DESTINATION XL GROUP, INC.
For the period ended Nov 1, 2025. Filed Dec 11, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 1, 2025 · Filed Dec 11, 2025
DXLG$0.43-2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-08-02; filed 2025-08-27.
0001193125-25-189456
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-11-01; filed 2025-12-11.
0001193125-25-316166
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 86 current paragraphs.
43 unchanged; 32 reworded; 11 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
SUBSEQUENT EVENT - AGREEMENT AND PLAN OF MERGER
Current report
On December 11, 2025, the Company, Divine Merger Sub I, Inc., a Delaware corporation and wholly owned direct subsidiary of the Company (“Merger Sub”), and FBB Holdings I, Inc., a Delaware corporation (“FBB” or “FullBeauty Brands”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into FBB, with FBB continuing as the surviving corporation as a wholly owned subsidiary of the Company (the “Merger”).
Current report
At the effective time of the Merger, each share of common stock, par value $0.01 per share, of FBB (“FBB Common Stock”) will be converted into the right to receive that number of fully paid and nonassessable shares of the common stock, par value $0.01 per share, of the Company (the “DXL Common Stock”) equal to the Exchange Ratio, as defined in the Merger Agreement. A holder of FBB Common Stock who would otherwise be entitled to receive a fraction of a share of DXL Common Stock will have such fractional share rounded up to one whole share of DXL Common Stock. Following the consummation of the Merger, holders of FBB Common Stock will own 55% of the combined company and holders of DXL Common Stock will own 45% of the combined company.
Current report
FullBeauty Brands, a private company with last twelve months sales as of October 2025 of approximately $0.7 billion, is a leading direct to consumer retailer specializing in size inclusive fashions for plus-size women and big + tall men, with brands that include KingSize®, Catherines®, WomanWithin®, Jessica London®, and Roaman's®, among others. We believe that this Merger will bring together complementary brands, channels and capabilities to better serve plus-size women and big + tall men. The combined company will have a more diverse and broader portfolio with one of the most comprehensive ranges of plus-size and big + tall options and will be well positioned for future growth opportunities.
Current report
The consummation of the Merger is subject to DXL and FBB stockholder approval and other customary closing conditions and is expected to close in the first half of 2026.
Current report
Our sales for the third quarter of fiscal 2025 were down 5.2% as compared to the prior year's third quarter, primarily driven by a decrease of 7.4% in comparable store sales. While the third quarter sales performance was a slight improvement from the first two quarters of fiscal 2025, traffic to our stores and direct business remains the primary reason for our sales shortfall. The overall weakness in the economy and consumer sentiment has resulted in a decrease in consumer spending that we believe is directly affecting our business. With the increasing availability of GLP-1 medications ,we believe that our FiTMAP technology, which is discussed below, uniquely positions us to help consumers respond to the positive effects of these medications. As our customers' weight loss journeys accelerate, their needs are shifting, as sizes change, confidence grows, and shopping habits evolve. We are embracing that journey using tools like FiTMAP.
Current report
Despite the dynamic consumer environment, we have proactively managed our inventory and controlled our markdowns, which has enabled us to maintain a solid merchandise margin and a healthy inventory position as we head into the holiday season. In addition, we have meaningfully reduced the impact of tariffs on our merchandise margin by aggressively pivoting our sourcing strategy to diversify away from high tariff countries, negotiating better cost sharing with vendors, and value engineering product cost savings. Given the volatility that currently exists around these trade discussions, it is difficult to determine the potential impact that these tariffs may have on our financial results. However, if currently enacted rates remain in effect throughout the remainder of the fiscal year, and no new tariffs are added, we estimate that the impact of tariffs on gross margin for fiscal 2025 will be approximately $2.0 million.
Current report
During the third quarter of fiscal 2025, we amended our credit facility to extend the maturity of the facility from October 28, 2026 to August 13, 2030. In connection with the amendment, we also reduced the size of the credit facility from $125.0 million to $100.0 million to more closely align the credit facility with the Company's lower inventory levels.
Current report
Since the start of the fiscal year, we have pursued three critically important initiatives to address ongoing volatility, evolving consumer dynamics, and challenges specific to the Big +Tall retail sector: Assortment, FitMAP Technology expansion and Promotional Strategy. We believe these initiatives will better position the Company’s return to growth.
Current report
While we have seen positive results from our loyalty program, Price Match Guarantee, FiTMAP, and our Heroes discounts, our total active customer file has continued to be under pressure as customers are spending less and shopping less frequently in the current environment.
Current report
Comparable sales through the first five weeks of the fourth quarter of fiscal 2025 were down 5.7%, which is an improvement in trend over the third quarter of fiscal 2025.
Removed paragraphs (5)
Previous report
During the second quarter of fiscal 2025, our comparable sales were down 9.2%, primarily driven by a decrease in traffic. Sales trends improved month over month, with comparable sales down 10.4% in May, down 9.6% in June, and down 7.0% in July. While our sales performance this quarter was disappointing, we were pleased that we were able to manage our merchandise margins and reduce our operating costs, resulting in an adjusted EBITDA for the second quarter of 4.0% of sales.
Previous report
There remains a significant amount of volatility in the market, particularly surrounding tariffs and the impact that these costs will have on an already concerned consumer. The actions we are taking, we believe, will directly address these ongoing consumer sector and macro challenges. Assuming the current global tariff rate policies and applications do not change for the remainder of fiscal 2025 and no new tariffs are added, we estimate the impact to add just under $4.0 million to our inventory receipts this year. We are leaning into our relationships with our vendors and suppliers around the world and we are working hard to mitigate the impact of those tariffs, as well as with a limited focus making retail changes in pricing select elements of the private brand offering. While there are a number of moving parts, and the clearer horizon is at best a ways ahead, we believe our broad and measured actions taken will ultimately improve our results and move the business forward.
Previous report
We have seen positive results from our Price Match Guarantee, Fit Exchange by DXL, and our Heroes discount and believe that these programs helped to offset some of the negative traffic.
Previous report
Sales performance from our direct business, which includes our website, app and marketplaces, improved slightly from the first quarter but continued to be challenged by decreases in online traffic and average order value. In addition, we have experienced some challenges with our new e-commerce platform, which we are actively addressing, that could be contributing to the sales performance for our direct business.
Previous report
Subsequent to the end of the second quarter of fiscal 2025, our store traffic is showing modest improvement with comparable sales for August trending slightly better than July.
Reworded paragraphs (32)
Previous wording
Certain statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect” or “anticipate” or the negatives thereof, variations thereon or similar terminology. The forward-looking statements contained in this Quarterly Report are generally located in the material set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but may be found in other locations as well, and include statements regarding our belief that the challenging macroeconomic and geopolitical environment is affecting consumer discretionary spending; our belief that our customer has been gravitating more towards lower priced goods and select promotions which we believe is signaling a consumer who is carefully choosing where and how he spends his money; our focus on bringing product to market that offers higher quality, lower price points and greater value; our belief that we are working to expand the core assortment in our private brands and refining our promotional strategy to prioritize relevance, competitiveness, and a stronger perception of value; our belief that because we own and design our private brand merchandise we are able to better control the margins than with our national designer brands; our belief that our actions will directly address ongoing consumer sector and macro challenges; our belief that our targeted promotions will drive greater incremental sales growth; our belief that the impact of current tariffs on our financial results for fiscal 2025 could be an increase of just under $4.0 million in the cost of inventory purchased; our belief that our broad and measured actions taken will ultimately improve our results and move the business forward; our go-forward approach that treats promotions like a managed category, with a clear and deliberate intent around timing, product focus, and purpose to drive sales, engagement, and brand equity; our believe that we are now better positioned to maximize the return on every markdown dollar, better aligned with strategic imperatives, and precisely target specific customer cohorts; our belief that reducing investment in underperforming national brands will drive higher profitability and enable us to leverage strategic promotions to fuel customer acquisition and sales growth; our belief that we can grow our private brand sales penetration from today’s 56.5% to greater than 60% in 2026 and to greater than 65% in 2027; our belief that we can drive greater customer loyalty and position our private brands as a primary reason customers choose DXL; our belief that our FiTMAP® technology will enhance customer engagement, attract new customers and…
Excerpt shortened here; the source contains the full paragraph.
Current wording
Certain statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect” or “anticipate” or the negatives thereof, variations thereon or similar terminology. The forward-looking statements contained in this Quarterly Report are generally located in the material set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but may be found in other locations as well, and include statements regarding our belief that the Merger with FullBeauty Brands will bring together complementary brands, channels and capabilities to better serve plus-size women and big + tall men; our belief that the combined company will have a more diverse and broader portfolio with one of the most comprehensive range of plus-size and big + tall options and will be well positioned for future growth opportunities; our expectation that the Merger with FullBeauty Brands will close in the first half of 2026; our belief that lack of traffic to our stores and direct business remains the primary reason for our sales shortfall; our belief that the overall weakness in the economy and consumer sentiment has resulted in a decrease in consumer spending and that decrease is affecting our business; our belief that our FiTMAP® technology uniquely positions us to help consumers respond to the positive effects of GLP-1 medications; our belief that our big and tall customer is not shopping as frequently or spending as much money with DXL as in prior years; our belief that there has been a discernable shift in our customers' preference towards entry level price points and private brands; our belief that our strategic initiatives will better position the Company’s return to growth; our belief that we can bring product to market that offers higher quality, lower price points and greater value; our belief that we can expand the core assortment in our private brands and refine our promotional strategy to prioritize relevance, competitiveness, and a stronger perception of value; our belief that reducing investment in underperforming national brands will drive higher profitability and enabling more strategic promotions; our belief that we can grow our private brand sales penetration from 57% at the start of fiscal 2025 to greater than 60% in 2026 and to greater than 65% in 2027; our expected expansion of FiTMAP® to an additional 100 stores by the end of the first half of fiscal 2026; our belief that we have reframed our promotional approach around a disciplined, strategic framework that prioritizes relevance, competitiveness, and a compelling value proposition; our belief that our promotions, that are now managed wit…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Numerous factors could cause our actual results to differ materially from such forward-looking statements. We encourage readers to refer to our filings with the SEC that set forth certain risks and uncertainties that may have an impact on future results and direction of our Company, including risks related to changes in consumer spending in response to economic factors, the impact of current tariffs, the impact of any further increases in tariffs, our ability to proactively react to the current and further potential changes in tariffs to minimize risk, our ability to grow our private brand; rising costs, high interest rates; the impact of ongoing worldwide conflicts on the global economy; and our ability to execute on our marketing, digital, store and collaboration strategies, ability to grow our market share, predict customer tastes and fashion trends, compete successfully in the United States men’s big + tall apparel market, and the other risks and uncertainties as set forth in the “Risk Factors” section in Part I, Item 1A of our Fiscal 2024 Annual Report.
Current wording
Numerous factors could cause our actual results to differ materially from such forward-looking statements. We encourage readers to refer to our filings with the SEC that set forth certain risks and uncertainties that may have an impact on future results and direction of our Company, including risks related to the Merger and combining our business with FullBeauty Brands, changes in consumer spending in response to economic factors, the impact of the government shutdown, the impact of current tariffs, the impact of any further increases in tariffs, our ability to proactively react to the current and further potential changes in tariffs to minimize risk, our ability to grow our private brand; rising costs, high interest rates; the impact of ongoing worldwide conflicts on the global economy; and our ability to execute on our marketing, digital, store and collaboration strategies, ability to grow our market share, predict customer tastes and fashion trends, compete successfully in the United States men’s big + tall apparel market, and the other risks and uncertainties as set forth in the “Risk Factors” section in Part I, Item 1A of our Fiscal 2024 Annual Report.
Previous wording
Destination XL Group, Inc., together with our consolidated subsidiaries (the “Company”), is the largest specialty retailer of big + tall men’s clothing with retail and direct operations in the United States. We operate under the trade names of Destination XL®, DXL®, DXL Outlets, Casual Male XL®and Casual Male XL Outlets. At August 2, 2025, we operated 257 Destination XL stores, 16 DXL outlet stores, 4 Casual Male XL retail stores, 17 Casual Male XL outlet stores and a digital business, including an e-commerce site atdxl.com and a mobile site, m.destinationXL.com, mobile app and third-party marketplaces.
Current wording
Destination XL Group, Inc., together with our consolidated subsidiaries (the “Company”), is the largest specialty retailer of big + tall men’s clothing with retail and direct operations in the United States. We operate under the trade names of Destination XL®, DXL®, DXL Outlets, Casual Male XL®and Casual Male XL Outlets. At November 1, 2025, we operated 258 Destination XL stores, 17 DXL outlet stores, 6 Casual Male XL retail stores, 15 Casual Male XL outlet stores and a digital business, including an e-commerce site atdxl.com and a mobile site, m.destinationXL.com, mobile app and third-party marketplaces.
Previous wording
Our second quarter results continue to reflect the challenging macroeconomic and geopolitical environment affecting consumer discretionary spending. Over the past year, our customer has been gravitating more towards lower priced goods and select promotions, signaling a consumer who is carefully choosing where and how he spends his money. In response to these challenges, and given our customers' shift to our private brands, we recognize and are focused on bringing product to market that offers higher quality, lower price points and greater value. As discussed below under Strategic Priorities, we are working to expand the core assortment in our private brands and refining our promotional strategy to prioritize relevance, competitiveness, and a stronger perception of value.
Current wording
Our big and tall customer is not shopping as frequently or spending as much money with DXL as in prior years. There has also been a discernable shift in his preference towards entry level price points and private brands. In response to these challenges, and given our customers' shift to our private brands, we recognize and are focused on bringing product to market that offers higher quality, lower price points and greater value. As discussed below under Strategic Priorities, we are working to expand the core assortment in our private brands and refining our promotional strategy to prioritize relevance, competitiveness, and a stronger perception of value.
Previous wording
As of August 2, 2025, we had cash and investments of $33.5 million as compared to $63.2 million at August 3, 2024 with no debt outstanding and unused excess availability of $70.1 million. The decrease in cash and investments from the second quarter of fiscal 2024, included the use of $13.6 million in the second half of fiscal 2024 to repurchase shares of common stock and $14.6 million on capital spent over the past 12 months for new store development. We continued to maintain our strong financial position, successfully managing our liquidity and our inventory level, which was up slightly by 0.4% compared to August 3, 2024, due to the acceleration of receipts in an effort to mitigate the impact of increased costs due to tariffs.
Current wording
As of November 1, 2025, we had cash and investments of $27.0 million as compared to $43.0 million at November 2, 2024 with no debt outstanding and unused excess availability under our credit facility of $73.6 million. The decrease in cash and investments at November 1, 2025 as compared to November 2, 2024 included $13.1 million of capital spent over the past 12 months for new store development and $3.3 million of shares repurchased during the fourth quarter of fiscal 2024. Since the beginning of fiscal 2023, we have opened 18 new DXL stores and converted 24 Casual Male XL retail and outlet stores to the DXL format, which we have been able to completely fund from our cash availability.
Previous wording
Over the course of the next two years, we will be strategically shifting our assortment to prioritize private brands, which deliver consistent fit and the flexibility to balance trend-right fashion with core essentials and stronger margins. To support this focus, we are reducing investment in underperforming national brands which will drive higher profitability and enable us to leverage strategic promotions to fuel customer acquisition and sales growth. Our intent is to grow private brand sales penetration from today’s 56.5% to greater than 60% in 2026 and to greater than 65% in 2027. We are confident that with the strength of our assortment, enhanced storytelling, and strategic marketing efforts, we can drive greater customer loyalty and position our private brands as a primary reason customers choose DXL.
Current wording
Over the course of the next two years, we are strategically shifting our assortment to prioritize private brands, which deliver consistent fit, the flexibility to balance trend-right fashion with core essentials and stronger margins. To support this focus, we are reducing investment in underperforming national brands, which will drive higher profitability and enable us to leverage strategic promotions to fuel customer acquisition and sales growth. Our intent is to grow private brand sales penetration from 57% at the start of fiscal 2025 to greater than 60% in 2026 and to greater than 65% in 2027. We are confident that with the strength of our assortment, enhanced storytelling, and strategic marketing efforts, we can drive greater customer loyalty and position our private brands as a primary reason customers choose DXL.
Previous wording
Over the past two years, we have been working with and testing a proprietary FiTMAP® Sizing Technology for which we have an exclusive license for Big + Tall men until 2030. This innovative, contactless, digital scanning technology captures 243 unique measurements and offers custom clothing options and a great fit for all our customers. FiTMAP offers a unique experience for our customers, whether selecting from our Ready-to-Wear clothing or opting for custom garments. We are able to provide recommended sizes in all of our private brands, as well as 15 of our national brands. We believe this technology will enhance customer engagement, attract new customers and establish DXL as a technology leader in men's big + tall apparel. To date, we have scanned over 23,000 customers. At the end of the second quarter of fiscal 2025, FiTMAP was in 62 DXL retail locations. Subsequent to the end of the second quarter, we opened another 24 stores in August, bringing us to 86 store locations leading into the fall season. We have a plan to further expand to as many as 200 stores by the end of fiscal 2027.
Current wording
Over the past three years, we have been working with and testing a proprietary FiTMAP® Sizing Technology for which we have an exclusive license for Big + Tall men until 2030. This innovative, contactless, digital scanning technology captures 243 unique measurements and offers custom clothing options and a great fit for all our customers. FiTMAP offers a unique experience for our customers, whether selecting from our Ready-to-Wear clothing or opting for custom garments. We are able to provide recommended sizes in all of our private brands, as well as 28 of our national brands. We believe this technology will enhance customer engagement, attract new customers and further establish DXL as a technology leader in men's big + tall apparel. To date, we have scanned over 30,000 customers. At the end of the third quarter of fiscal 2025, FiTMAP was in 88 DXL retail locations and as of the end of September 2025 the technology is available on our mobile app, providing our customers with the ability to self-scan. We plan to expand to another 100 stores in the first half of fiscal 2026.
Previous wording
We have reframed our promotional strategy around a more disciplined, strategic framework that prioritizes relevance, competitiveness, and a stronger perception of value. Our customer has been telling us that we need to create greater levels of value, and our go-forward approach treats promotions like a managed category, with a clear and deliberate intent around timing, product focus, and purpose to drive sales, engagement, and brand equity. We are now better positioned to maximize the return on every markdown dollar, better aligned with strategic imperatives, and precisely targeting specific customer cohorts.
Current wording
We have continued to reframe our promotional strategy around a more disciplined, strategic framework that prioritizes relevance, competitiveness, and a stronger perception of value. Our customer has been telling us that we need to create greater levels of value, and our go-forward approach treats promotions like a managed category, with a clear and deliberate intent around timing, product focus, and purpose to drive sales, engagement, and brand equity. We continue to drive our positioning to maximize the return on every markdown dollar, better align with strategic imperatives, and precisely target specific customer cohorts.
Previous wording
The following table presents sales by segment for the three months ended August 2, 2025 and August 3, 2024:
Current wording
The following table presents sales by segment for the three and nine months ended November 1, 2025 and November 2, 2024:
Previous wording
Total sales for the second quarter of fiscal 2025 were $115.5 million, as compared to $124.8 million in the second quarter of fiscal 2024. The decrease in total sales was primarily attributable to a decrease in comparable sales for the second quarter of 9.2%, partially offset by an increase in non-comparable sales. Sales trends improved month over month, with comparable sales down 10.4% in May, down 9.6% in June, and down 7.0% in July. Comparable sales performance during the second quarter was similar to our first quarter performance, as our customers continued to pull back on discretionary spending and shifted purchases towards our private brand merchandise and value-driven brands.
Current wording
Total sales for the third quarter of fiscal 2025 were $101.9 million, as compared to $107.5 million in the third quarter of fiscal 2024. The decrease in total sales was primarily attributable to a decrease in comparable sales for the third quarter of 7.4%, partially offset by an increase in non-comparable sales from new stores. Comparable sales were down 6.7% in August, down 9.3% in September, and down 5.8% in October, which was a slight improvement from the first half of fiscal 2025.
Previous wording
The second quarter comparable sales decrease of 9.2% consisted of a comparable sales decrease of 7.1% from stores and a comparable sales decrease of 14.4% from our direct business. The decrease in traffic continued to be the primary driver for the decrease in comparable sales. While our conversion rate was slightly up, our dollars per transaction were down, partly due to the shift in product mix toward more value-driven merchandise.
Current wording
The third quarter comparable sales decrease of 7.4% consisted of a comparable sales decrease of 5.2% from stores and a comparable sales decrease of 13.1% from our direct business. A decrease in traffic continued to be the primary driver for the decrease in comparable sales. While conversion rate was up slightly, our dollars per transaction were down, partly due to the shift in product mix toward more value-driven merchandise, as our customers continue to be price sensitive due to reduced discretionary spending.
Previous wording
For the first six months of fiscal 2025, total sales of $221.0 million decreased 8.0% as compared to $240.3 million for the first six months of fiscal 2024. The decrease was primarily driven by a decrease in comparable sales of 9.3%, with stores down 6.8% and our direct business down 15.3%.
Current wording
For the first nine months of fiscal 2025, total sales of $322.9 million decreased 7.2% as compared to $347.8 million for the first nine months of fiscal 2024. The decrease was primarily driven by a decrease in comparable sales of 8.7%, with stores down 6.3% and our direct business down 14.6%.
Previous wording
For the second quarter of fiscal 2025, our gross margin rate, inclusive of occupancy costs, was 45.2% as compared to a gross margin rate of 48.2% for the second quarter of fiscal 2024.
Current wording
For the third quarter of fiscal 2025, our gross margin rate, inclusive of occupancy costs, was 42.7% as compared to a gross margin rate of 45.1% for the third quarter of fiscal 2024.
Previous wording
Our gross margin rate decreased by 300 basis points, which was driven by an increase of 240 basis points in occupancy costs, as a percentage of sales, due to the deleveraging from lower sales and increased rents from new stores and lease extensions. Merchandise margin for the second quarter decreased by 60 basis points, as compared to the second quarter of fiscal 2024, primarily due to an increase in freight costs associated with the acceleration of inventory receipts in advance of certain tariffs and markdown activity and promotional offers associated with our new marketing initiatives. These increases were partially offset by an increase in merchandise margins as a result of a shift in product mix toward our private brand merchandise.
Current wording
The decrease of 240 basis points for the third quarter of fiscal 2025 was primarily driven by an increase of 210 basis points in occupancy costs, as a percentage of sales, due to the deleveraging from lower sales and increased rents from new stores and lease extensions. Merchandise margin for the third quarter decreased by 30 basis points, as compared to the third quarter of fiscal 2024, primarily due to the impact of tariffs and increased markdown activity and promotional offers associated with our marketing initiatives. These increased costs were partially offset by an improvement in merchandise margins as a result of a shift in product mix toward our private brand merchandise.
Previous wording
For the first six months of fiscal 2025, our gross margin rate, inclusive of occupancy costs, was 45.1% as compared to a gross margin rate of 48.2% for the first six months of fiscal 2024. The decrease of 310-basis points was due to an increase of 260-basis points in occupancy costs due to the deleveraging of sales and increased rents and a 50 basis point decrease in merchandise margin. The decrease in merchandise margin was due to an increase in freight costs associated with the acceleration of inventory receipts partially offset by an increase in merchandise margins as a result of a shift in product mix.
Current wording
For the first nine months of fiscal 2025, our gross margin rate, inclusive of occupancy costs, was 44.4% as compared to a gross margin rate of 47.2% for the first nine months of fiscal 2024. The decrease of 280-basis points was due to an increase of 240-basis points in occupancy costs due to the deleveraging of sales and increased rents and a 40 basis point decrease in merchandise margin. Similar to the third quarter, the decrease in merchandise margin was due to the impact of tariffs and increased markdown activity and promotional offers associated with our new marketing initiatives, partially offset by an improvement in merchandise margins as a result of a shift in product mix toward our private brand merchandise.
Previous wording
As discussed above, there remains significant uncertainty with respect to evolving trade policies and the enactment of additional tariffs globally. However, if currently enacted rates remain in effect throughout the remainder of the fiscal year, and no new tariffs are added, we estimate that the impact of tariffs on fiscal 2025 receipts will be just under $4.0 million, which will be recognized through our financial results as inventory turns. Through the first six months of fiscal 2025, the impact of tariffs on merchandise margins was estimated to be approximately 10 basis points as a percentage of sales.
Current wording
As discussed above, there remains significant uncertainty with respect to evolving trade policies and the enactment of additional tariffs globally. For the third quarter and first nine months of fiscal 2025, the impact of tariffs on merchandise margins was estimated to be approximately 60 basis points and 25 basis points, as a percentage of sales, respectively. Assuming the currently enacted rates remain in effect throughout the remainder of the fiscal year and no new tariffs are added, we estimate that the impact of tariffs on gross margin for fiscal 2025 will be approximately $2.0 million.
Previous wording
As a percentage of sales, selling, general and administrative ("SG&A") expenses for the second quarter of fiscal 2025 were 41.2% as compared to 43.0% for the second quarter of fiscal 2024. For the first six months of fiscal 2025, SG&A expenses, as a percentage of sales, were 43.0% as compared to 42.1% for the first six months of fiscal 2024.
Current wording
As a percentage of sales, selling, general and administrative ("SG&A") expenses for the third quarter of fiscal 2025 were 44.7% as compared to 44.1% for the third quarter of fiscal 2024. For the first nine months of fiscal 2025, SG&A expenses, as a percentage of sales, were 43.5% as compared to 42.7% for the first nine months of fiscal 2024.
Previous wording
On a dollar basis, SG&A expenses decreased by $6.1 million for both the second quarter and first six months of fiscal 2025. The decrease in both periods primarily was due to a decrease in marketing and incentive-based compensation, partially offset by an increase in healthcare benefit costs. For the first six months of fiscal 2025, on a percentage of sales basis, SG&A expenses increased due to the decrease in sales as compared to the first six months of fiscal 2024.
Current wording
On a dollar basis, SG&A expenses decreased by $1.9 million for the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024. The decrease was primarily due to a decrease in supporting payroll costs and incentive-based compensation. For the first nine months of fiscal 2025, SG&A expenses decreased $8.1 million as compared to the first nine months of fiscal 2024 primarily due to a decrease in marketing, supporting payroll and incentive-based compensation.
Previous wording
Marketing costs were 6.1% of sales for the second quarter of fiscal 2025 as compared to 8.8% of sales for the second quarter of fiscal 2024, with the decrease primarily attributable to the brand campaign in the second quarter of fiscal 2024. For the first six months of fiscal 2025, marketing costs were 6.1% of sales as compared to 7.6% of sales for the first six months of fiscal 2024. For fiscal 2025, marketing costs are expected to be approximately 5.9% of sales.
Current wording
Marketing costs were 6.0% of sales for the third quarter of fiscal 2025 as compared to 5.7% of sales for the third quarter of fiscal 2024. For the first nine months of fiscal 2025, marketing costs were 6.1% of sales as compared to 7.0% of sales for the first nine months of fiscal 2024. For fiscal 2025, marketing costs are expected to be approximately 6.0% of sales.
Previous wording
Management views SG&A expenses through two primary cost centers: Customer Facing Costs and Corporate Support Costs. Customer Facing Costs, which include store payroll, marketing and other store and direct operating costs, represented 24.6% of sales for the first six months of fiscal 2025 as compared to 24.2% of sales for the first six months of fiscal 2024. Corporate Support Costs, which include the distribution center and corporate overhead costs, represented 18.4% of sales for the first six months of fiscal 2025 as compared to 17.9% of sales for the first six months of fiscal 2024.
Current wording
Management views SG&A expenses through two primary cost centers: Customer Facing Costs and Corporate Support Costs. Customer Facing Costs, which include store payroll, marketing and other store and direct operating costs, represented 24.8% of sales for the first nine months of fiscal 2025 as compared to 24.2% of sales for the first nine months of fiscal 2024. Corporate Support Costs, which include the distribution center and corporate overhead costs, represented 18.7% of sales for the first nine months of fiscal 2025 as compared to 18.5% of sales for the first nine months of fiscal 2024.
Previous wording
Depreciation and amortization for the second quarter of fiscal 2025 increased to $3.9 million as compared to $3.4 million for the second quarter of fiscal 2024. For the first six months of fiscal 2025, depreciation and amortization was $7.5 million as compared to $6.7 million for the first six months of fiscal 2024. The increase in depreciation and amortization in fiscal 2025 is due to the opening of new store locations and investments in certain other infrastructure and technology projects.
Current wording
Depreciation and amortization for the third quarter of fiscal 2025 increased to $3.8 million as compared to $3.6 million for the third quarter of fiscal 2024. For the first nine months of fiscal 2025, depreciation and amortization was $11.3 million as compared to $10.2 million for the first nine months of fiscal 2024. The increase in depreciation and amortization in fiscal 2025 is due to the opening of new store locations and investments in certain other infrastructure and technology projects.
Previous wording
Net interest income for the second quarter of fiscal 2025 was $0.2 million as compared to $0.6 million for the second quarter of fiscal 2024. For the first six months of fiscal 2025, net interest income was $0.5 million as compared to $1.1 million for the first six months of fiscal 2024. The decrease in interest income for the second quarter and first six months of fiscal 2025 was primarily due to the decrease in the average balance of investments as compared to the second quarter and first six months of fiscal 2024.
Current wording
Net interest income for the third quarter of fiscal 2025 was $0.1 million as compared to $0.6 million for the third quarter of fiscal 2024. For the first nine months of fiscal 2025, net interest income was $0.6 million as compared to $1.7 million for the first nine months of fiscal 2024. The decrease in interest income for the third quarter and first nine months of fiscal 2025 was primarily due to the decrease in the average balance of investments as compared to the third quarter and first nine months of fiscal 2024.
Previous wording
For the first six months of fiscal 2025 and 2024, the Company’s effective tax rate was 4.6% and 32.3%, respectively. The effective tax rate for the first six months of fiscal 2025 reflects an annual effective tax rate estimate of 6.9% net of discrete items and the impact of permanent book-to-tax differences. On an annual basis, while in dollars these permanent book-to-tax differences are down, the impact as a percentage of our estimated annual pretax earnings is greater.
Current wording
For the first nine months of fiscal 2025 and 2024, the Company’s effective tax rate was 19.8% and 38.8%, respectively. The effective tax rate for the first nine months of fiscal 2025 reflects an annual effective tax rate estimate of 18.3% net of discrete items and the impact of permanent book-to-tax differences as well as the impact of adjustments to our net operating losses reflected in our recently filed tax returns.
Previous wording
For the second quarter of fiscal 2025, we recorded a net loss of $(0.3) million, or $0.00 per diluted share, as compared to net income of $2.4 million, or $0.04 per diluted share, for the second quarter of fiscal 2024. For the first six months of fiscal 2025, the net loss was $(2.2) million, or $(0.04) per diluted share, as compared to net income of $6.2 million, or $0.10 per diluted share, for the first six months of fiscal 2024. The decrease in earnings for the second quarter and first six months of fiscal 2025 was driven primarily by the decrease in sales.
Current wording
For the third quarter of fiscal 2025, we recorded a net loss of $(4.1) million, or $(0.08) per diluted share, as compared to a net loss of $(1.8) million, or $(0.03) per diluted share, for the third quarter of fiscal 2024. For the first nine months of fiscal 2025, the net loss was $(6.3) million, or $(0.12) per diluted share, as compared to net income of $4.4 million, or $0.07 per diluted share, for the first nine months of fiscal 2024. The decrease in earnings for the third quarter and first nine months of fiscal 2025 was driven primarily by the decrease in sales.
Previous wording
As of August 2, 2025, our inventory increased by $0.3 million to $78.9 million, as compared to $78.6 million at August 3, 2024. We continue to take proactive measures to manage our inventory and adjust our receipt plan given the ongoing macroeconomic factors affecting consumer spending while, at the same time, accelerating certain receipts to avoid the impact of potential tariffs. At August 2, 2025, our clearance inventory was 10.2% of our total inventory, as compared to 10.4% at August 3, 2024. Our inventory position is very strong and our clearance levels are in line with our benchmark of 10%. Our inventory turnover rate has improved by over 30% from fiscal 2019.
Current wording
As of November 1, 2025, our inventory decreased by $4.1 million to $85.0 million, as compared to $89.1 million at November 2, 2024. We continue to take proactive measures to manage our inventory and adjust our receipt plan given the ongoing macroeconomic factors affecting consumer spending, while at the same time, accelerating certain receipts to minimize the impact of tariffs. At November 1, 2025, our clearance inventory was 10.0% of our total inventory, as compared to 9.2% at November 2, 2024. Our inventory position is very strong and our clearance levels are in line with our benchmark of 10%. Our inventory turnover rate has improved by over 30% from fiscal 2019.
Previous wording
Our primary sources of liquidity are our cash and cash equivalents, short-term investments, cash generated from operations and availability under our credit facility, which is discussed below. At August 2, 2025, we had no outstanding debt, including no borrowings under our credit facility during the first six months of fiscal 2025. Cash that is in excess of our forecasted needs may be invested in money market accounts and U.S. government-backed securities.
Current wording
Our primary sources of liquidity are our cash and cash equivalents, short-term investments, cash generated from operations and availability under our credit facility, which is discussed below. At November 1, 2025, we had no outstanding debt, including no borrowings under our credit facility during the first nine months of fiscal 2025. Cash that is in excess of our forecasted needs may be invested in money market accounts and U.S. government-backed securities.
Previous wording
For the first six months of fiscal 2025, cash flow from operations was $(2.1) million as compared to $16.0 million for the first six months of fiscal 2024. The decrease in cash flow from operations was primarily due to a decrease in earnings and the timing of payables associated partly with the acceleration of inventory receipts during the first six months of fiscal 2025 and the timing of other working capital.
Current wording
For the first nine months of fiscal 2025, cash flow from operations was $(3.2) million as compared to $12.5 million for the first nine months of fiscal 2024. The decrease in cash flow from operations was primarily due to a decrease in earnings as well as the timing of working capital.
Previous wording
Free cash flow, before capital expenditures for store development, a non-GAAP measure, was $(7.6) million for the first six months of fiscal 2025 as compared to $8.4 million for the first six months of fiscal 2024. Free cash flow, a non-GAAP measure, was $(14.2) million for the first six months of fiscal 2025 as compared to $3.2 million for the first six months of fiscal 2024.
Current wording
Free cash flow, before capital expenditures for store development, a non-GAAP measure, was $(10.9) million for the first nine months of fiscal 2025 as compared to $2.5 million for the first nine months of fiscal 2024. Free cash flow, a non-GAAP measure, was $(20.2) million for the first nine months of fiscal 2025 as compared to $(7.0) million for the first nine months of fiscal 2024.
Previous wording
Cash flow provided by investing activities was $4.4 million as compared to cash flow used for investing activities of $(21.9) million for the first six months of fiscal 2024. The increase in cash flow provided by investing activities of $26.3 million was primarily due to the maturity of short-term investments and a decrease in the amount of short-term investments purchased.
Current wording
Cash flow provided by investing activities was $6.5 million as compared to cash flow used for investing activities of $(22.5) million for the first nine months of fiscal 2024. The increase in cash flow provided by investing activities of $29.0 million was primarily due to the maturity of short-term investments and a decrease in the amount of short-term investments purchased.
Previous wording
We have a $125.0 million revolving credit agreement with Citizens Bank, N.A., with a maturity date of October 28, 2026 (the "Credit Facility"). On August 13, 2025, subsequent to the end of the second quarter of fiscal 2025, the Credit Facility was amended by entering into the Second Amendment to Credit Facility. As a result of the amendment, the maturity date was extended to August 13, 2030 and the revolving commitments under the facility were reduced from $125.0 million to $100.0 million, to more closely align with our average inventory levels, which serve as the primary borrowing base for the Credit Facility. In addition, the sublimit for swing-line loans was reduced from $15.0 million to $10.0 million. The Credit Facility continues to include a sublimit of $20.0 million for commercial and standby letters of credit. Our availability under the Credit Facility did not materially change as a result of the amendment.
Current wording
During the third quarter of fiscal 2025, we amended our revolving credit agreement with Citizens Bank, N.A., by entering into the Second Amendment to Credit Facility (as amended, the "Credit Facility"). As a result of the amendment, the maturity date of the Credit Facility was extended from October 28, 2026 to August 13, 2030 and the revolving commitments under the facility were reduced from $125.0 million to $100.0 million, to more closely align with our average inventory levels, which serve as the primary borrowing base for the Credit Facility. In addition, the sublimit for swing-line loans was reduced from $15.0 million to $10.0 million. The Credit Facility continues to include a sublimit of $20.0 million for commercial and standby letters of credit. Our availability under the Credit Facility did not materially change as a result of the amendment.
Previous wording
We had no outstanding borrowings under the Credit Facility at August 2, 2025 and no borrowings during the first six months of fiscal 2025. At August 2, 2025, outstanding standby letters of credit were $4.2 million. The average unused excess availability during the first six months of fiscal 2025 was approximately $71.8 million and the unused excess availability at August 2, 2025 was $70.1 million.
Current wording
We had no outstanding borrowings under the Credit Facility at November 1, 2025 and no borrowings during the first nine months of fiscal 2025. At November 1, 2025, outstanding standby letters of credit were $3.6 million. The average unused excess availability during the first nine months of fiscal 2025 was approximately $71.1 million and the unused excess availability at November 1, 2025 was $73.6 million.
Previous wording
During the first six months of fiscal 2025, we opened six new DXL stores, converted three Casual Male XL retail stores and one Casual Male XL outlet to DXL retail stores and one Casual Male XL outlet to a DXL outlet. We expect to open two additional DXL stores during fiscal 2025 and expect our capital expenditures to range from $17.0 million to $19.0 million, net of tenant incentives.
Current wording
During the first nine months of fiscal 2025, we opened eight new DXL stores, converted two Casual Male XL retail stores and one Casual Male XL outlet to DXL retail stores and two Casual Male XL outlets to DXL outlets. We expect our capital expenditures to range from $17.0 million to $19.0 million, net of tenant incentives.