Why Destination XL Group Inc Shares Jumped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Destination XL Group Inc were looking stronger today, gaining as much as 13% after the company beat earnings estimates in its third-quarter report.
So what: The parent of big-and-tall clothing stores saw a per-share loss of $0.08, a penny above estimates, while revenues were essentially flat, improving 0.1% to $88.2 million, below the consensus at $89.3 million. Management said slower sales were due to a delay in store openings in August and September, but same-store sales actually improved 4.4% in the quarter, a respectable clip. Comps were especially strong at its namesake DXL stores, increasing 11.3%.
Now what: Aside from the delay in store openings, Destination XL seems to be on the right track in its strategy of shutting down Causal Male XL stores and opening Destination XL locations, and with the strong results from DXL stores, profits should soon follow. DXL Group is only targeting the low end of its full-year guidance range, and expects a per-share loss of $0.05, below estimates of a $0.06 profit; however, 2014 looks to be shaping up to be a strong year for the big-and-tall retailer.
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