Destination XL Group shifts focus to private brands as it swings to loss in Q2

Destination XL Group (DXL) has said its results for the second quarter of the year reflect a “softness” in the big and tall sector, as the company swings to a loss and total sales drop.

The specialty retailer reported a net sales decline of 7.5 percent to 115.5 million dollars, decreasing on the 124.8 million dollars seen in the same period of year prior. Comparable sales decreased 9.2 percent year-over-year.

The group swung to a net loss of 0.3 million dollars, compared to a net income of 2.4 million dollars last year. Its adjusted EBITDA also dropped from 6.5 million dollars to 4.6 million dollars.

In a statement, president and CEO, Harvey Kanter, said that while DXL “continues to act with agility to address shifts in consumer behaviour”, waning demand, macroeconomic challenges and the geopolitical environment have continued to weigh on consumer spending.

“Over the past year, our customers have been gravitating more towards lower priced goods and select promotions, signaling a consumer who is carefully choosing where and how he spends his money,” Kanter added.

DXL to reduce investments in underperforming national brands

With this in mind, DXL is planning to prioritise its private brands category over the coming two years, thus reducing investment in underperforming national brands in an attempt to drive higher profitability and leverage strategic promotions.

“Our intent is to grow private brand sales penetration from today’s 56.5 percent to greater than 60 percent in 2026 and to greater than 65 percent in 2027,” DXL said.

Kanter also expressed caution over tariffs, though noted that DXL was taking action to directly address these ongoing consumer sector and macro challenges.

He continued: “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. While there are a number of moving parts, and further uncertainty ahead, we believe our broad and measured actions taken will ultimately improve our results and move the business forward.”