Destination XL Stock Rises Before Q3 Earnings: Retail’s Cautious

Shares of specialty retailer Destination XL Group Inc. ($DXLG) were up nearly 4.2% on Thursday afternoon ahead of its third-quarter earnings, but retail sentiment stayed cautious.

Wall Street analysts expect the company to report earnings per share (EPS) of $0.03 on revenue of $113.7 million, according to Stocktwits data. The company has missed its earnings estimates twice in the past year.

For its most recent reported quarter, Destination revenues declined 3.2% year-over-year (YoY) to $140 million. Its non-GAAP diluted EPS came in at $1.99, up 21% from the previous period.
Its second quarter comparable sales decrease of 1.4% was in line with its expectations, according to a company statement.

Retail sentiment on the stock fell to ‘neutral’  (46/100) from ‘extremely bullish’ (93/100) a day ago. Message volumes continued to be at ‘high’ levels.

DXLG sentiment and message volumes on Nov 21 as of 1:17 pm ET

“Despite achieving our quarterly forecast, our consumer is battling ongoing, adverse economic headwinds, and we are trimming our financial outlook for the remainder of the year,” Harvey Kanter, president and CEO, said in a statement at the time. “We now expect our sales to range from $535.0 million to $545.0 million with an adjusted EBITDA margin of 11.0% to 12.0%.”

Following the last earnings, brokerage DA Davidson lowered the firm's price target to $4 from $6 but kept a ‘Buy’ rating. It cited lower traffic and online conversion as economic uncertainty led to shopping decline, The Fly.com reported.  

DXLG stock is down 39.8% year-to-date.