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On September 9, Destination XL Group (NASDAQ:DXLG) reported second-quarter results that tell two different stories depending on which line you read. Net sales fell 3.4% to $111.6 million, and comparable sales dropped 3.5%, yet adjusted EBITDA jumped to $7.7 million from $4.7 million a year earlier. Interim CEO Lionel Conacher framed the quarter as proof a turnaround is taking hold. The same week, DXL also walked away from its planned merger with FullBeauty, adding another twist to an already complicated year for the big-and-tall retailer.
The clearest sign of progress sits in the monthly cadence. Comparable sales moved from down 5.7% in May to down 2.8% in June to down 1.9% in July, and CFO Peter Stratton called the resulting quarterly figure the strongest comp Destination XL has posted in 3 years. Adjusted EPS reached $0.05, up from $0.01, and GAAP net income hit $2.0 million, helped by a $4.6 million tariff refund collected during the quarter. Behind that improvement sits a balance sheet built for patience. As of August 1, Destination XL held $20.1 million in cash, carried zero debt, and had $61.7 million of available credit on a facility that doesn't mature until August 13, 2030. Inventory fell to $75.5 million from $78.9 million, and clearance stock held at 9.8%, right at the company's own 10% target, leaving little excess merchandise to mark down later.
