Specialty retailer Destination XL Group recently released its financial results for the fourth quarter and fiscal 2023, setting the stage for a year focused on ambitious strategic growth initiatives within the men's big and tall market segment. In the 14-week fourth quarter of fiscal 2023, the company reported total sales of $137.1 million, a slight decrease from the previous year's $143.9 million in the 13-week period. This decline was attributed to a 10.1 percent drop in comparable sales, with store sales down 9.4 percent and direct business declining by 11.3 percent.
For the full fiscal year, Destination XL Group saw a 4.4 percent decrease in sales, totaling $521.8 million, with comparable sales down 4.6 percent. Store sales were down 4.5 percent, and direct business experienced a 4.8 percent decrease. The company cited a gradual slowdown in store traffic nationwide, influenced by inflationary pressures impacting consumer spending.
Gross margin for the fourth quarter was reported at 47 percent, slightly lower than the previous year's 47.7 percent. For the full year, the margin decreased from 49.9 percent to 48.4 percent. Selling, general, and administrative expenses as a percentage of sales increased to 38.5 percent for the fourth quarter and 37.7 percent for the year.
Net income for the fourth quarter dropped to $5.2 million, or eight cents per diluted share, from $8.3 million, or 13 cents per diluted share. Annual net income decreased to $27.9 million from $89.1 million. Adjusted EBITDA for the fourth quarter and fiscal year stood at $11.7 million and $55.9 million, respectively.
Despite the declines, President and CEO Harvey Kanter expressed optimism, highlighting that fiscal 2023 sales and adjusted EBITDA were the second and third highest in the company's history. Looking ahead, Kanter outlined plans to launch growth initiatives in marketing, store expansion, digital experience enhancement, and collaborations, with investments set to begin in late spring.
Destination XL Group aims to achieve significant top-line growth over the next five years, targeting a return to double-digit adjusted EBITDA margins. For fiscal 2024, the company forecasts sales between $500 million and $530 million, with a net income of $17 million and an adjusted EBITDA of $36 million.
