unchanged sentences

Three Months Ended

Nine Months Ended

October 29, 2023

October 30, 2022

October 29, 2023

October 30, 2022

April 28, 2024

April 30, 2023

(in thousands, except per share data)

5 unchanged sentences

Loss per share (Class A and Class B)

The computation of diluted loss per share excluded 0.3 million of unvested restricted stock for the three months ended April 28, 2024 and April 30, 2023, because their inclusion would be anti-dilutive due to a net loss.

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The computation of diluted loss per share excluded 0.1 million and 0.5 million shares of unvested restricted stock for the three and nine months ended October 29, 2023, respectively, because their inclusion would be anti-dilutive due to a net loss.

The computation of diluted loss per share excluded ( 0.1 ) million and 0.2 million shares of unvested restricted stock for the three and nine months ended October 30, 2022, respectively, because the inclusion of dilutive potential common shares outstanding would be anti-dilutive due to a net loss.

STOCK-BASED COMPENSATION

The Company accounts for its stock-based compensation plan in accordance with ASC 718, Stock Compensation , which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period of the award.

Total stock compensation expense associated with restricted stock recognized by the Company was $ 1.0 million and $ 3.3 million for the three and nine months ended October 29, 2023, respectively.

Total stock compensation expense associated with restricted stock recognized by the Company was $ 1.4 million and $ 1.0 million for the three months ended April 28, 2024 and April 30, 2023, respectively.

The Company’s total stock compensation expense is included in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations.

A summary of the activity in the Company’s unvested restricted stock during the nine months ended October 29, 2023 is as follows:

A summary of the activity in the Company’s unvested restricted stock during the three months ended April 28, 2024 is as follows:

Outstanding at January 28, 2024

Outstanding at October 29, 2023

At October 29, 2023, the Company had unrecognized compensation expense of $ 8.0 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.4 years.

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Outstanding at April 28, 2024

At April 28, 2024, the Company had unrecognized compensation expense of $ 8.7 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 3.0 years.

PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

October 29, 2023

April 28, 2024

January 28, 2024

11 unchanged sentences

Store revenue is recognized at the point of sale, net of returns, and excludes taxes.

Shipping and processing revenue generated from customer orders are included as a component of net sales and shipping and processing expense, including handling expense, is included as a component of selling, general and administrative expenses.

Shipping and processing revenue generated from customer orders are included as a component of net sales and shipping and processing expense, including handling expense, is included

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

as a component of selling, general and administrative expenses.

Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included in accrued expenses.

1 unchanged sentence

Three Months Ended

Nine Months Ended

October 29, 2023

October 30, 2022

October 29, 2023

October 30, 2022

April 28, 2024

April 30, 2023

(in thousands)

6 unchanged sentences

Contract assets and liabilities on the Company’s consolidated balance sheets are presented in the following table:

October 29, 2023

April 28, 2024

January 28, 2024

2 unchanged sentences

Contract liabilities

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Revenue from gift cards is recognized when the gift card is redeemed by the customer for merchandise or as a gift card breakage, an estimate of gift cards which will not be redeemed.

1 unchanged sentence

Gift card breakage is recorded within Net sales on the Company’s consolidated statement of operations.

The following table provides the reconciliation of the contract liability related to gift cards for the nine months ended:

October 29, 2023

October 30, 2022

The following table provides the reconciliation of the contract liability related to gift cards for the three months ended:

April 28, 2024

April 30, 2023

(in thousands)

4 unchanged sentences

Balance as of end of period

The provision for income taxes for the interim period is based on an estimate of the annual effective tax rate adjusted to reflect the impact of discrete items.

Management judgment is required in projecting ordinary income to estimate the Company’s annual effective tax rate.

The effective tax rate related to controlling interest was 23 % and 26 % for the nine months ended October 29, 2023 and October 30, 2022, respectively.

For the three months ended April 28, 2024, the Company has utilized the discrete effective tax rate method as allowed by Accounting Standards Codification ("ASC") 740-270-30-18, Income Taxes – Interim Reporting to calculate its interim tax provision.

The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis.

The Company believes that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method.

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The effective tax rate related to controlling interest was 21 % and 27 % for the three months ended April 28, 2024 and April 30, 2023, respectively.

The income from TRI was excluded from the calculation of the Company’s effective tax rate, as TRI is a limited liability company and not subject to income taxes.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued Accounting Standards Update No.

7 unchanged sentences

The adoption of the standard did not have a material impact on the Company’s consolidated financial results.

Recent Accounting Pronouncements Not Yet Adopted

Segment Reporting – Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU No.

2023-07, “Segment Reporting:

Improvements to Reportable Segment Disclosures.” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.

The new guidance is effective for public companies with annual periods beginning after December 15, 2023, and interim periods within annual period beginning after December 15, 2024, with early adoption permitted.

Management is currently evaluating the effects adoption of this guidance will have on its consolidated financial statements.

Income Taxes – Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No.

2023-09, “Income Taxes:

Improvements to Income Tax Disclosures.” This ASU improves the transparency of income tax disclosures by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation and (ii) income taxes paid disaggregated by jurisdiction.

This new guidance will be effective for annual periods beginning after December 15, 2024, and early adoption is permitted.

Management is currently evaluating the effects adoption of this guidance will have on its consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements