Destination XL Group Beats on EPS But GAAP Results Lag

Destination XL Group (Nasdaq: DXLG  ) reported earnings on May 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 4 (Q1), Destination XL Group missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly. Non-GAAP earnings per share was unchanged. GAAP earnings per share contracted significantly.

Margins dropped across the board.

Revenue details
Destination XL Group booked revenue of $93.6 million. The two analysts polled by S&P Capital IQ looked for sales of $99.2 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.05. The two earnings estimates compiled by S&P Capital IQ averaged $0.01 per share. Non-GAAP EPS of $0.05 were the same as the prior-year quarter. GAAP EPS of $0.02 for Q1 were 60% lower than the prior-year quarter's $0.05 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 47.5%, 20 basis points worse than the prior-year quarter. Operating margin was 2.1%, 200 basis points worse than the prior-year quarter. Net margin was 1.1%, 130 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $103.7 million. On the bottom line, the average EPS estimate is $0.02.

Next year's average estimate for revenue is $418.1 million. The average EPS estimate is $0.01.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 73 members out of 102 rating the stock outperform, and 29 members rating it underperform. Among 30 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 21 give Destination XL Group a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Destination XL Group is buy, with an average price target of $8.00.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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