Duluth Holdings narrows Q3 loss, improves margins and liquidity despite soft sales

Duluth Holdings (NASDAQ:DLTH) reported a significantly narrower third-quarter fiscal 2025 loss as the apparel retailer improved margins, tightened inventory, and strengthened liquidity despite a continued decline in sales.

For the quarter ended November 2, 2025, Duluth posted a net loss of $10.1 million, compared with $28.2 million a year earlier.

Adjusted EBITDA improved by $5.5 million to –$0.7 million, prompting the company to reaffirm the upper end of its full-year adjusted EBITDA guidance of $23 million to $25 million.

Net sales came in at $114.9 million, down 9.6% year over year as Duluth continued to face softer demand and a more promotional retail environment.

However, gross margin improved sharply to 53.8%, despite a $3 million tariff impact, reflecting better merchandise mix, disciplined pricing, and reduced markdown pressure.

Elsewhere, Duluth continued to focus on working-capital efficiency, cutting inventories by 17%, or $39.2 million, year over year.

Cash and cash equivalents stood at $8.2 million, and the company reported net liquidity of $88.6 million, signaling improved financial flexibility heading into fiscal year-end.

The retailer said ongoing efforts to optimize operations and streamline assortments are gaining traction, positioning Duluth for improved profitability even as top-line trends remain challenging.