3 unchanged sentences
(Amounts in thousands)
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: February 2, 2025
Current Assets:
14 unchanged sentences
(Amounts in thousands)
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: February 2, 2025
LIABILITIES AND SHAREHOLDERS' EQUITY
2 unchanged sentences
Accrued expenses and other current liabilities
+Added: Income taxes payable
Current portion of operating lease liabilities
Current portion of finance lease liabilities
−Removed: Duluth line of credit
+Added: Line of credit
Current maturities of TRI long-term debt
8 unchanged sentences
10,000 shares authorized;
−Removed: issued or outstanding as of October 27, 2024 and January 28, 2024
+Added: issued or outstanding as of May 4, 2025 and February 2, 2025
Common stock (Class A), no par value;
10,000 shares authorized;
−Removed: issued and outstanding as of October 27, 2024 and January 28, 2024
+Added: issued and outstanding as of May 4, 2025 and February 2, 2025
Common stock (Class B), no par value;
200,000 shares authorized;
−Removed: 32,072 shares issued and 31,807 shares outstanding as of October 27, 2024 and
−Removed: 31,178 shares issued and 31,023 shares outstanding as of January 28, 2024
+Added: 32,154 shares issued and 31,890 shares outstanding as of May 4, 2025 and
+Added: 32,077 shares issued and 31,813 shares outstanding as of February 2, 2025
Treasury stock, at cost;
−Removed: 265 and 155 shares as of October 27, 2024 and
−Removed: January 28, 2024, respectively
+Added: 264 and 264 shares as of May 4, 2025 and
+Added: February 2, 2025, respectively
Capital stock
10 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: October 27, 2024
−Removed: October 29, 2023
−Removed: October 27, 2024
−Removed: October 29, 2023
+Added: April 28, 2024
Cost of goods sold (excluding depreciation and amortization)
Selling, general and administrative expenses
−Removed: Restructuring expense
Operating loss
Interest expense
−Removed: Other income, net
+Added: Other (loss) income, net
Loss before income taxes
Income tax expense (benefit)
−Removed: Net income (loss) attributable to noncontrolling interest
+Added: Net income attributable to noncontrolling interest
Net loss attributable to controlling interest
10 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: October 27, 2024
−Removed: October 29, 2023
−Removed: October 27, 2024
−Removed: October 29, 2023
+Added: April 28, 2024
Other comprehensive loss
4 unchanged sentences
Comprehensive loss
−Removed: Comprehensive income (loss) attributable to noncontrolling interest
+Added: Comprehensive income attributable to noncontrolling interest
Comprehensive loss attributable
4 unchanged sentences
(Amounts in thousands)
−Removed: Nine Months Ended October 27, 2024
+Added: Three Months Ended May 4, 2025
Noncontrolling
4 unchanged sentences
(loss) income
−Removed: Balance at January 28, 2024
+Added: Balance at February 2, 2025
Issuance of common stock
4 unchanged sentences
Net (loss) income
−Removed: Balance at April 28, 2024
−Removed: Issuance of common stock
−Removed: Stock-based compensation
−Removed: Restricted stock forfeitures
−Removed: Restricted stock surrendered for taxes
−Removed: Other comprehensive income
−Removed: Net (loss) income
−Removed: Balance at July 28, 2024
−Removed: Issuance of common stock
−Removed: Stock-based compensation
−Removed: Restricted stock forfeitures
−Removed: Restricted stock surrendered for taxes
−Removed: Other comprehensive income
−Removed: Net (loss) income
−Removed: Balance at October 27, 2024
+Added: Balance at May 4, 2025
The accompanying notes are an integral part of these condensed consolidated financial statements.
2 unchanged sentences
(Amounts in thousands)
−Removed: Nine Months Ended October 29, 2023
+Added: Three Months Ended April 28, 2024
Noncontrolling
10 unchanged sentences
Balance at April 28, 2024
−Removed: Issuance of common stock
−Removed: Stock-based compensation
−Removed: Restricted stock forfeitures
−Removed: Restricted stock surrendered for taxes
−Removed: Other comprehensive income
−Removed: Balance at July 30, 2023
−Removed: Issuance of common stock
−Removed: Stock-based compensation
−Removed: Restricted stock forfeitures
−Removed: Restricted stock surrendered for taxes
−Removed: Other comprehensive loss
−Removed: Balance at October 29, 2023
The accompanying notes are an integral part of these condensed consolidated financial statements.
2 unchanged sentences
(Amounts in thousands)
−Removed: Nine Months Ended
−Removed: October 27, 2024
−Removed: October 29, 2023
+Added: Three Months Ended
+Added: April 28, 2024
Cash flows from operating activities:
9 unchanged sentences
Trade accounts payable
−Removed: Income taxes payable
Accrued expenses and deferred rent obligations
6 unchanged sentences
Cash flows from financing activities:
−Removed: Net borrowings on line of credit
+Added: Proceeds from line of credit
+Added: Payments on line of credit
Payments on TRI long term debt
2 unchanged sentences
Net cash provided by financing activities
−Removed: Decrease in cash and cash equivalents
+Added: Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
29 unchanged sentences
Fiscal 2025 is a 52-week period and ends on February 1 , 2026.
−Removed: Fiscal 2023 was a 52-week period and ended on January 28, 2024.
−Removed: The three months of fiscal 2024 and fiscal 2023 represent the Company’s 13-week periods ended October 27, 2024 and October 29, 2023, respectively.
−Removed: The accompanying condensed consolidated financial statements as of and for the three and nine months ended October 27, 2024 and October 29, 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.
+Added: Fiscal 2024 was a 53-week period and ended on February 2, 2025.
+Added: The three months of fiscal 2025 and fiscal 2024 represent the Company’s 13-week periods ended May 4, 2025 and April 28, 2024, respectively.
+Added: The accompanying condensed consolidated financial statements as of and for the three months ended May 4, 2025 and April 28, 2024 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.
−Removed: GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three and nine months ended October 27, 2024 and October 29, 2023.
−Removed: 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.
+Added: GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three months ended May 4, 2025 and April 28, 2024.
+Added: 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 February 2, 2025.
Inventory consists of finished goods stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out valuation method.
The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost.
−Removed: Inventory reserve for excess and obsolete items was $ 1.6 million and $ 1.4 million as of October 27, 2024 and January 28, 2024, respectively.
+Added: Inventory reserve for excess and obsolete items was $ 2.3 million and $ 2.1 million as of May 4, 2025 and February 2, 2025, respectively.
DULUTH HOLDINGS INC.
2 unchanged sentences
Prepaid expenses and other assets consist of the following:
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: February 2, 2025
(in thousands)
16 unchanged sentences
Significant Accounting Policies
−Removed: There have been no significant changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended January 28, 2024.
+Added: There have been no significant changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended February 2, 2025.
DULUTH HOLDINGS INC.
17 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
of Operations
−Removed: October 27, 2024
−Removed: October 29, 2023
−Removed: October 27, 2024
−Removed: October 29, 2023
+Added: April 28, 2024
(in thousands)
20 unchanged sentences
Other information related to leases were as follows:
−Removed: Nine Months Ended
−Removed: October 27, 2024
−Removed: October 29, 2023
+Added: Three Months Ended
+Added: April 28, 2024
(in thousands)
11 unchanged sentences
Operating leases
−Removed: Future minimum lease payments under the non-cancellable leases are as follows as of October 27, 2024:
+Added: Future minimum lease payments under the non-cancellable leases are as follows as of May 4, 2025:
(in thousands)
7 unchanged sentences
Debt consists of the following:
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: February 2, 2025
(in thousands)
17 unchanged sentences
(i) the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus the applicable rate of 1.25 % to 2.00 % determined based on the Company’s rent adjusted leverage ratio, or (ii) the base rate plus the applicable rate of 0.25 % to 1.00 % based on the Company’s rent adjusted leverage ratio.
−Removed: The Credit Agreement was secured by essentially all Company assets and requires the Company to maintain compliance with certain financial and non-financial covenants, including a maximum rent adjusted leverage ratio and a minimum fixed charge coverage ratio as defined in the Credit Agreement.
+Added: The Credit Agreement was secured by essentially all Company assets and required the Company to maintain compliance with certain financial and non-financial covenants, including a maximum rent adjusted leverage ratio and a minimum fixed charge coverage ratio as defined in the Credit Agreement.
On July 8, 2022, the Company entered into the First Amendment to the Credit Agreement (the “First Amendment”), which was treated as a modification for accounting purposes.
−Removed: The First Amendment amends the Credit Agreement in order to (i) increase the revolving commitment from $ 150.0 million to $ 200.0 million;
+Added: The First Amendment amended the Credit Agreement in order to (i) increase the revolving commitment from $ 150.0 million to $ 200.0 million;
(ii) extend the maturity date from May 14, 2026 to July 8, 2027 ;
1 unchanged sentence
and (iv) reduce the commitment fee in some instances.
−Removed: As of October 27, 2024 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.
+Added: On January 31, 2025 the Company entered into the Second Amendment to the Credit Agreement (the “Second Amendment”).
+Added: The Second Amendment amended the Credit Agreement, in part, to (i) decrease the revolving commitment from $ 200 million to $ 100 million;
+Added: (ii) revise the definition of “Applicable Rate” to provide for pricing terms in the event of a Rent Adjusted Leverage Ratio greater than or equal to 3.50 :1.0;
+Added: (iii) limit the exceptions to the prohibition on restricted payments to (a) making dividends or distributions by any subsidiary to the Company, and (b) the acquisition of equity interests in satisfaction of tax withholding obligations associated with restricted stock or awards under employee incentive plans;
+Added: and (iv) provide that the Maximum Rent Adjusted Leverage Ratio and the Minimum Fixed Charge Coverage Ratio will be measured commencing on the fiscal quarter ending May 2, 2021 and measured quarterly thereafter as of the last day of each fiscal quarter of the Company (other than for the fiscal quarter ending February 2, 2025).
+Added: The reduction in the revolving commitment rightsized the credit facility with the Company’s cash needs to fund seasonal inventory builds and capital
DULUTH HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
+Added: expenditure expectations and resulted in fee savings.
+Added: The Credit Agreement was extinguished on April 28, 2025, resulting in a write down of $ 0.2 million of debt issuance costs related to the terminated line of credit.
+Added: On April 28, 2025, the Company entered into a new credit agreement (the “New Credit Agreement”) among the Company, certain financial institutions as Lenders thereto, and BMO Bank N.A., as Administrative Agent, a Swing Line Lender and a Letter of Credit Issuer.
+Added: The Credit Agreement provides for borrowings of up to $ 100.0 million in aggregate principal amount that are available under an asset-based revolving senior credit facility (the “Revolver”) with a $ 10.0 million sublimit for the issuance of standby letters of credit.
+Added: Under the New Credit Agreement, (i) each Secured Overnight Financing Rate (“SOFR”) loan will bear interest on the outstanding principal amount at a rate per annum equal to adjusted term SOFR plus 150 basis points;
+Added: (ii) each base rate loan will bear interest on the outstanding principal amount from the applicable borrowing date at a rate per annum equal to the Base Rate (as defined in the New Credit Agreement) plus 50 basis points;
+Added: (iii) each swing line loan will bear interest on the outstanding principal amount from the applicable borrowing date at a rate per annum equal to the base rate plus the applicable margin;
+Added: and (iv) each other obligation will bear interest on the unpaid amount at a rate per annum equal to the base rate plus the applicable margin.
+Added: The new $ 100.0 million Revolver replaces the current revolving credit facility at a lower interest rate and extends the availability of funds to April 28, 2030 .
+Added: The Company believes the New Credit Agreement will provide the Company with flexibility and liquidity to finance seasonal inventory builds.
+Added: DULUTH HOLDINGS INC.
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: February 2, 2025
(in thousands)
13 unchanged sentences
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
−Removed: The Company’s assets and liabilities measured at fair value are categorized as Level 1 or Level 3 instruments.
−Removed: The fair value of the Company’s money market account is obtained from real-time quotes for transactions in active exchange markets involving identical assets (Level 1).
+Added: The Company’s assets and liabilities measured at fair value are categorized as Level 3 instruments.
The fair value of the Company’s available-for-sale security was valued based on a discounted cash flow method (Level 3), which incorporates the U.S.
Treasury yield curve, credit information and an estimate of future cash flows.
−Removed: During the nine months ended October 27, 2024, certain changes in the inputs did impact the fair value of the available-for-sale security.
+Added: During the three months ended May 4, 2025, 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.
Changes in assumptions could significantly affect the estimates.
−Removed: 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:
−Removed: October 27, 2024
+Added: The amortized cost and fair value of the Company’s available-for-sale security and the corresponding amount of gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:
(in thousands)
Level 3 security:
−Removed: Money market funds
−Removed: Level 3 security:
Corporate trust
1 unchanged sentence
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: January 28, 2024
+Added: February 2, 2025
(in thousands)
Level 3 security:
−Removed: Money market funds
−Removed: Level 3 security:
Corporate trust
1 unchanged sentence
The Company reviews its securities on a quarterly basis to monitor its exposure to other-than-temporary impairment.
−Removed: No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the three months ended October 27, 2024 or October 29, 2023 .
−Removed: The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of October 27, 2024.
+Added: No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the three months ended May 4, 2025 or April 28, 2024 .
+Added: The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of May 4, 2025.
(in thousands)
4 unchanged sentences
The carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows:
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: February 2, 2025
Carrying Amount
8 unchanged sentences
(a) the power to direct the VIE activities that most significantly impact economic performance;
−Removed: and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to
−Removed: DULUTH HOLDINGS INC.
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: The Company has determined that it was the primary beneficiary of one VIE as of October 27, 2024 and January 28, 2024.
+Added: and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE.
+Added: The Company has determined that it was the primary beneficiary of one VIE as of May 4, 2025 and February 2, 2025.
The Company leases the Company’s headquarters in Mt.
3 unchanged sentences
The Company considers itself the primary beneficiary for TRI as the Company has both the power to direct the activities that most significantly impact the entity’s economic performance and is expected to receive benefits that are significant to TRI.
−Removed: As the Company is the primary beneficiary, it consolidates TRI and the lease is eliminated in consolidation.
+Added: As the Company is the
+Added: DULUTH HOLDINGS INC.
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
+Added: primary beneficiary, it consolidates TRI and the lease is eliminated in consolidation.
The Company does not consolidate the trust as the Company is not the primary beneficiary.
−Removed: The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of October 27, 2024 and January 28, 2024:
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of May 4, 2025 and February 2, 2025:
+Added: February 2, 2025
(in thousands)
12 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: October 27, 2024
−Removed: October 29, 2023
−Removed: October 27, 2024
−Removed: October 29, 2023
+Added: April 28, 2024
(in thousands, except per share data)
5 unchanged sentences
Loss per share (Class A and Class B)
−Removed: The computation of diluted loss per share excluded ( 0.3 ) million and 0.1 million of unvested restricted stock for the three months ended October 27, 2024 and October 29, 2023, because their inclusion would be anti-dilutive due to a net loss.
−Removed: The computation of diluted loss per share excluded 0.0 million and 0.5 million of unvested restricted stock for the nine months ended October 27, 2024 and October 29, 2023, because their inclusion would be anti-dilutive due to a net loss.
−Removed: DULUTH HOLDINGS INC.
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
+Added: The computation of diluted loss per share excluded ( 0.8 ) million and 0.3 million of unvested restricted stock for the three months ended May 4, 2025 and April 28, 2024, because their inclusion 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.
−Removed: Total stock compensation expense associated with restricted stock recognized by the Company was $ 1.0 million and $ 3.4 million for the three and nine months ended October 27, 2024, respectively.
+Added: Total stock compensation expense associated with restricted stock recognized by the Company was $ 0.3 million and $ 1.4 million for the three months ended May 4, 2025 and April 28, 2024 respectively.
The Company’s total stock compensation expense is included in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations.
−Removed: A summary of the activity in the Company’s unvested restricted stock during the nine months ended October 27, 2024 is as follows:
−Removed: Outstanding at January 28, 2024
−Removed: Outstanding at October 27, 2024
−Removed: At October 27, 2024, the Company had unrecognized compensation expense of $ 6.8 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.6 years.
+Added: DULUTH HOLDINGS INC.
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
+Added: A summary of the activity in the Company’s unvested restricted stock during the three months ended May 4, 2025 is as follows:
+Added: Outstanding at February 2, 2025
+Added: Outstanding at May 4, 2025
+Added: At May 4, 2025, the Company had unrecognized compensation expense of $ 3.9 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.7 years.
PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: February 2, 2025
(in thousands)
10 unchanged sentences
Store revenue is recognized at the point of sale, net of returns, and excludes taxes.
−Removed: 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
−Removed: DULUTH HOLDINGS INC.
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: as a component of selling, general and administrative expenses.
+Added: 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.
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
−Removed: Nine Months Ended
−Removed: October 27, 2024
−Removed: October 29, 2023
−Removed: October 27, 2024
−Removed: October 29, 2023
+Added: April 28, 2024
(in thousands)
Direct-to-consumer
+Added: DULUTH HOLDINGS INC.
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
Contract Assets and Liabilities
4 unchanged sentences
Contract assets and liabilities on the Company’s consolidated balance sheets are presented in the following table:
−Removed: October 27, 2024
−Removed: January 28, 2024
+Added: February 2, 2025
(in thousands)
4 unchanged sentences
Gift card breakage is recorded within Net sales on the Company’s consolidated statement of operations.
−Removed: The following table provides the reconciliation of the contract liability related to gift cards for the nine months ended:
−Removed: October 27, 2024
−Removed: October 29, 2023
+Added: The following table provides the reconciliation of the contract liability related to gift cards for the three months ended:
+Added: April 28, 2024
(in thousands)
5 unchanged sentences
The Company’s provision for income taxes during the interim reporting periods has historically been calculated by applying an estimate of the annual effective tax rate for the full year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period.
−Removed: The effective tax rate related to controlling interest was ( 4.2 %) and 23 % for the nine months ended October 27, 2024 and October 29, 2023, respectively.
+Added: The effective tax rate related to controlling interest was ( 9 %) and 21 % for the three months ended May 4, 2025 and April 28, 2024 , 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 tax.
−Removed: The effective tax rate fluctuated significantly year over year primarily as a result of the Company recording a valuation allowance on its deferred tax assets as of October 27, 2024.
+Added: The effective tax rate fluctuated significantly year over year primarily as a result of the Company recording a valuation allowance on its deferred tax assets as of May 4, 2025.
+Added: SEGMENT REPORTING
+Added: As of May 4, 2025 and April 28, 2024, we had one reportable segment.
+Added: The Company’s operating segment is based on how the Chief Operating Decision Maker (“CODM”) makes decisions about allocating resources and assessing performance.
+Added: Our CODM is our Chief Executive Officer and the CODM receives discrete financial information for the Company’s gross margin and a summarized comprehensive statement of income monthly that categorizes selling, general and administrative expenses
DULUTH HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: The Company regularly assesses the realizability of deferred tax assets and under the asset and liability method prescribed under ASC 740, Income Taxes , the Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.
−Removed: Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled.
−Removed: The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
−Removed: The realizability of deferred tax assets is assessed throughout the year and a valuation allowance is recorded, if necessary, to reduce net deferred tax assets to the amount more likely than not to be realized.
−Removed: The Company considers all available evidence, both positive and negative, to determine the realizability of deferred tax assets and includes historical information about results of operations for the current and preceding years as well as more subjective information about future years.
−Removed: In conducting this assessment, a significant piece of objective negative evidence evaluated by management was a cumulative loss over the most recent 36-month period ended October 27, 2024, which was not outweighed by available positive evidence and which limited the Company’s ability to give weight to projections of future growth for purposes of this assessment.
−Removed: Accordingly, as of October 27, 2024, a valuation allowance of $ 10.1 million was provided against the net amount of deferred tax assets.
−Removed: The amount of the deferred tax assets considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.
−Removed: As of January 28, 2024, there was no valuation allowance for deferred tax assets.
−Removed: RESTRUCTURING
−Removed: As part of the Company’s in-depth review of the retail portfolio strategy, fulfillment center network, and benchmarking to identify structural opportunities to improve operating margin, working capital, and asset efficiency, the Company began phase two of its fulfillment center network plan to maximize productivity and capacity.
−Removed: This was initiated in the second quarter of 2024 and is expected to continue beyond this fiscal year as we implement further structural changes.
−Removed: On July 12, 2024, as a result of the phase two analysis of the fulfillment center network, the Company voluntarily entered into a lease amendment for one of its legacy fulfillment center leases in Dubuque, Iowa.
−Removed: The amended lease accelerated the lease expiration date from September 30, 2030 to October 27, 2024 .
−Removed: The amended lease requires Duluth to pay an aggregate of $ 3.7 million (the “Termination Penalty”) in consideration of accelerating the lease termination date, which will be paid in four equal quarterly installments from October 2024 through August 2025.
−Removed: The Company amortized the loss from the Termination Penalty, as well as the net loss from writing off the right-of-use asset and lease liability over the modified remaining lease term.
−Removed: In addition, the Company accelerated the depreciation of the non-transferrable fixed assets to have no remaining net book value as of the modified lease expiration date.
−Removed: During the three and nine months ended October 27, 2024, the Company recognized restructuring charges of $ 6.2 million and $ 7.7 million, respectively.
+Added: into four line items with remaining expenses and expenditures for long-lived assets being consolidated as an omnichannel business.
+Added: The following table summarizes the Company’s gross margin and selling, general and administrative expenses.
Three Months Ended
−Removed: Nine Months Ended
−Removed: October 27, 2024
−Removed: October 27, 2024
+Added: April 28, 2024
(in thousands)
−Removed: Early contract termination expense
−Removed: Lease remeasurement expense
−Removed: Accelerated depreciation expense
−Removed: Employee termination benefit expense
−Removed: Other restructuring expense
−Removed: Total restructuring expenses
−Removed: CONTINGENCIES
−Removed: In the second quarter of 2024, in conjunction with ongoing state sales tax audits the Company began a review of its sales tax positions.
−Removed: As a result of the review, the Company determined that sales in a state were subject to certain local sales tax and that the Company had not sufficiently assessed such sales tax on sales to customers in prior fiscal years.
−Removed: DULUTH HOLDINGS INC.
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
−Removed: The Company concluded that some payment to the state is probable.
−Removed: As of October 27, 2024, the Company recorded an estimated sales tax expense accrual of $ 2.4 million that is reflected in Selling, general and administrative expenses within the Consolidated Statements of Operations.
−Removed: DULUTH HOLDINGS INC.
−Removed: Notes to Condensed Consolidated Financial Statements (Unaudited)
+Added: Cost of goods sold
+Added: Outbound shipping expenses
+Added: Advertising expenses
+Added: Variable expenses
+Added: Overhead expenses
+Added: Total selling, general and administrative
+Added: Operating loss
+Added: Interest expense
+Added: Other (loss) income, net
+Added: Loss before income taxes
+Added: Income tax expense (benefit)
+Added: Net income (loss) attributable to noncontrolling interest
+Added: Net loss attributable to controlling interest
RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted Accounting Pronouncements
−Removed: Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments
−Removed: In June 2016, the FASB issued Accounting Standards Update No.
−Removed: 2016-13 “Financial Instruments-Credit Losses (Topic 326):
−Removed: Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, which include trade and other receivables, loans and held-to-maturity debt securities, to record an allowance for credit risk based on expected losses rather than incurred losses, otherwise known as “CECL”.
−Removed: In addition, this guidance changes the recognition for credit losses on available-for-sale debt securities, which can occur as a result of market and credit risk and requires additional disclosures.
−Removed: On November 15, 2019, the FASB issued ASU No.
−Removed: 2019-10 “Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815, and Leases (Topic 842),” (ASU 2019-10”), which provides a framework to stagger effective dates for future major accounting standards and amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities.
−Removed: ASU 2019-10 amends the effective dates for ASU 2016-13 for smaller reporting companies with fiscal years beginning after December 15, 2022, and interim periods within those years.
−Removed: The Company adopted ASU 2016-13 on January 30, 2023, the first day of the Company’s first quarter for the fiscal year ending January 28, 2024, the Company’s fiscal year 2023.
−Removed: Recent Accounting Pronouncements Not Yet Adopted
Segment Reporting – Improvements to Reportable Segment Disclosures
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The new guidance is effective for public companies with annual periods beginning after December 15, 2023, and interim periods within an annual period beginning after December 15, 2024, with early adoption permitted.
−Removed: Management is currently evaluating the effects this guidance will have on its consolidated financial statements.
+Added: The Company adopted ASU 2023-07 on January 29, 2024, the first day of the Company’s first quarter for the fiscal year ending February 2, 2025, the Company’s fiscal year 2024.
+Added: Recent Accounting Pronouncements Not Yet Adopted
Income Taxes – Improvements to Income Tax Disclosures
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Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures
+Added: DULUTH HOLDINGS INC.
+Added: Notes to Condensed Consolidated Financial Statements (Unaudited)
In November 2024, the FASB issued ASU No.
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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.