10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________

FORM 10-Q

_________________________________________

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2023

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______ 

Commission File Number 001-37641

_________________________________________ 

DULUTH HOLDINGS INC.

(Exact name of registrant as specified in its charter)

 _________________________________________

	99
Wisconsin	39-1564801
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
201 East Front Street Mount Horeb, Wisconsin	53572
(Address of principal executive offices)	(Zip Code)

(608) 424-1544

(Registrant’s telephone number, including area code)

_________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class B Common Stock, No Par Value	DLTH	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	o	Accelerated Filer	þ
Non-accelerated Filer	o	Smaller Reporting Company	þ
		Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  þ

The number of shares outstanding of the Registrant’s Class A common stock, no par value, as of May 31, 2023, was 3,364,200.

The number of shares outstanding of the Registrant’s Class B common stock, no par value, as of May 31, 2023, was 31,194,828.

DULUTH HOLDINGS INC.

QUARTERLY REPORT ON FORM 10-Q

FOR QUARTER ENDED April 30, 2023

INDEX

	Part I—Financial Information	Page
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of April 30, 2023 and January 30, 2022 (Unaudited)	3
	Condensed Consolidated Statements of Operations for the three months ended April 30, 2023 and May 1, 2022 (Unaudited)	5
	Condensed Consolidated Statements of Comprehensive (Loss) Income for the three months ended April 30, 2023 and May 1, 2022 (Unaudited)	6
	Condensed Consolidated Statement of Shareholders’ Equity for the three months ended April 30, 2023 (Unaudited)	7
	Condensed Consolidated Statement of Shareholders’ Equity for the three months ended May 1, 2022 (Unaudited)	8
	Condensed Consolidated Statements of Cash Flows for the three months ended April 30, 2023 and May 1, 2022 (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
	Part II—Other Information
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 6.	Exhibits	29
Signatures		30

 
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2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DULUTH HOLDINGS INC.

Condensed Consolidated Balance Sheets - Assets

(Unaudited)

(Amounts in thousands)

	April 30, 2023		January 29, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	9,210	$	45,548
Receivables		6,437		6,041
Inventory, less reserves of $1,929 and $1,837, respectively		144,969		154,922
Prepaid expenses & other current assets		15,918		15,154
Total current assets		176,534		221,665
Property and equipment, net		122,812		112,564
Operating lease right-of-use assets		128,436		131,753
Finance lease right-of-use assets, net		46,474		47,206
Available-for-sale security		5,416		5,539
Other assets, net		8,591		8,727
Deferred tax assets		136		—
Total assets	$	488,399	$	527,454

The accompanying notes are an integral part of these condensed consolidated financial statements.

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3

DULUTH HOLDINGS INC.

Condensed Consolidated Balance Sheets – Liabilities and Shareholders’ Equity

(Unaudited)

(Amounts in thousands)

	April 30, 2023		January 29, 2023
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable	$	36,123	$	56,547
Accrued expenses and other current liabilities		30,921		40,815
Income taxes payable		1,423		1,761
Current portion of operating lease liabilities		15,713		15,571
Current portion of finance lease liabilities		2,885		2,842
Current maturities of TRI long-term debt		787		768
Total current liabilities		87,852		118,304
Operating lease liabilities, less current maturities		114,019		117,366
Finance lease liabilities, less current maturities		36,688		37,425
TRI long-term debt, less current maturities		25,726		25,913
Deferred tax liabilities		—		1,249
Total liabilities		264,285		300,257
Shareholders' equity:
Preferred stock, no par value; 10,000 shares authorized; no shares    issued or outstanding as of April 30, 2023 and January 29, 2023		—		—
Common stock (Class A), no par value; 10,000 shares authorized;    3,364 shares issued and outstanding as of April 30, 2023 and January 29, 2023		—		—
Common stock (Class B), no par value; 200,000 shares authorized;    31,264 shares issued and 31,110 shares outstanding as of April 30, 2023, 30,191 shares issued and 30,079 shares outstanding as of January 29, 2023		—		—
Treasury stock, at cost; 154 and 112 shares as of April 30, 2023 and    January 29, 2023, respectively		(1,732)		(1,459)
Capital stock		99,968		98,842
Retained earnings		129,303		133,172
Accumulated other comprehensive income		(207)		(148)
Total shareholders' equity of Duluth Holdings Inc.		227,332		230,407
Noncontrolling interest		(3,218)		(3,210)
Total shareholders' equity		224,114		227,197
Total liabilities and shareholders' equity	$	488,399	$	527,454

The accompanying notes are an integral part of these condensed consolidated financial statements.

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4

DULUTH HOLDINGS INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except per share figures)

	Three Months Ended
	April 30, 2023		May 1, 2022
Net sales	$	123,759	$	122,904
Cost of goods sold (excluding depreciation and amortization)		58,108		55,841
Gross profit		65,651		67,063
Selling, general and administrative expenses		70,200		67,994
Operating loss		(4,549)		(931)
Interest expense		934		876
Other income, net		148		46
Loss before income taxes		(5,335)		(1,761)
Income tax benefit		(1,458)		(438)
Net loss		(3,877)		(1,323)
Less: Net loss attributable to noncontrolling interest		(8)		(29)
Net loss attributable to controlling interest	$	(3,869)	$	(1,294)
Basic earnings per share (Class A and Class B):
Weighted average shares of common stock outstanding		32,865		32,714
Net loss per share attributable to controlling interest	$	(0.12)	$	(0.04)
Diluted earnings per share (Class A and Class B):
Weighted average shares and equivalents outstanding		32,865		32,714
Net loss per share attributable to controlling interest	$	(0.12)	$	(0.04)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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5

DULUTH HOLDINGS INC.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

(Amounts in thousands)

	Three Months Ended
	April 30, 2023		May 1, 2022
Net loss	$	(3,877)	$	(1,323)
Other comprehensive income
Securities available-for sale:
Unrealized security loss arising during the period		(79)		(449)
Income tax benefit		(20)		(113)
Other comprehensive loss		(59)		(336)
Comprehensive loss		(3,936)		(1,659)
Comprehensive loss attributable to noncontrolling interest		(8)		(29)
Comprehensive loss attributable ‎to controlling interest	$	(3,928)	$	(1,630)

The accompanying notes are an integral part of these condensed consolidated financial statements.

 
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6

DULUTH HOLDINGS INC.

Condensed Consolidated Statement of Shareholders’ Equity

(Unaudited)

(Amounts in thousands)

	Three Months Ended April 30, 2023
								Accumulated		Noncontrolling
	Capital stock							other		interest in		Total
				Treasury		Retained		comprehensive		variable interest		shareholders'
	Shares	Amount		stock		earnings		income (loss)		entity		equity
Balance at January 29, 2023	33,443	$	98,842	$	(1,459)	$	133,172	$	(148)	$	(3,210)	$	227,197
Issuance of common stock	1,081		136		—		—		—		—		136
Stock-based compensation	—		990		—		—		—		—		990
Restricted stock forfeitures	(9)		—		—		—		—		—		—
Restricted stock surrendered for taxes	(41)		—		(273)		—		—		—		(273)
Other comprehensive loss	—		—		—		—		(59)		—		(59)
Net loss	—		—		—		(3,869)		—		(8)		(3,877)
Balance at April 30, 2023	34,474	$	99,968	$	(1,732)	$	129,303	$	(207)	$	(3,218)	$	224,114

The accompanying notes are an integral part of these condensed consolidated financial statements.

 
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7

DULUTH HOLDINGS INC.

Condensed Consolidated Statement of Shareholders’ Equity

(Unaudited)

(Amounts in thousands)

	Three Months Ended May 1, 2022
								Accumulated		Noncontrolling
	Capital stock							other		interest in		Total
				Treasury		Retained		comprehensive		variable interest		shareholders'
	Shares	Amount		stock		earnings		income		entity		equity
Balance at January 30, 2022	33,071	$	95,515	$	(1,002)	$	130,868	$	489	$	(3,152)	$	222,718
Issuance of common stock	292		166		—		—		—		—		166
Stock-based compensation	—		618		—		—		—		—		618
Restricted stock forfeitures	(1)		—		—		—		—		—		—
Restricted stock surrendered for taxes	(33)		—		(455)		—		—		—		(455)
Other comprehensive income	—		—		—		—		(336)		—		(336)
Net loss	—		—		—		(1,294)		—		(29)		(1,323)
Balance at May 1, 2022	33,329	$	96,299	$	(1,457)	$	129,574	$	153	$	(3,181)	$	221,388

The accompanying notes are an integral part of these condensed consolidated financial statements.

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8

DULUTH HOLDINGS INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)

	Three Months Ended
	April 30, 2023		May 1, 2022
Cash flows from operating activities:
Net loss	$	(3,877)	$	(1,323)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		7,413		7,520
Stock based compensation		990		618
Deferred income taxes		(1,365)		37
Loss on disposal of property and equipment		—		26
Changes in operating assets and liabilities:
Receivables		(396)		358
Inventory		9,953		(29,572)
Prepaid expense & other current assets		84		746
Software hosting implementation costs, net		(746)		(1,007)
Deferred catalog costs		—		10
Trade accounts payable		(21,080)		10,362
Income taxes payable		(338)		(2,032)
Accrued expenses and deferred rent obligations		(4,475)		(17,500)
Other assets		(17)		(11)
Noncash lease impacts		(119)		51
Net cash used in operating activities		(13,973)		(31,717)
Cash flows from investing activities:
Purchases of property and equipment		(21,392)		(3,885)
Principal receipts from available-for-sale security		44		39
Proceeds from disposals		—		3
Net cash used in investing activities		(21,348)		(3,843)
Cash flows from financing activities:
Proceeds from line of credit		10,000		—
Payments on line of credit		(10,000)		—
Payments on TRI long term debt		(186)		(168)
Payments on finance lease obligations		(694)		(664)
Payments of tax withholding on vested restricted shares		(273)		(455)
Other		136		166
Net cash used in financing activities		(1,017)		(1,121)
Decrease in cash and cash equivalents		(36,338)		(36,681)
Cash and cash equivalents at beginning of period		45,548		77,051
Cash and cash equivalents at end of period	$	9,210	$	40,370
Supplemental disclosure of cash flow information:
Interest paid	$	934	$	876
Income taxes paid	$	216	$	1,610
Supplemental disclosure of non-cash information:
Unpaid liability to acquire property and equipment	$	1,832	$	4,121

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.    NATURE OF OPERATIONS AND BASIS OF PRESENTATION

A.    Nature of Operations

Duluth Holdings Inc. (“Duluth Trading” or the “Company”), a Wisconsin corporation, is a lifestyle brand of men’s and women’s casual wear, workwear and accessories sold primarily through the Company’s own omnichannel platform. The Company’s products are marketed under the Duluth Trading name, with the majority of products being exclusively developed and sold as Duluth Trading branded merchandise.

The Company identifies its operating segments according to how its business activities are managed and evaluated. The Company continues to report one reportable external segment, consistent with the Company’s omnichannel business approach. The Company’s revenues generated outside the United States were insignificant.

The Company has two classes of authorized common stock: Class A common stock and Class B common stock. The rights of holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to ten votes per share and is convertible at any time into one share of Class B common stock. Each share of Class B common stock is entitled to one vote per share. The Company’s Class B common stock trades on the NASDAQ Global Select Market under the symbol “DLTH.”

B.    Basis of Presentation

The condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The Company consolidates TRI Holdings, LLC (“TRI”) as a variable interest entity (see Note 6 “Variable Interest Entity” for further information). All significant intercompany balances and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on the Sunday nearest to January 31 of the following year. Fiscal 2023 is a 52-week period and ends on January 28, 2024. Fiscal 2022 was a 52-week period and ended on January 29, 2023. The three months of fiscal 2023 and fiscal 2022 represent the Company’s 13-week periods ended April 30, 2023 and May 1, 2022, respectively.

The accompanying condensed consolidated financial statements as of and for the three months ended April 30, 2023 and May 1, 2022 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three months ended April 30, 2023 and May 1, 2022. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the fiscal year ended January 29, 2023.

C.    Impairment Analysis

As of April 30, 2023 and for the three months ended, no triggering events or indicators of asset impairment were noted.

D.    Inventory

Inventory, consisting of purchased product, is valued at the lower of cost or net realizable value, under the first-in, first-out method. The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory and lower of cost or market reserves) and estimates of inventory shrinkage. Both estimates have calculations that require the Company to make assumptions and apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. Inventory is adjusted periodically to reflect current market conditions, which requires management’s judgment that may significantly affect the ending inventory valuation, as well as gross margin.

The reserve for inventory shrinkage is adjusted to reflect the trend of historical physical inventory count results. The Company performs its retail store physical inventory counts in July and the difference between actual and estimated shrinkage, recorded in Cost of goods sold, may cause fluctuations in second fiscal quarter results.

10

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

E.    Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

	April 30, 2023		January 29, 2023
(in thousands)
Prepaid expenses & other current assets
Pending returns inventory, net	$	2,001	$	2,373
Current software hosting implementation costs, net		3,024		3,074
Other prepaid expenses		10,893		9,707
Prepaid expenses & other current assets	$	15,918	$	15,154
Other assets, net
Goodwill	$	402	$	402
Intangible assets, net		445		450
Non-current software hosting implementation costs		6,047		6,148
Other assets, net		1,697		1,727
Other assets, net	$	8,591	$	8,727

F.    Seasonality of Business

The Company’s business is affected by the pattern of seasonality common to most apparel businesses. Historically, the Company has recognized a significant portion of its revenue and operating profit in the fourth fiscal quarter of each year due to increased sales during the holiday season.

G.    Cash and Cash Equivalents

The Company considers short-term investments with original maturities of three months or less when purchased to be cash equivalents. Amounts receivable from credit card issuers are typically converted to cash within 2 to 4 days of the original sales transaction and are considered to be cash equivalents.

H.    Reclassifications

Certain reclassifications have been made to the 2022 financial statements in order to conform to 2023 presentation. The Company reclassified $4.2 million and ($4.2) million from Property, Plant & Equipment and Prepaid Expenses, respectively, in the prior period. There were no changes to previously reported shareholders' equity, statement of cash flows or net income (loss) as a result of the reclassifications.

I.    Significant Accounting Policies

There have been no significant changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended January 29, 2023.

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11

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

2. LEASES

Based on the criteria set forth in ASC Topic 842, Leases (“ASC 842”), the Company recognizes Right-of-use (ROU) assets and lease liabilities related to leases on the Company’s consolidated balance sheets. The Company determines if an arrangement is, or contains, a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities reflect the obligation to make lease payments arising from the lease. At any given time during the lease term, the lease liability represents the present value of the remaining lease payments and the ROU asset is measured at the amount of the lease liability, adjusted for pre-paid rent, unamortized initial direct costs and the remaining balance of lease incentives received. Both the lease ROU asset and liability are reduced to zero at the end of the lease.

The Company leases retail space under non-cancelable lease agreements, which expire on various dates through 2036. Substantially all of these arrangements are store leases. Store leases generally have initial lease terms ranging from five years to fifteen years with renewal options and rent escalation provisions. At the commencement of a lease, the Company includes only the initial lease term as the option to extend is not reasonably certain. The Company does not record leases with a lease term of 12 months or less on the Company’s consolidated balance sheets.

When calculating the lease liability on a discounted basis, the Company applies its estimated discount. The Company bases this discount on a collateralized interest rate as well as publicly available data for instruments with similar characteristics.

In addition to rent payments, leases for retail space contain payments for real estate taxes, insurance costs, common area maintenance, and utilities that are not fixed. The Company accounts for these costs as variable payments and does not include such costs as a lease component.

The expense components of the Company’s leases reflected on the Company’s consolidated statement of operations were as follows:

	Consolidated Statement	Three Months Ended
	of Operations	April 30, 2023		May 1, 2022
(in thousands)
Finance lease expenses
Amortization of right-of-use ‎assets	Selling, general and ‎administrative expenses	$	840	$	840
Interest on lease liabilities	Interest expense		438		466
Total finance lease expense		$	1,278	$	1,306
Operating lease expense	Selling, general and ‎administrative expenses	$	5,050	$	4,389
Amortization of build-to-suit ‎leases capital contribution	Selling, general and ‎administrative expenses		321		321
Variable lease expense	Selling, general and ‎administrative expenses		2,914		1,972
Total lease expense		$	9,563	$	7,988

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12

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Other information related to leases were as follows:

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	694	$	664
Operating cash flows from finance leases	$	438	$	466
Operating cash flows from operating leases	$	5,135	$	4,439
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases		588		—
Weighted-average remaining lease term (in years):
Finance leases		11		12
Operating leases		8		8
Weighted-average discount rate:
Finance leases		4.4%		4.4%
Operating leases		4.1%		4.1%

Future minimum lease payments under the non-cancellable leases are as follows as of April 30, 2023:

Fiscal year	Finance		Operating
(in thousands)
2023 (remainder of fiscal year)	$	3,419	$	15,569
2024		4,736		20,313
2025		5,099		19,648
2026		3,993		18,795
2027		3,993		17,545
Thereafter		29,231		61,036
Total future minimum lease payments	$	50,471	$	152,906
Less – Discount		(10,898)		(23,174)
Lease liability	$	39,573	$	129,732

3.    DEBT AND CREDIT AGREEMENT

Debt consists of the following:

	April 30, 2023		January 29, 2023
(in thousands)
TRI Senior Secured Note	$	23,013	$	23,181
TRI Note		3,500		3,500
	$	26,513	$	26,681
Less: current maturities		787		768
TRI long-term debt	$	25,726	$	25,913

TRI Holdings, LLC

TRI entered into a senior secured note (“TRI Senior Secured Note”) with an original balance of $26.7 million. The TRI Senior Secured Note is scheduled to mature on October 15, 2038 and requires installment payments with an interest rate of 4.95%. See Note 6 “Variable Interest Entities” for further information.

13

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

TRI entered into a promissory note (“TRI Note”) with an original balance of $3.5 million. The TRI Note is scheduled to mature in November 2038 and requires annual interest payments at a rate of 3.05%, with a final balloon payment due in November 2038.

While the above notes are consolidated in accordance with ASC Topic 810, Consolidation, the Company is not the guarantor nor obligor of these notes.

Credit Agreement

On May 14, 2021, the Company entered into a credit agreement (the “Credit Agreement”), which was treated as a modification for accounting purposes. The Credit Agreement originally matured on May 14, 2026 and provided for borrowings of up to $150.0 million that were available under a revolving senior credit facility, with a $5.0 million sublimit for issuance of standby letters of credit, as well as a $10.0 million sublimit for swing line loans. At the Company’s option, the interest rate applicable to the revolving senior credit facility was a floating rate equal to: (i) the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus the applicable rate of 1.25% to 2.00% determined based on the Company’s rent adjusted leverage ratio, or (ii) the base rate plus the applicable rate of 0.25% to 1.00% based on the Company’s rent adjusted leverage ratio. The Credit Agreement was secured by essentially all Company assets and requires the Company to maintain compliance with certain financial and non-financial covenants, including a maximum rent adjusted leverage ratio and a minimum fixed charge coverage ratio as defined in the Credit Agreement.

On July 8, 2022, the Company entered into the First Amendment to the Credit Agreement (the “First Amendment”), which was treated as a modification for accounting purposes. The First Amendment amends the Credit Agreement in order to (i) increase the revolving commitment from $150 million to $200 million; (ii) extend the maturity date from May 14, 2026 to July 8, 2027; (iii) amend the pricing index to replace BSBY with the Term Secured Overnight Financing Rate; and (iv) to reduce the commitment fee in some instances.

As of April 30, 2023 and for the three months then ended, the Company was in compliance with all financial and non-financial covenants contained within the Credit Agreement and the First Amendment.

4.    ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

	April 30, 2023		January 29, 2023
(in thousands)
Salaries and benefits	$	3,615	$	2,404
Deferred revenue		8,525		10,249
Freight		4,315		7,193
Product returns		4,259		5,168
Unpaid purchases of property & equipment		1,250		6,271
Accrued advertising		2,386		2,020
Other		6,571		7,510
Total accrued expenses and other current liabilities	$	30,921	$	40,815

5.    FAIR VALUE

ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. ASC 820 describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable, as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

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DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s assets and liabilities measured at fair value are categorized as Level 1 or Level 3 instruments. The fair value of the Company’s money market account is obtained from real-time quotes for transactions in active exchange markets involving identical assets (Level 1). The fair value of the Company’s available-for-sale security was valued based on a discounted cash flow method (Level 3), which incorporates the U.S. Treasury yield curve, credit information and an estimate of future cash flows. During fiscal 2022, certain changes in the inputs did impact the fair value of the available-for-sale security. The calculated fair value is based on estimates that are subjective in nature and involve uncertainties and matters of significant judgement and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The amortized cost and fair value of the Company’s money market account and available-for-sale security and the corresponding amount of gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:

	April 30, 2023
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
(in thousands)
Level 1 security:
Money market funds	$	—	$	—	$	—	$	—
Level 3 security:
Corporate trust	$	5,693	$	—	$	(277)	$	5,416

	January 29, 2023
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
(in thousands)
Level 1 security:
Money market funds	$	25,031	$	—	$	—	$	25,031
Level 3 security:
Corporate trust	$	5,737	$	—	$	(198)	$	5,539

The Company does not intend to sell the available-for-sale-security in the near term and does not believe that it will be required to sell the security. The Company reviews its securities on a quarterly basis to monitor its exposure to other-than-temporary impairment.

No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the three months ended April 30, 2023 or May 1, 2022.

15

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of April 30, 2023.

	Amortized		Estimated
	Cost		Fair Value
(in thousands)
Within one year	$	186	$	167
After one year through five years		1,236		1,146
After five years through ten years		1,872		1,783
After ten years		2,399		2,320
Total	$	5,693	$	5,416

The carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows:

	April 30, 2023				January 29, 2023
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
(in thousands)
TRI Long-term debt, including short-term portion	$	26,513	$	25,577	$	26,681	$	26,172

The above long-term debt, including short-term portion is attributable to the consolidation of TRI in accordance with ASC Topic 810, Consolidation. The fair value was also based on a discounted cash flow method (Level 3) based on credit information and an estimate of future cash flows.

6.    VARIABLE INTEREST ENTITY

Based upon the criteria set forth in ASC 810, Consolidation, the Company consolidates variable interest entities (“VIEs”) in which it has a controlling financial interest and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE. The Company has determined that it was the primary beneficiary of one variable interest entity (“VIE”) as of April 30, 2023 and January 29, 2023.

The Company leases the Company’s headquarters in Mt. Horeb, Wisconsin from TRI. In conjunction with the lease, the Company invested $6.3 million in a trust that loaned funds to TRI for the construction of the Company’s headquarters. TRI is a Wisconsin limited liability company whose primary purpose and activity is to own this real property. The Company considers itself the primary beneficiary for TRI as the Company has both the power to direct the activities that most significantly impact the entity’s economic performance and is expected to receive benefits that are significant to TRI. As the Company is the primary beneficiary, it consolidates TRI and the lease is eliminated in consolidation. The Company does not consolidate the trust as the Company is not the primary beneficiary.

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DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of April 30, 2023 and January 29, 2023:

	April 30, 2023		January 29, 2023
(in thousands)
Cash	$	26	$	20
Property and equipment, net		23,405		23,612
Total assets	$	23,431	$	23,632
Other current liabilities	$	136	$	161
Current maturities of long-term debt		787		768
TRI Long-term debt		25,726		25,913
Noncontrolling interest in VIE		(3,218)		(3,210)
Total liabilities and shareholders' equity	$	23,431	$	23,632

7.    EARNINGS PER SHARE

Earnings per share is computed under the provisions of ASC 260, Earnings Per Share. Basic earnings per share is based on the weighted average number of common shares outstanding for the period. Diluted earnings per share is based on the weighted average number of common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock and are considered only for dilutive earnings per share unless considered anti-dilutive. The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation is as follows:

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands, except per share data)
Numerator - net loss attributable to ‎controlling interest	$	(3,869)	$	(1,294)
Denominator - weighted average shares ‎   (Class A and Class B)
Basic		32,865		32,714
Dilutive shares		—		—
Diluted		32,865		32,714
Earnings per share (Class A and Class B)
Basic	$	(0.12)	$	(0.04)
Diluted	$	(0.12)	$	(0.04)

The computation of diluted (loss) earnings per share excluded 0.3 million and 0.2 million shares of unvested restricted stock for the three months ended April 30, 2023 and May 1, 2022, respectively because their inclusion would be anti-dilutive due to a net loss.

8.    STOCK-BASED COMPENSATION

The Company accounts for its stock-based compensation plan in accordance with ASC 718, Stock Compensation, which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period of the award.

Total stock compensation expense associated with restricted stock recognized by the Company was $1.0 million and $0.6 million for the three months ended April 30, 2023 and May 1, 2022, respectively. The Company’s total stock compensation expense is included in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations.

17

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

A summary of the activity in the Company’s unvested restricted stock during the three months ended April 30, 2023 is as follows:

		Weighted
		average
		fair value
	Shares	per share
Outstanding at January 29, 2023	618,772	$	12.05
Granted	1,066,091		6.59
Vested	(119,825)		12.45
Forfeited	(8,556)		12.10
Outstanding at April 30, 2023	1,556,482	$	8.54

At April 30, 2023, the Company had unrecognized compensation expense of $10.9 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.9 years.

9.    PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	April 30, 2023		January 29, 2023
(in thousands)
Land and land improvements	$	4,486	$	4,486
Leasehold improvements		50,793		49,450
Buildings		36,191		36,183
Vehicles		161		161
Warehouse equipment		25,962		25,951
Office equipment and furniture		53,763		53,713
Computer equipment		9,502		9,185
Software		36,878		36,260
		217,736		215,389
Accumulated depreciation and amortization		(125,431)		(118,989)
		92,305		96,400
Construction in progress		30,507		16,164
Property and equipment, net	$	122,812	$	112,564

10.    REVENUE

The Company’s revenue primarily consists of the sale of apparel, footwear and hard goods. Revenue for merchandise that is shipped to our customers from our distribution centers and stores is recognized upon shipment. Store revenue is recognized at the point of sale, net of returns, and excludes taxes. Shipping and processing revenue generated from customer orders are included as a component of net sales and shipping and processing expense, including handling expense, is included as a component of selling, general and administrative expenses. Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included in accrued expenses.

18

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Sales disaggregated based upon sales channel is presented below.

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands)
Direct-to-consumer	$	79,502	$	77,680
Stores		44,257		45,224
	$	123,759	$	122,904

Contract Assets and Liabilities

The Company’s contract assets primarily consist of the right of return for amounts of inventory to be returned that is expected to be resold and is recorded in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. The Company’s contract liabilities primarily consist of gift card liabilities and are recorded in Accrued expenses and other current liabilities under deferred revenue (see Note 4 “Accrued Expenses and Other Current Liabilities”) on the Company’s consolidated balance sheets. Upon issuance of a gift card, a liability is established for its cash value. The gift card liability is relieved and revenues on gift cards are recorded at the time of redemption by the customer.

Contract assets and liabilities on the Company’s consolidated balance sheets are presented in the following table:

	April 30, 2023		January 29, 2023
(in thousands)
Contract assets	$	2,001	$	2,373
Contract liabilities	$	8,525	$	10,249

Revenue from gift cards is recognized when the gift card is redeemed by the customer for merchandise or as a gift card breakage, an estimate of gift cards which will not be redeemed. The Company does not record breakage revenue when escheat liability to the relevant jurisdictions exists. Gift card breakage is recorded within Net sales on the Company’s consolidated statement of operations. The following table provides the reconciliation of the contract liability related to gift cards for the nine months ended:

	April 30, 2023		May 1, 2022
(in thousands)
Balance as of beginning of period	$	10,249	$	10,791
Gift cards sold		1,878		1,909
Gift cards redeemed		(3,553)		(3,603)
Gift card breakage		(49)		(43)
Balance as of end of period	$	8,525	$	9,054

11.    INCOME TAXES

The provision for income taxes for the interim period is based on an estimate of the annual effective tax rate adjusted to reflect the impact of discrete items. Management judgment is required in projecting ordinary income to estimate the Company’s annual effective tax rate. The effective tax rate related to controlling interest was 27% and 25% for the three months ended April 30, 2023 and May 1, 2022, respectively. The income from TRI was excluded from the calculation of the Company’s effective tax rate, as TRI is a limited liability company and not subject to income taxes.

‎

19

DULUTH HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

12.    RECENT ACCOUNTING PRONOUNCEMENTS

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, which include trade and other receivables, loans and held-to-maturity debt securities, to record an allowance for credit risk based on expected losses rather than incurred losses, otherwise known as “CECL”. In addition, this guidance changes the recognition for credit losses on available-for-sale debt securities, which can occur as a result of market and credit risk and requires additional disclosures. On November 15, 2019, the FASB issued ASU No. 2019-10 “Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815, and Leases (Topic 842),” (ASU 2019-10”), which provides a framework to stagger effective dates for future major accounting standards and amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. ASU 2019-10 amends the effective dates for ASU 2016-13 for smaller reporting companies with fiscal years beginning after December 15, 2022, and interim periods within those years. The Company adopted ASU 2016-13 on January 30, 2023, the first day of the Company’s first quarter for the fiscal year ending January 28, 2024, the Company’s fiscal year 2023. The adoption of the standard did not have a material impact on the Company’s consolidated financial results.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the financial statements and related notes of Duluth Holdings Inc. included in Item 1of this Quarterly Report on Form 10-Q and with our audited financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2023 (“2022 Form 10-K”).

The Company’s fiscal year ends on the Sunday nearest to January 31 of the following year. Fiscal 2023 is a 52-week period and ends on January 28, 2024. Fiscal 2022 was a 52-week period and ended on January 29, 2023. The three months of fiscal 2023 and fiscal 2022 represent our 13-week periods ended April 30, 2023 and May 1, 2022, respectively.

Unless the context indicates otherwise, the terms the “Company,” “Duluth,” “Duluth Trading,” “we,” “our,” or “us” are used to refer to Duluth Holdings Inc.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. All statements other than statements of historical or current facts included in this Quarterly Report on Form 10-Q are forward-looking statements. Forward looking statements refer to our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “could,” “estimate,” “expect,” “project,” “plan,” “potential,” “intend,” “believe,” “may,” “might,” “will,” “objective,” “should,” “would,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected earnings, revenue, costs, expenditures, cash flows, growth rates and financial results, our plans and objectives for future operations, growth initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described under Part I, Item 1A “Risk Factors,” in our 2022 Form 10-K, and other SEC filings, which factors are incorporated by reference herein. These risks and uncertainties include, but are not limited to, the following: the impact of inflation on our results of operations; the prolonged effects of COVID-19 on store traffic and disruptions to our distribution network, supply chains and operations; our ability to maintain and enhance a strong brand image; effectively adapting to new challenges associated with our expansion into new geographic markets; generating adequate cash from our existing stores to support our growth; effectively relying on sources for merchandise located in foreign markets; transportation delays and interruptions, including port congestion; inability to timely and effectively obtain shipments of products from our suppliers and deliver merchandise to our customers; the inability to maintain the performance of a maturing store portfolio; the impact of changes in corporate tax regulations; identifying and responding to new and changing customer preferences; the success of the locations in which our stores are located; our ability to attract and retain customers in the various retail venues and locations in which our stores are located; competing effectively in an environment of intense competition; our ability to adapt to significant changes in sales due to the seasonality of our business; price reductions or inventory shortages resulting from failure to purchase the appropriate amount of inventory in advance of the season in which it will be sold due to global market constraints; increases in costs of fuel or other energy, transportation or utility costs and in the costs of labor and employment; failure of our information technology systems to support our current and growing business, before and after our planned upgrades; and other factors that may be disclosed in our SEC filings or otherwise. Moreover, we operate in an evolving environment, new risk factors and uncertainties emerge from time to time and it is not possible for management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. We qualify all of our forward-looking statements by these cautionary statements.

We undertake no obligation to update or revise these forward-looking statements, except as required under the federal securities laws.

Overview

We are a lifestyle brand of men’s and women’s casual wear, workwear and accessories sold primarily through our own omnichannel platform. We offer products nationwide through our website and catalog. In 2010, we initiated our omnichannel platform with the opening of our first store. Since then, we have expanded our retail presence, and as of April 30, 2023, we operated 62 retail stores and three outlet stores.

We offer a comprehensive line of innovative, durable and functional products, such as our Longtail T^® shirts, Buck Naked^TM underwear, Fire Hose^® work pants, and No-Yank^® Tank, which reflect our position as the Modern, Self-Reliant American Lifestyle brand. Our brand has a heritage in workwear that transcends tradesmen and appeals to a broad demographic for everyday and on-the-job use.

‎

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From our heritage as a catalog for those working in the building trades, Duluth Trading has become a widely recognized brand and proprietary line of innovative and functional apparel and gear. Over the last decade, we have created strong brand awareness, built a loyal customer base and generated robust sales momentum. We have done so by sticking to our roots of “there’s gotta be a better way” and through our relentless focus on providing our customers with quality, functional products.

A summary of our financial results is as follows:

Net sales increased by 0.7% over the prior year first quarter to $123.8 million;

Net loss of $3.9 million in fiscal 2023 first quarter compared to the prior year first quarter net loss of $1.3 million; and

Adjusted EBITDA decreased to $5.3 million in fiscal 2023 first quarter compared to the prior year first quarter Adjusted EBITDA of $7.9 million.

See the “Reconciliation of Net Income (Loss) to EBITDA and EBITDA to Adjusted EBITDA” section for a reconciliation of our net income (loss) to EBITDA and EBITDA to Adjusted EBITDA, both of which are non-U.S. GAAP financial measures. See also the information under the heading “Adjusted EBITDA” in the section “How We Assess the Performance of Our Business” for our definition of Adjusted EBITDA.

Our management’s discussion and analysis includes market sales metrics for our stores, website and catalog sales. Market areas are determined by a third-party that divides the United States and Puerto Rico into 280 unique geographical areas. Our store market sales metrics include sales from our stores, website and catalog. Our non-store market sales metrics include sales from our website and catalog.

Economic Conditions

The United States economy has experienced continued high inflation during the first quarter of 2023 and there are expectations in the market that inflation may remain at elevated levels.

The ultimate impact of higher inflationary periods on our operational and financial performance still depends on future developments outside of our control. Given the uncertainty, we cannot reasonably estimate store traffic patterns and the prolonged impact on overall consumer demand.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of financial and operating measures that affect our operating results.

Net Sales

Net sales reflect our sale of merchandise plus shipping and handling revenue collected from our customers, less returns and discounts. Direct-to-consumer sales are recognized upon shipment of the product and store sales are recognized at the point of sale.

Gross Profit

Gross profit is equal to our net sales less cost of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin. Cost of goods sold includes the direct cost of purchased merchandise; inventory shrinkage; inventory adjustments due to obsolescence, including excess and slow-moving inventory and lower of cost and net realizable reserves; inbound freight; and freight from our distribution centers to our retail stores. The primary drivers of the costs of individual goods are raw material costs. Depreciation and amortization are excluded from gross profit. We expect gross profit to increase to the extent that we successfully grow our net sales. Our gross profit may not be comparable to other retailers, as we do not include distribution network and store occupancy expenses in calculating gross profit, but instead we include them in selling, general and administrative expenses.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include all operating costs not included in cost of goods sold. These expenses include all payroll and payroll-related expenses and occupancy expenses related to our stores and to our operations at our headquarters, including utilities, depreciation and amortization. They also include marketing expense, which primarily includes digital and television advertising, catalog production, mailing and print advertising costs, as well as all logistics costs associated with shipping product to our customers, consulting and software expenses and professional services fees. Selling,

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general and administrative expenses as a percentage of net sales is usually higher in lower-volume quarters and lower in higher-volume quarters because a portion of the costs are relatively fixed.

Adjusted EBITDA

We believe Adjusted EBITDA is a useful measure of operating performance, as it provides a clearer picture of operating results by excluding the effects of financing and investing activities by eliminating the effects of interest and depreciation costs and eliminating expenses that are not reflective of underlying business performance. We use Adjusted EBITDA to facilitate a comparison of our operating performance on a consistent basis from period-to-period and to provide for a more complete understanding of factors and trends affecting our business.

We define Adjusted EBITDA as consolidated net income before depreciation and amortization, interest expense and provision for income taxes adjusted for the impact of certain items, including non-cash and other items we do not consider representative of our ongoing operating performance. We believe Adjusted EBITDA is less susceptible to variances in actual performance resulting from depreciation, amortization and other items. We also use Adjusted EBITDA as the key financial metric in determining bonus compensation for our employees. This non-GAAP measure may not be comparable to similarly titled measures used by other companies.

Results of Operations

The following table summarizes our unaudited consolidated results of operations for the periods indicated, both in dollars and as a percentage of net sales.

	Three Months Ended
	April 30, 2023			May 1, 2022
(in thousands)
Net sales	$	123,759		$	122,904
Cost of goods sold (excluding depreciation and amortization)		58,108			55,841
Gross profit		65,651			67,063
Selling, general and administrative expenses		70,200			67,994
Operating loss		(4,549)			(931)
Interest expense		934			876
Other income, net		148			46
Loss before income taxes		(5,335)			(1,761)
Income tax benefit		(1,458)			(438)
Net loss		(3,877)			(1,323)
Less: Net loss attributable to noncontrolling interest		(8)			(29)
Net loss attributable to controlling interest	$	(3,869)		$	(1,294)
Percentage of Net sales:
Net sales		100.0	%		100.0	%
Cost of goods sold (excluding depreciation ‎and amortization)		47.0	%		45.4	%
Gross margin		53.0	%		54.6	%
Selling, general and administrative expenses		56.7	%		55.3	%
Operating loss		(3.7)	%		(0.8)	%
Interest expense		0.8	%		0.7	%
Other income, net		-	%		-	%
Loss before income taxes		(4.3)	%		(1.4)	%
Income tax benefit		(1.2)	%		(0.4)	%
Net loss		(3.1)	%		(1.1)	%
Less: Net loss attributable to noncontrolling interest		-	%		-	%
Net loss attributable to controlling interest		(3.1)	%		(1.1)	%

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Three Months Ended April 30, 2023, Compared to Three Months Ended May 1, 2022

Net Sales

Net sales increased $0.9 million, or 0.7%, to $123.8 million in the three months ended April 30, 2023 compared to $122.9 million in the three months ended May 1, 2022.

Store market net sales increased $0.3 million, or 0.3%, to $85.4 million in the three months ended April 30, 2023 compared to $85.1 million in the three months ended May 1, 2022. Non-store market net sales increased by $0.6 million, or 1.7%, to $37.4 million in the three months ended April 30, 2023 compared to $36.8 million in the three months ended May 1, 2022.

Gross Profit

Gross profit decreased $1.4 million, or 2.1%, to $65.7 million in the three months ended April 30, 2023 compared to $67.1 million in the three months ended May 1, 2022. As a percentage of net sales, gross margin decreased to 53.0% of net sales in the three months ended April 30, 2023, compared to 54.6% of net sales in the three months ended May 1, 2022. The decrease in gross margin was primarily driven by a higher mix of promotional and clearance sales during the current period. The lower product margin rate was partially offset by expensing $3.9 million of expedited freight during the first quarter of 2022 compared to $0.1 million during the current quarter, impacting the quarter-over-quarter margin rate variance by 3.1%.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $2.2 million, or 3.2%, to $70.2 million in the three months ended April 30, 2023 compared to $68.0 million in the three months ended May 1, 2022. Selling, general and administrative expenses as a percentage of net sales increased to 56.7% in the three months ended April 30, 2023, compared to 55.3% in the three months ended May 1, 2022.

The increase in selling, general and administrative expense was partially due to higher occupancy costs from the new automated Southeast fulfillment center, coupled with increased amortization of software hosting implementation costs from continued capital investments.

Income Taxes

Income tax benefit was $1.5 million in the three months ended April 30, 2023, compared to income tax benefit of $0.4 million in the three months ended May 1, 2022. The effective tax rate related to controlling interest was 27% for the three months ended April 30, 2023 compared to 25% for the three months ended May 1, 2022.

Net (Loss) Income Attributable to Controlling Interest

Net loss attributable to controlling interest was $3.9 million, in the three months ended April 30, 2023 compared to net loss of $1.3 million in the three months ended May 1, 2022, due to the factors discussed above.

Reconciliation of Net (Loss) Income to EBITDA and EBITDA to Adjusted EBITDA

The following table presents reconciliations of net income to EBITDA and EBITDA to Adjusted EBITDA, both of which are non-U.S. GAAP financial measures, for the periods indicated below. See the above section titled “How We Assess the Performance of Our Business,” for our definition of Adjusted EBITDA.

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands)
Net loss	$	(3,877)	$	(1,323)
Depreciation and amortization		7,413		7,520
Amortization of internal-use software hosting
subscription implementation costs		1,270		633
Interest expense		934		876
Income tax benefit		(1,458)		(438)
EBITDA	$	4,282	$	7,268
Stock based compensation		990		618
Adjusted EBITDA	$	5,272	$	7,886

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As a result of the factors discussed above in the “Results of Operations” section, Adjusted EBITDA decreased $2.6 million to $5.3 million in the three months ended April 30, 2023 compared to $7.9 million in the three months ended May 1, 2022. As a percentage of net sales, Adjusted EBITDA decreased to 4.3% of net sales in the three months ended April 30, 2023 compared to 6.4% of net sales in the three months ended May 1, 2022.

Liquidity and Capital Resources

General

Our business relies on cash from operating activities and a credit facility as our primary sources of liquidity. Our primary cash needs have been for inventory, marketing and advertising, payroll, store leases, capital expenditures associated with infrastructure and information technology. The most significant components of our working capital are cash, inventory, accounts payable and other current liabilities. At April 30, 2023, our net working capital was $88.7 million, including $9.2 million of cash and cash equivalents.

We expect to spend approximately $55.0 million in fiscal 2023 on capital expenditures, inclusive of software hosting implementation costs, primarily due to investments in logistics optimization, including investments in the fulfillment network and information technology. Due to the seasonality of our business, a significant amount of cash from operating activities is generated during the fourth quarter of our fiscal year. We also use cash in our investing activities for capital expenditures throughout all four quarters of our fiscal year.

We believe that our cash flow from operating activities and the availability of cash under our credit facility will be sufficient to cover working capital requirements and anticipated capital expenditures for the foreseeable future.

Cash Flow Analysis

A summary of operating, investing and financing activities is shown in the following table.

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands)
Net cash used in operating activities	$	(13,973)	$	(31,717)
Net cash used in investing activities		(21,348)		(3,843)
Net cash used in financing activities		(1,017)		(1,121)
Decrease in cash and cash equivalents	$	(36,338)	$	(36,681)

Net Cash Used in Operating Activities

Operating activities consist primarily of net income adjusted for non-cash items that include depreciation and amortization, stock-based compensation and the effect of changes in operating assets and liabilities.

For the three months ended April 30, 2023, net cash used in operating activities was $14.0 million, which primarily consisted of cash used in operating assets and liabilities of $17.1 million. The cash used in operating assets and liabilities of $17.1 million was primarily due to a $21.1 million decrease in trade accounts payable partially offset by a $10.0 million decrease in inventory.

For the three months ended May 1, 2022, net cash used in operating activities was $31.7 million, which primarily consisted of a net loss of $1.3 million and cash used in operating assets and liabilities of $38.6 million. The cash used in operating assets and liabilities of $38.6 million primarily consisted of a $29.6 million increase in inventory and a $17.5 million decrease in accrued expenses offset by a $10.4 million increase in trade accounts payable.

Net Cash Used in Investing Activities

Investing activities consist primarily of capital expenditures for growth related to investments in infrastructure and information technology.

For the three months ended April 30, 2023, net cash used in investing activities was $21.3 million and was primarily driven by new investments in the fulfillment network and information technology.

25

For the three months ended May 1, 2022, net cash used in investing activities was $3.8 million and was primarily driven by capital expenditures of $3.9 million for new investments in information technology.

Net Cash Used in Financing Activities

Financing activities consist primarily of borrowings and payments related to our revolving line of credit and other long-term debt, as well as payments on finance lease obligations.

For the three months ended April 30, 2023, net cash used in financing activities was $1.0 million, primarily consisting of payments on finance lease obligations.

For the three months ended May 1, 2022, net cash used in financing activities was $1.1 million, also primarily consisting of payments on finance lease obligations.

Contractual Obligations

There have been no significant changes to our contractual obligations as described in our Annual Report on Form 10-K for the fiscal year ended January 29, 2023.

Off-Balance Sheet Arrangements

We are not a party to any material off-balance sheet arrangements.

Critical Accounting Policies and Critical Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the related disclosures of contingent assets and liabilities at the date of the financial statements. We evaluate our accounting policies, estimates, and judgments on an on-going basis. We base our estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions and such differences could be material to the consolidated financial statements.

As of the date of this filing, there were no significant changes to any of the critical accounting policies and estimates described in our 2022 Form 10-K.

Recent Accounting Pronouncements

See Note 12 “Recent Accounting Pronouncements,” of Notes to Condensed Consolidated Financial Statements included in Part 1, Item 1, of this quarterly report on Form 10-Q for information regarding recent accounting pronouncements.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in the market risks described in our 2022 Form 10-K. See Note 3 “Debt and Credit Agreement,” of Notes to Condensed Consolidated Financial Statements included in Part 1, Item 1, of this quarterly report on Form 10-Q, for disclosure on our interest rate related to borrowings under our credit agreement.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Section 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires management of an issuer subject to the Exchange Act to evaluate, with the participation of the issuer’s principal executive and principal financial officers, or persons performing similar functions, the effectiveness of the issuer’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act), as of the end of each fiscal quarter. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(d) and 15d-15(d) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

26

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

From time to time, we are subject to certain legal proceedings and claims in the ordinary course of business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, financial condition, operating results or cash flows. We establish reserves for specific legal matters when we determine that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable.

Item 1A.   Risk Factors

We operate in a rapidly changing environment that involves a number of risks that may have a material adverse effect on our business, financial condition and results of operations. For a detailed discussion of the risks that affect our business, please refer to the section entitled “Risk Factors” in our 2022 Form 10-K, or other SEC filings. There have been no material changes to our risk factors as previously disclosed in our fiscal 2022 Annual Report on Form 10-K.
‎

27

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

We did not sell any equity securities during the quarter ended April 30, 2023, which were not registered under the Securities Act.

The following table contains information of shares acquired from employees in lieu of amounts required to satisfy minimum tax withholding requirements upon the vesting of the employees’ restricted stock during the three months ended April 30, 2023.

				Total number	Approximate dollar
				of shares purchased	value of shares that
	Total number			as part of publicly	may yet to be
	of shares	Average price		announced plans	purchased under the
Period	purchased	paid per share		or programs	plans or programs
January 30, 2023 - February 26, 2023	33,194	$	6.92	—	$	—
February 27, 2023 - April 2, 2023	51,956		6.62	—		—
April 3, 2023 - April 30, 2023	34,675		6.29	—		—
Total	119,825	$	6.61	—	$	—

‎

28

Item 6.    Exhibits

EXHIBIT INDEX

Exhibit No.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act, as amended.*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended.*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2023 has been formatted in Inline XBRL (Inline Extensible Business Reporting Language and contained in Exhibits 101).

*	Filed herewith
**	In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”

‎

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: June 2, 2023
	DULUTH HOLDINGS INC. ‎(Registrant)
		/s/ David Loretta
		David Loretta
		Senior Vice President and Chief Financial Officer
		(On behalf of the Registrant and as Principal Financial Officer)
		/s/ Michael Murphy
		Michael Murphy
		Vice President and Chief Accounting Officer
		(On behalf of the Registrant and as Principal Accounting Officer)

30

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Sam Sato, Chief Executive Officer, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Duluth Holdings Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 2, 2023

/s/ Sam Sato

Sam Sato

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, David Loretta, Chief Financial Officer, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Duluth Holdings Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June  2, 2023

/s/ David Loretta

David Loretta

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Duluth Holdings Inc. (the “Company”) for the quarterly period ended April 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sam Sato, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Sam Sato
Name:	Sam Sato
Title:	Chief Executive Officer
Date:	June 2, 2023

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. This certification shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Duluth Holdings Inc. (the “Company”) for the  quarterly period ended April 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Loretta, as Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ David Loretta
Name:	David Loretta
Title:	Chief Financial Officer
Date:	June  2, 2023

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. This certification shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

XML

Document and Entity Information - shares	3 Months Ended
	Apr. 30, 2023	May 31, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Apr. 30, 2023
Document Transition Report	false
Entity File Number	001-37641
Entity Registrant Name	DULUTH HOLDINGS INC.
Entity Tax Identification Number	39-1564801
Entity Incorporation, State or Country Code	WI
Entity Address, Address Line One	201 East Front Street
Entity Address, City or Town	Mount Horeb
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53572
City Area Code	608
Local Phone Number	424-1544
Title of 12(b) Security	Class B Common Stock, No Par Value
Trading Symbol	DLTH
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--01-28
Entity Central Index Key	0001649744
Amendment Flag	false
Class A common stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		3,364,200
Class B common stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		31,194,828

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Current Assets:
Cash and cash equivalents	$ 9,210	$ 45,548
Receivables	6,437	6,041
Inventory, less reserves of $1,929 and $1,837, respectively	144,969	154,922
Prepaid expenses & other current assets	15,918	15,154
Total current assets	176,534	221,665
Property and equipment, net	122,812	112,564
Operating lease right-of-use assets	128,436	131,753
Finance lease right-of-use assets, net	46,474	47,206
Available-for-sale security	5,416	5,539
Other assets, net	8,591	8,727
Deferred tax assets	136
Total assets	488,399	527,454
Current liabilities:
Trade accounts payable	36,123	56,547
Accrued expenses and other current liabilities	30,921	40,815
Income taxes payable	1,423	1,761
Current portion of operating lease liabilities	15,713	15,571
Current portion of finance lease liabilities	2,885	2,842
Current maturities of TRI long-term debt	787	768
Total current liabilities	87,852	118,304
Operating lease liabilities, less current maturities	114,019	117,366
Finance lease liabilities, less current maturities	36,688	37,425
TRI long-term debt, less current maturities	25,726	25,913
Deferred tax liabilities		1,249
Total liabilities	264,285	300,257
Shareholders’ equity:
Preferred stock, no par value; 10,000 shares authorized; no shares issued or outstanding as of April 30, 2023 and January 29, 2023
Treasury stock, at cost; 154 and 112 shares as of April 30, 2023 and January 29, 2023, respectively	(1,732)	(1,459)
Capital stock	99,968	98,842
Retained earnings	129,303	133,172
Accumulated other comprehensive income	(207)	(148)
Total shareholders' equity of Duluth Holdings Inc.	227,332	230,407
Noncontrolling interest	(3,218)	(3,210)
Total shareholders' equity	224,114	227,197
Total liabilities and shareholders' equity	488,399	527,454
Class A common stock [Member]
Shareholders’ equity:
Common stock
Class B common stock [Member]
Shareholders’ equity:
Common stock

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Inventory reserves	$ 1,929	$ 1,837
Preferred stock, no par value
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury stock, shares	154,000	112,000
Class A common stock [Member]
Common stock, no par value
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	3,364,000	3,364,000
Common stock, shares outstanding	3,364,000	3,364,000
Class B common stock [Member]
Common stock, no par value
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	31,264,000	30,191,000
Common stock, shares outstanding	31,110,000	30,079,000

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Condensed Consolidated Statements of Operations [Abstract]
Net sales	$ 123,759	$ 122,904
Cost of goods sold (excluding depreciation and amortization)	58,108	55,841
Gross profit	65,651	67,063
Selling, general and administrative expenses	70,200	67,994
Operating loss	(4,549)	(931)
Interest expense	934	876
Other income, net	148	46
Loss before income taxes	(5,335)	(1,761)
Income tax benefit	(1,458)	(438)
Net loss	(3,877)	(1,323)
Less: Net loss attributable to noncontrolling interest	(8)	(29)
Net loss attributable to controlling interest	$ (3,869)	$ (1,294)
Basic earnings per share (Class A and Class B):
Weighted average shares of common stock outstanding	32,865	32,714
Net loss per share attributable to controlling interest	$ (0.12)	$ (0.04)
Diluted earnings per share (Class A and Class B):
Weighted average shares and equivalents outstanding	32,865	32,714
Net loss per share attributable to controlling interest	$ (0.12)	$ (0.04)

XML

Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Condensed Consolidated Statements of Comprehensive (Loss) Income [Abstract]
Net loss	$ (3,877)	$ (1,323)
Other comprehensive income
Securities available-for-sale: Unrealized security loss arising during the period	(79)	(449)
Securities available-for-sale: Income tax benefit	(20)	(113)
Other comprehensive loss	(59)	(336)
Comprehensive loss	(3,936)	(1,659)
Comprehensive loss attributable to noncontrolling interest	(8)	(29)
Comprehensive loss attributable to controlling interest	$ (3,928)	$ (1,630)

XML

Condensed Consolidated Statement of Shareholders’ Equity - USD ($) shares in Thousands, $ in Thousands	Capital Stock [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interest In Variable Interest Entity [Member]	Total
Beginning balance at Jan. 30, 2022	$ 95,515	$ (1,002)	$ 130,868	$ 489	$ (3,152)	$ 222,718
Beginning balance (in shares) at Jan. 30, 2022	33,071
Issuance of common stock	$ 166					166
Issuance of common stock, shares	292
Stock-based compensation	$ 618					618
Restricted stock forfeitures, shares	(1)
Restricted stock surrendered for taxes		(455)				(455)
Restricted stock surrendered for taxes, shares	(33)
Other comprehensive income (loss)				(336)		(336)
Net income (loss)			(1,294)		(29)	(1,323)
Ending balance at May. 01, 2022	$ 96,299	(1,457)	129,574	153	(3,181)	221,388
Ending balance (in shares) at May. 01, 2022	33,329
Beginning balance at Jan. 29, 2023	$ 98,842	(1,459)	133,172	(148)	(3,210)	227,197
Beginning balance (in shares) at Jan. 29, 2023	33,443
Issuance of common stock	$ 136					136
Issuance of common stock, shares	1,081
Stock-based compensation	$ 990					990
Restricted stock forfeitures, shares	(9)
Restricted stock surrendered for taxes		(273)				(273)
Restricted stock surrendered for taxes, shares	(41)
Other comprehensive income (loss)				(59)		(59)
Net income (loss)			(3,869)		(8)	(3,877)
Ending balance at Apr. 30, 2023	$ 99,968	$ (1,732)	$ 129,303	$ (207)	$ (3,218)	$ 224,114
Ending balance (in shares) at Apr. 30, 2023	34,474

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Cash flows from operating activities:
Net loss	$ (3,877)	$ (1,323)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	7,413	7,520
Stock based compensation	990	618
Deferred income taxes	(1,365)	37
Loss on disposal of property and equipment		26
Changes in operating assets and liabilities:
Receivables	(396)	358
Inventory	9,953	(29,572)
Prepaid expense & other current assets	84	746
Software hosting implementation costs, net	(746)	(1,007)
Deferred catalog costs		10
Trade accounts payable	(21,080)	10,362
Income taxes payable	(338)	(2,032)
Accrued expenses and deferred rent obligations	(4,475)	(17,500)
Other assets	(17)	(11)
Noncash lease impacts	(119)	51
Net cash used in operating activities	(13,973)	(31,717)
Cash flows from investing activities:
Purchases of property and equipment	(21,392)	(3,885)
Principal receipts from available-for-sale security	44	39
Proceeds from disposals		3
Net cash used in investing activities	(21,348)	(3,843)
Cash flows from financing activities:
Proceeds from line of credit	10,000
Payments on line of credit	(10,000)
Payments on TRI long term debt	(186)	(168)
Payments on finance lease obligations	(694)	(664)
Payments of tax withholding on vested restricted shares	(273)	(455)
Other	136	166
Net cash used in financing activities	(1,017)	(1,121)
Decrease in cash and cash equivalents	(36,338)	(36,681)
Cash and cash equivalents at beginning of period	45,548	77,051
Cash and cash equivalents at end of period	9,210	40,370
Supplemental disclosure of cash flow information:
Interest paid	934	876
Income taxes paid	216	1,610
Supplemental disclosure of non-cash information:
Unpaid liability to acquire property and equipment	$ 1,832	$ 4,121

XML

Nature of Operations and Basis of Presentation

3 Months Ended

Apr. 30, 2023

Nature of Operations and Basis of Presentation [Abstract]

Nature of Operations and Basis of Presentation

1.    NATURE OF OPERATIONS AND BASIS OF PRESENTATION

A.    Nature of Operations

Duluth Holdings Inc. (“Duluth Trading” or the “Company”), a Wisconsin corporation, is a lifestyle brand of men’s and women’s casual wear, workwear and accessories sold primarily through the Company’s own omnichannel platform. The Company’s products are marketed under the Duluth Trading name, with the majority of products being exclusively developed and sold as Duluth Trading branded merchandise.

The Company identifies its operating segments according to how its business activities are managed and evaluated. The Company continues to report one reportable external segment, consistent with the Company’s omnichannel business approach. The Company’s revenues generated outside the United States were insignificant.

The Company has two classes of authorized common stock: Class A common stock and Class B common stock. The rights of holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to ten votes per share and is convertible at any time into one share of Class B common stock. Each share of Class B common stock is entitled to one vote per share. The Company’s Class B common stock trades on the NASDAQ Global Select Market under the symbol “DLTH.”

B.    Basis of Presentation

The condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The Company consolidates TRI Holdings, LLC (“TRI”) as a variable interest entity (see Note 6 “Variable Interest Entity” for further information). All significant intercompany balances and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on the Sunday nearest to January 31 of the following year. Fiscal 2023 is a 52-week period and ends on January 28, 2024. Fiscal 2022 was a 52-week period and ended on January 29, 2023. The three months of fiscal 2023 and fiscal 2022 represent the Company’s 13-week periods ended April 30, 2023 and May 1, 2022, respectively.

The accompanying condensed consolidated financial statements as of and for the three months ended April 30, 2023 and May 1, 2022 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three months ended April 30, 2023 and May 1, 2022. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the fiscal year ended January 29, 2023.

C.    Impairment Analysis

As of April 30, 2023 and for the three months ended, no triggering events or indicators of asset impairment were noted.

D.    Inventory

Inventory, consisting of purchased product, is valued at the lower of cost or net realizable value, under the first-in, first-out method. The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory and lower of cost or market reserves) and estimates of inventory shrinkage. Both estimates have calculations that require the Company to make assumptions and apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. Inventory is adjusted periodically to reflect current market conditions, which requires management’s judgment that may significantly affect the ending inventory valuation, as well as gross margin.

The reserve for inventory shrinkage is adjusted to reflect the trend of historical physical inventory count results. The Company performs its retail store physical inventory counts in July and the difference between actual and estimated shrinkage, recorded in Cost of goods sold, may cause fluctuations in second fiscal quarter results.

E.    Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

	April 30, 2023		January 29, 2023
(in thousands)
Prepaid expenses & other current assets
Pending returns inventory, net	$	2,001	$	2,373
Current software hosting implementation costs, net		3,024		3,074
Other prepaid expenses		10,893		9,707
Prepaid expenses & other current assets	$	15,918	$	15,154
Other assets, net
Goodwill	$	402	$	402
Intangible assets, net		445		450
Non-current software hosting implementation costs		6,047		6,148
Other assets, net		1,697		1,727
Other assets, net	$	8,591	$	8,727

F.    Seasonality of Business

The Company’s business is affected by the pattern of seasonality common to most apparel businesses. Historically, the Company has recognized a significant portion of its revenue and operating profit in the fourth fiscal quarter of each year due to increased sales during the holiday season.

G.    Cash and Cash Equivalents

The Company considers short-term investments with original maturities of three months or less when purchased to be cash equivalents. Amounts receivable from credit card issuers are typically converted to cash within 2 to 4 days of the original sales transaction and are considered to be cash equivalents.

H.    Reclassifications

Certain reclassifications have been made to the 2022 financial statements in order to conform to 2023 presentation. The Company reclassified $4.2 million and ($4.2) million from Property, Plant & Equipment and Prepaid Expenses, respectively, in the prior period. There were no changes to previously reported shareholders' equity, statement of cash flows or net income (loss) as a result of the reclassifications.

I.    Significant Accounting Policies

There have been no significant changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended January 29, 2023.

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Leases

3 Months Ended

Apr. 30, 2023

Leases [Abstract]

Leases

‎

2. LEASES

Based on the criteria set forth in ASC Topic 842, Leases (“ASC 842”), the Company recognizes Right-of-use (ROU) assets and lease liabilities related to leases on the Company’s consolidated balance sheets. The Company determines if an arrangement is, or contains, a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities reflect the obligation to make lease payments arising from the lease. At any given time during the lease term, the lease liability represents the present value of the remaining lease payments and the ROU asset is measured at the amount of the lease liability, adjusted for pre-paid rent, unamortized initial direct costs and the remaining balance of lease incentives received. Both the lease ROU asset and liability are reduced to zero at the end of the lease.

The Company leases retail space under non-cancelable lease agreements, which expire on various dates through 2036. Substantially all of these arrangements are store leases. Store leases generally have initial lease terms ranging from five years to fifteen years with renewal options and rent escalation provisions. At the commencement of a lease, the Company includes only the initial lease term as the option to extend is not reasonably certain. The Company does not record leases with a lease term of 12 months or less on the Company’s consolidated balance sheets.

When calculating the lease liability on a discounted basis, the Company applies its estimated discount. The Company bases this discount on a collateralized interest rate as well as publicly available data for instruments with similar characteristics.

In addition to rent payments, leases for retail space contain payments for real estate taxes, insurance costs, common area maintenance, and utilities that are not fixed. The Company accounts for these costs as variable payments and does not include such costs as a lease component.

The expense components of the Company’s leases reflected on the Company’s consolidated statement of operations were as follows:

	Consolidated Statement	Three Months Ended
	of Operations	April 30, 2023		May 1, 2022
(in thousands)
Finance lease expenses
Amortization of right-of-use ‎assets	Selling, general and ‎administrative expenses	$	840	$	840
Interest on lease liabilities	Interest expense		438		466
Total finance lease expense		$	1,278	$	1,306
Operating lease expense	Selling, general and ‎administrative expenses	$	5,050	$	4,389
Amortization of build-to-suit ‎leases capital contribution	Selling, general and ‎administrative expenses		321		321
Variable lease expense	Selling, general and ‎administrative expenses		2,914		1,972
Total lease expense		$	9,563	$	7,988

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Other information related to leases were as follows:

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	694	$	664
Operating cash flows from finance leases	$	438	$	466
Operating cash flows from operating leases	$	5,135	$	4,439
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases		588		—
Weighted-average remaining lease term (in years):
Finance leases		11		12
Operating leases		8		8
Weighted-average discount rate:
Finance leases		4.4%		4.4%
Operating leases		4.1%		4.1%

Future minimum lease payments under the non-cancellable leases are as follows as of April 30, 2023:

Fiscal year	Finance		Operating
(in thousands)
2023 (remainder of fiscal year)	$	3,419	$	15,569
2024		4,736		20,313
2025		5,099		19,648
2026		3,993		18,795
2027		3,993		17,545
Thereafter		29,231		61,036
Total future minimum lease payments	$	50,471	$	152,906
Less – Discount		(10,898)		(23,174)
Lease liability	$	39,573	$	129,732

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Debt and Credit Agreement

3 Months Ended

Apr. 30, 2023

Debt and Credit Agreement [Abstract]

Debt and Credit Agreement

3.    DEBT AND CREDIT AGREEMENT

Debt consists of the following:

	April 30, 2023		January 29, 2023
(in thousands)
TRI Senior Secured Note	$	23,013	$	23,181
TRI Note		3,500		3,500
	$	26,513	$	26,681
Less: current maturities		787		768
TRI long-term debt	$	25,726	$	25,913

TRI Holdings, LLC

TRI entered into a senior secured note (“TRI Senior Secured Note”) with an original balance of $26.7 million. The TRI Senior Secured Note is scheduled to mature on October 15, 2038 and requires installment payments with an interest rate of 4.95%. See Note 6 “Variable Interest Entities” for further information.

TRI entered into a promissory note (“TRI Note”) with an original balance of $3.5 million. The TRI Note is scheduled to mature in November 2038 and requires annual interest payments at a rate of 3.05%, with a final balloon payment due in November 2038.

While the above notes are consolidated in accordance with ASC Topic 810, Consolidation, the Company is not the guarantor nor obligor of these notes.

Credit Agreement

On May 14, 2021, the Company entered into a credit agreement (the “Credit Agreement”), which was treated as a modification for accounting purposes. The Credit Agreement originally matured on May 14, 2026 and provided for borrowings of up to $150.0 million that were available under a revolving senior credit facility, with a $5.0 million sublimit for issuance of standby letters of credit, as well as a $10.0 million sublimit for swing line loans. At the Company’s option, the interest rate applicable to the revolving senior credit facility was a floating rate equal to: (i) the Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus the applicable rate of 1.25% to 2.00% determined based on the Company’s rent adjusted leverage ratio, or (ii) the base rate plus the applicable rate of 0.25% to 1.00% based on the Company’s rent adjusted leverage ratio. The Credit Agreement was secured by essentially all Company assets and requires the Company to maintain compliance with certain financial and non-financial covenants, including a maximum rent adjusted leverage ratio and a minimum fixed charge coverage ratio as defined in the Credit Agreement.

On July 8, 2022, the Company entered into the First Amendment to the Credit Agreement (the “First Amendment”), which was treated as a modification for accounting purposes. The First Amendment amends the Credit Agreement in order to (i) increase the revolving commitment from $150 million to $200 million; (ii) extend the maturity date from May 14, 2026 to July 8, 2027; (iii) amend the pricing index to replace BSBY with the Term Secured Overnight Financing Rate; and (iv) to reduce the commitment fee in some instances.

As of April 30, 2023 and for the three months then ended, the Company was in compliance with all financial and non-financial covenants contained within the Credit Agreement and the First Amendment.

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Accrued Expenses and Other Current Liabilities

3 Months Ended

Apr. 30, 2023

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

4.    ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

	April 30, 2023		January 29, 2023
(in thousands)
Salaries and benefits	$	3,615	$	2,404
Deferred revenue		8,525		10,249
Freight		4,315		7,193
Product returns		4,259		5,168
Unpaid purchases of property & equipment		1,250		6,271
Accrued advertising		2,386		2,020
Other		6,571		7,510
Total accrued expenses and other current liabilities	$	30,921	$	40,815

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Fair Value

3 Months Ended

Apr. 30, 2023

Fair Value [Abstract]

Fair Value

5.    FAIR VALUE

ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date (i.e., an exit price). The exit price is based on the amount that the holder of the asset or liability would receive or need to pay in an actual transaction (or in a hypothetical transaction if an actual transaction does not exist) at the measurement date. ASC 820 describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last unobservable, as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s assets and liabilities measured at fair value are categorized as Level 1 or Level 3 instruments. The fair value of the Company’s money market account is obtained from real-time quotes for transactions in active exchange markets involving identical assets (Level 1). The fair value of the Company’s available-for-sale security was valued based on a discounted cash flow method (Level 3), which incorporates the U.S. Treasury yield curve, credit information and an estimate of future cash flows. During fiscal 2022, certain changes in the inputs did impact the fair value of the available-for-sale security. The calculated fair value is based on estimates that are subjective in nature and involve uncertainties and matters of significant judgement and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The amortized cost and fair value of the Company’s money market account and available-for-sale security and the corresponding amount of gross unrealized gains and losses recognized in accumulated other comprehensive income are as follows:

	April 30, 2023
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
(in thousands)
Level 1 security:
Money market funds	$	—	$	—	$	—	$	—
Level 3 security:
Corporate trust	$	5,693	$	—	$	(277)	$	5,416

	January 29, 2023
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
(in thousands)
Level 1 security:
Money market funds	$	25,031	$	—	$	—	$	25,031
Level 3 security:
Corporate trust	$	5,737	$	—	$	(198)	$	5,539

The Company does not intend to sell the available-for-sale-security in the near term and does not believe that it will be required to sell the security. The Company reviews its securities on a quarterly basis to monitor its exposure to other-than-temporary impairment.

No other-than-temporary impairment was recorded in the unaudited condensed consolidated statements of operations for the three months ended April 30, 2023 or May 1, 2022.

The following table presents future principal receipts related to the Company’s available-for-sale security by contractual maturity as of April 30, 2023.

	Amortized		Estimated
	Cost		Fair Value
(in thousands)
Within one year	$	186	$	167
After one year through five years		1,236		1,146
After five years through ten years		1,872		1,783
After ten years		2,399		2,320
Total	$	5,693	$	5,416

The carrying values and fair values of other financial instruments in the Consolidated Balance Sheets are as follows:

	April 30, 2023				January 29, 2023
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
(in thousands)
TRI Long-term debt, including short-term portion	$	26,513	$	25,577	$	26,681	$	26,172

The above long-term debt, including short-term portion is attributable to the consolidation of TRI in accordance with ASC Topic 810, Consolidation. The fair value was also based on a discounted cash flow method (Level 3) based on credit information and an estimate of future cash flows.

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Variable Interest Entity

3 Months Ended

Apr. 30, 2023

Variable Interest Entity [Abstract]

Variable Interest Entity

6.    VARIABLE INTEREST ENTITY

Based upon the criteria set forth in ASC 810, Consolidation, the Company consolidates variable interest entities (“VIEs”) in which it has a controlling financial interest and is therefore deemed the primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the VIE activities that most significantly impact economic performance; and (b) the obligation to absorb the VIE losses and the right to receive benefits that are significant to the VIE. The Company has determined that it was the primary beneficiary of one variable interest entity (“VIE”) as of April 30, 2023 and January 29, 2023.

The Company leases the Company’s headquarters in Mt. Horeb, Wisconsin from TRI. In conjunction with the lease, the Company invested $6.3 million in a trust that loaned funds to TRI for the construction of the Company’s headquarters. TRI is a Wisconsin limited liability company whose primary purpose and activity is to own this real property. The Company considers itself the primary beneficiary for TRI as the Company has both the power to direct the activities that most significantly impact the entity’s economic performance and is expected to receive benefits that are significant to TRI. As the Company is the primary beneficiary, it consolidates TRI and the lease is eliminated in consolidation. The Company does not consolidate the trust as the Company is not the primary beneficiary.

The condensed consolidated balance sheets include the following amounts as a result of the consolidation of TRI as of April 30, 2023 and January 29, 2023:

	April 30, 2023		January 29, 2023
(in thousands)
Cash	$	26	$	20
Property and equipment, net		23,405		23,612
Total assets	$	23,431	$	23,632
Other current liabilities	$	136	$	161
Current maturities of long-term debt		787		768
TRI Long-term debt		25,726		25,913
Noncontrolling interest in VIE		(3,218)		(3,210)
Total liabilities and shareholders' equity	$	23,431	$	23,632

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Earnings Per Share

3 Months Ended

Apr. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

7.    EARNINGS PER SHARE

Earnings per share is computed under the provisions of ASC 260, Earnings Per Share. Basic earnings per share is based on the weighted average number of common shares outstanding for the period. Diluted earnings per share is based on the weighted average number of common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock and are considered only for dilutive earnings per share unless considered anti-dilutive. The reconciliation of the numerator and denominator of the basic and diluted earnings per share calculation is as follows:

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands, except per share data)
Numerator - net loss attributable to ‎controlling interest	$	(3,869)	$	(1,294)
Denominator - weighted average shares ‎   (Class A and Class B)
Basic		32,865		32,714
Dilutive shares		—		—
Diluted		32,865		32,714
Earnings per share (Class A and Class B)
Basic	$	(0.12)	$	(0.04)
Diluted	$	(0.12)	$	(0.04)

The computation of diluted (loss) earnings per share excluded 0.3 million and 0.2 million shares of unvested restricted stock for the three months ended April 30, 2023 and May 1, 2022, respectively because their inclusion would be anti-dilutive due to a net loss.

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Stock-Based Compensation

3 Months Ended

Apr. 30, 2023

Stock-Based Compensation [Abstract]

Stock-Based Compensation

8.    STOCK-BASED COMPENSATION

The Company accounts for its stock-based compensation plan in accordance with ASC 718, Stock Compensation, which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period of the award.

Total stock compensation expense associated with restricted stock recognized by the Company was $1.0 million and $0.6 million for the three months ended April 30, 2023 and May 1, 2022, respectively. The Company’s total stock compensation expense is included in selling, general and administrative expenses on the Condensed Consolidated Statements of Operations.

A summary of the activity in the Company’s unvested restricted stock during the three months ended April 30, 2023 is as follows:

		Weighted
		average
		fair value
	Shares	per share
Outstanding at January 29, 2023	618,772	$	12.05
Granted	1,066,091		6.59
Vested	(119,825)		12.45
Forfeited	(8,556)		12.10
Outstanding at April 30, 2023	1,556,482	$	8.54

At April 30, 2023, the Company had unrecognized compensation expense of $10.9 million related to the restricted stock awards, which is expected to be recognized over a weighted average period of 2.9 years.

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Property and Equipment

3 Months Ended

Apr. 30, 2023

Property and Equipment [Abstract]

Property and Equipment

9.    PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	April 30, 2023		January 29, 2023
(in thousands)
Land and land improvements	$	4,486	$	4,486
Leasehold improvements		50,793		49,450
Buildings		36,191		36,183
Vehicles		161		161
Warehouse equipment		25,962		25,951
Office equipment and furniture		53,763		53,713
Computer equipment		9,502		9,185
Software		36,878		36,260
		217,736		215,389
Accumulated depreciation and amortization		(125,431)		(118,989)
		92,305		96,400
Construction in progress		30,507		16,164
Property and equipment, net	$	122,812	$	112,564

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Revenue

3 Months Ended

Apr. 30, 2023

Revenue [Abstract]

Revenue

10.    REVENUE

The Company’s revenue primarily consists of the sale of apparel, footwear and hard goods. Revenue for merchandise that is shipped to our customers from our distribution centers and stores is recognized upon shipment. Store revenue is recognized at the point of sale, net of returns, and excludes taxes. Shipping and processing revenue generated from customer orders are included as a component of net sales and shipping and processing expense, including handling expense, is included as a component of selling, general and administrative expenses. Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included in accrued expenses.

Sales disaggregated based upon sales channel is presented below.

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands)
Direct-to-consumer	$	79,502	$	77,680
Stores		44,257		45,224
	$	123,759	$	122,904

Contract Assets and Liabilities

The Company’s contract assets primarily consist of the right of return for amounts of inventory to be returned that is expected to be resold and is recorded in Prepaid expenses and other current assets on the Company’s consolidated balance sheets. The Company’s contract liabilities primarily consist of gift card liabilities and are recorded in Accrued expenses and other current liabilities under deferred revenue (see Note 4 “Accrued Expenses and Other Current Liabilities”) on the Company’s consolidated balance sheets. Upon issuance of a gift card, a liability is established for its cash value. The gift card liability is relieved and revenues on gift cards are recorded at the time of redemption by the customer.

Contract assets and liabilities on the Company’s consolidated balance sheets are presented in the following table:

	April 30, 2023		January 29, 2023
(in thousands)
Contract assets	$	2,001	$	2,373
Contract liabilities	$	8,525	$	10,249

Revenue from gift cards is recognized when the gift card is redeemed by the customer for merchandise or as a gift card breakage, an estimate of gift cards which will not be redeemed. The Company does not record breakage revenue when escheat liability to the relevant jurisdictions exists. Gift card breakage is recorded within Net sales on the Company’s consolidated statement of operations. The following table provides the reconciliation of the contract liability related to gift cards for the nine months ended:

	April 30, 2023		May 1, 2022
(in thousands)
Balance as of beginning of period	$	10,249	$	10,791
Gift cards sold		1,878		1,909
Gift cards redeemed		(3,553)		(3,603)
Gift card breakage		(49)		(43)
Balance as of end of period	$	8,525	$	9,054

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Income Taxes

3 Months Ended

Apr. 30, 2023

Income Taxes [Abstract]

Income Taxes

11.    INCOME TAXES

The provision for income taxes for the interim period is based on an estimate of the annual effective tax rate adjusted to reflect the impact of discrete items. Management judgment is required in projecting ordinary income to estimate the Company’s annual effective tax rate. The effective tax rate related to controlling interest was 27% and 25% for the three months ended April 30, 2023 and May 1, 2022, respectively. The income from TRI was excluded from the calculation of the Company’s effective tax rate, as TRI is a limited liability company and not subject to income taxes.

‎

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Recent Accounting Pronouncements	3 Months Ended
	Apr. 30, 2023
Recent Accounting Pronouncements [Abstract]
Recent Accounting Pronouncements	12.    RECENT ACCOUNTING PRONOUNCEMENTSIn June 2016, the FASB issued Accounting Standards Update No. 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (“ASU 2016-13”), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, which include trade and other receivables, loans and held-to-maturity debt securities, to record an allowance for credit risk based on expected losses rather than incurred losses, otherwise known as “CECL”. In addition, this guidance changes the recognition for credit losses on available-for-sale debt securities, which can occur as a result of market and credit risk and requires additional disclosures. On November 15, 2019, the FASB issued ASU No. 2019-10 “Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815, and Leases (Topic 842),” (ASU 2019-10”), which provides a framework to stagger effective dates for future major accounting standards and amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. ASU 2019-10 amends the effective dates for ASU 2016-13 for smaller reporting companies with fiscal years beginning after December 15, 2022, and interim periods within those years. The Company adopted ASU 2016-13 on January 30, 2023, the first day of the Company’s first quarter for the fiscal year ending January 28, 2024, the Company’s fiscal year 2023. The adoption of the standard did not have a material impact on the Company’s consolidated financial results.

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Nature of Operations and Basis of Presentation (Policy)

3 Months Ended

Apr. 30, 2023

Nature of Operations and Basis of Presentation [Abstract]

Nature of Operations

A.    Nature of Operations

Duluth Holdings Inc. (“Duluth Trading” or the “Company”), a Wisconsin corporation, is a lifestyle brand of men’s and women’s casual wear, workwear and accessories sold primarily through the Company’s own omnichannel platform. The Company’s products are marketed under the Duluth Trading name, with the majority of products being exclusively developed and sold as Duluth Trading branded merchandise.

The Company identifies its operating segments according to how its business activities are managed and evaluated. The Company continues to report one reportable external segment, consistent with the Company’s omnichannel business approach. The Company’s revenues generated outside the United States were insignificant.

The Company has two classes of authorized common stock: Class A common stock and Class B common stock. The rights of holders of Class A common stock and Class B common stock are identical, except for voting and conversion rights. Each share of Class A common stock is entitled to ten votes per share and is convertible at any time into one share of Class B common stock. Each share of Class B common stock is entitled to one vote per share. The Company’s Class B common stock trades on the NASDAQ Global Select Market under the symbol “DLTH.”

Basis of Presentation

B.    Basis of Presentation

The condensed consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The Company consolidates TRI Holdings, LLC (“TRI”) as a variable interest entity (see Note 6 “Variable Interest Entity” for further information). All significant intercompany balances and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on the Sunday nearest to January 31 of the following year. Fiscal 2023 is a 52-week period and ends on January 28, 2024. Fiscal 2022 was a 52-week period and ended on January 29, 2023. The three months of fiscal 2023 and fiscal 2022 represent the Company’s 13-week periods ended April 30, 2023 and May 1, 2022, respectively.

The accompanying condensed consolidated financial statements as of and for the three months ended April 30, 2023 and May 1, 2022 have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments (which are normal and recurring in nature) necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations as of and for the three months ended April 30, 2023 and May 1, 2022. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s annual report on Form 10-K for the fiscal year ended January 29, 2023.

Impairment Analysis

C.    Impairment Analysis

As of April 30, 2023 and for the three months ended, no triggering events or indicators of asset impairment were noted.

Inventory

D.    Inventory

Inventory, consisting of purchased product, is valued at the lower of cost or net realizable value, under the first-in, first-out method. The significant estimates used in inventory valuation are obsolescence (including excess and slow-moving inventory and lower of cost or market reserves) and estimates of inventory shrinkage. Both estimates have calculations that require the Company to make assumptions and apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. Inventory is adjusted periodically to reflect current market conditions, which requires management’s judgment that may significantly affect the ending inventory valuation, as well as gross margin.

The reserve for inventory shrinkage is adjusted to reflect the trend of historical physical inventory count results. The Company performs its retail store physical inventory counts in July and the difference between actual and estimated shrinkage, recorded in Cost of goods sold, may cause fluctuations in second fiscal quarter results.

Prepaid Expenses and Other Assets

E.    Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

	April 30, 2023		January 29, 2023
(in thousands)
Prepaid expenses & other current assets
Pending returns inventory, net	$	2,001	$	2,373
Current software hosting implementation costs, net		3,024		3,074
Other prepaid expenses		10,893		9,707
Prepaid expenses & other current assets	$	15,918	$	15,154
Other assets, net
Goodwill	$	402	$	402
Intangible assets, net		445		450
Non-current software hosting implementation costs		6,047		6,148
Other assets, net		1,697		1,727
Other assets, net	$	8,591	$	8,727

Seasonality of Business

F.    Seasonality of Business

The Company’s business is affected by the pattern of seasonality common to most apparel businesses. Historically, the Company has recognized a significant portion of its revenue and operating profit in the fourth fiscal quarter of each year due to increased sales during the holiday season.

Cash and Cash Equivalents

G.    Cash and Cash Equivalents

The Company considers short-term investments with original maturities of three months or less when purchased to be cash equivalents. Amounts receivable from credit card issuers are typically converted to cash within 2 to 4 days of the original sales transaction and are considered to be cash equivalents.

Reclassifications

H.    Reclassifications

Certain reclassifications have been made to the 2022 financial statements in order to conform to 2023 presentation. The Company reclassified $4.2 million and ($4.2) million from Property, Plant & Equipment and Prepaid Expenses, respectively, in the prior period. There were no changes to previously reported shareholders' equity, statement of cash flows or net income (loss) as a result of the reclassifications.

Significant Accounting Policies

I.    Significant Accounting PoliciesThere have been no significant changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended January 29, 2023.

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Nature of Operations and Basis of Presentation (Tables)

3 Months Ended

Apr. 30, 2023

Nature of Operations and Basis of Presentation [Abstract]

Schedule of Prepaid Expenses and Other Assets

	April 30, 2023		January 29, 2023
(in thousands)
Prepaid expenses & other current assets
Pending returns inventory, net	$	2,001	$	2,373
Current software hosting implementation costs, net		3,024		3,074
Other prepaid expenses		10,893		9,707
Prepaid expenses & other current assets	$	15,918	$	15,154
Other assets, net
Goodwill	$	402	$	402
Intangible assets, net		445		450
Non-current software hosting implementation costs		6,047		6,148
Other assets, net		1,697		1,727
Other assets, net	$	8,591	$	8,727

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Leases (Tables)

3 Months Ended

Apr. 30, 2023

Leases [Abstract]

Expense Components Leases Reflected Consolidated Statement of Operations

	Consolidated Statement	Three Months Ended
	of Operations	April 30, 2023		May 1, 2022
(in thousands)
Finance lease expenses
Amortization of right-of-use ‎assets	Selling, general and ‎administrative expenses	$	840	$	840
Interest on lease liabilities	Interest expense		438		466
Total finance lease expense		$	1,278	$	1,306
Operating lease expense	Selling, general and ‎administrative expenses	$	5,050	$	4,389
Amortization of build-to-suit ‎leases capital contribution	Selling, general and ‎administrative expenses		321		321
Variable lease expense	Selling, general and ‎administrative expenses		2,914		1,972
Total lease expense		$	9,563	$	7,988

Other Information Related to Leases

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$	694	$	664
Operating cash flows from finance leases	$	438	$	466
Operating cash flows from operating leases	$	5,135	$	4,439
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases		588		—
Weighted-average remaining lease term (in years):
Finance leases		11		12
Operating leases		8		8
Weighted-average discount rate:
Finance leases		4.4%		4.4%
Operating leases		4.1%		4.1%

Future Minimum Lease Payments Under Non-Cancellable Leases

Fiscal year	Finance		Operating
(in thousands)
2023 (remainder of fiscal year)	$	3,419	$	15,569
2024		4,736		20,313
2025		5,099		19,648
2026		3,993		18,795
2027		3,993		17,545
Thereafter		29,231		61,036
Total future minimum lease payments	$	50,471	$	152,906
Less – Discount		(10,898)		(23,174)
Lease liability	$	39,573	$	129,732

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Debt and Credit Agreement (Tables)

3 Months Ended

Apr. 30, 2023

Debt and Credit Agreement [Abstract]

Schedule of Debt

	April 30, 2023		January 29, 2023
(in thousands)
TRI Senior Secured Note	$	23,013	$	23,181
TRI Note		3,500		3,500
	$	26,513	$	26,681
Less: current maturities		787		768
TRI long-term debt	$	25,726	$	25,913

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Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Apr. 30, 2023

Accrued Expenses and Other Current Liabilities [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

	April 30, 2023		January 29, 2023
(in thousands)
Salaries and benefits	$	3,615	$	2,404
Deferred revenue		8,525		10,249
Freight		4,315		7,193
Product returns		4,259		5,168
Unpaid purchases of property & equipment		1,250		6,271
Accrued advertising		2,386		2,020
Other		6,571		7,510
Total accrued expenses and other current liabilities	$	30,921	$	40,815

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Fair Value (Tables)

3 Months Ended

Apr. 30, 2023

Fair Value [Abstract]

Amortized Cost, Fair Value, and Corresponding Amount of Gross Unrealized Gains and Losses Recognized in AOCI of Available-for-Sale Security

	April 30, 2023
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
(in thousands)
Level 1 security:
Money market funds	$	—	$	—	$	—	$	—
Level 3 security:
Corporate trust	$	5,693	$	—	$	(277)	$	5,416

	January 29, 2023
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
(in thousands)
Level 1 security:
Money market funds	$	25,031	$	—	$	—	$	25,031
Level 3 security:
Corporate trust	$	5,737	$	—	$	(198)	$	5,539

Future Principal Receipts Related to Available-For-Sale Security by Contractual Maturity

	Amortized		Estimated
	Cost		Fair Value
(in thousands)
Within one year	$	186	$	167
After one year through five years		1,236		1,146
After five years through ten years		1,872		1,783
After ten years		2,399		2,320
Total	$	5,693	$	5,416

Carrying Values and Fair Values of Other Financial Instruments in Consolidated Balance Sheets

	April 30, 2023				January 29, 2023
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
(in thousands)
TRI Long-term debt, including short-term portion	$	26,513	$	25,577	$	26,681	$	26,172

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Variable Interest Entity (Tables)

3 Months Ended

Apr. 30, 2023

Variable Interest Entity [Abstract]

Schedule Assets and Liabilities of Variable Interest Entity

	April 30, 2023		January 29, 2023
(in thousands)
Cash	$	26	$	20
Property and equipment, net		23,405		23,612
Total assets	$	23,431	$	23,632
Other current liabilities	$	136	$	161
Current maturities of long-term debt		787		768
TRI Long-term debt		25,726		25,913
Noncontrolling interest in VIE		(3,218)		(3,210)
Total liabilities and shareholders' equity	$	23,431	$	23,632

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Earnings Per Share (Tables)

3 Months Ended

Apr. 30, 2023

Earnings Per Share [Abstract]

Reconciliation of Numerator and Denominator of Basic and Diluted (Loss) Earnings Per Share

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands, except per share data)
Numerator - net loss attributable to ‎controlling interest	$	(3,869)	$	(1,294)
Denominator - weighted average shares ‎   (Class A and Class B)
Basic		32,865		32,714
Dilutive shares		—		—
Diluted		32,865		32,714
Earnings per share (Class A and Class B)
Basic	$	(0.12)	$	(0.04)
Diluted	$	(0.12)	$	(0.04)

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Stock-Based Compensation (Tables)

3 Months Ended

Apr. 30, 2023

Stock-Based Compensation [Abstract]

Summary of Activity in Unvested Restricted Stock

		Weighted
		average
		fair value
	Shares	per share
Outstanding at January 29, 2023	618,772	$	12.05
Granted	1,066,091		6.59
Vested	(119,825)		12.45
Forfeited	(8,556)		12.10
Outstanding at April 30, 2023	1,556,482	$	8.54

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Property and Equipment (Tables)

3 Months Ended

Apr. 30, 2023

Property and Equipment [Abstract]

Schedule of Property and Equipment

	April 30, 2023		January 29, 2023
(in thousands)
Land and land improvements	$	4,486	$	4,486
Leasehold improvements		50,793		49,450
Buildings		36,191		36,183
Vehicles		161		161
Warehouse equipment		25,962		25,951
Office equipment and furniture		53,763		53,713
Computer equipment		9,502		9,185
Software		36,878		36,260
		217,736		215,389
Accumulated depreciation and amortization		(125,431)		(118,989)
		92,305		96,400
Construction in progress		30,507		16,164
Property and equipment, net	$	122,812	$	112,564

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Revenue (Tables)

3 Months Ended

Apr. 30, 2023

Revenue [Abstract]

Sales Disaggregated Based Upon Sales Channel

	Three Months Ended
	April 30, 2023		May 1, 2022
(in thousands)
Direct-to-consumer	$	79,502	$	77,680
Stores		44,257		45,224
	$	123,759	$	122,904

Contract Assets and Liabilities on Consolidated Balance Sheets

	April 30, 2023		January 29, 2023
(in thousands)
Contract assets	$	2,001	$	2,373
Contract liabilities	$	8,525	$	10,249

Reconciliation of Contract Liability Related to Gift Cards

	April 30, 2023		May 1, 2022
(in thousands)
Balance as of beginning of period	$	10,249	$	10,791
Gift cards sold		1,878		1,909
Gift cards redeemed		(3,553)		(3,603)
Gift card breakage		(49)		(43)
Balance as of end of period	$	8,525	$	9,054

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Nature of Operations and Basis of Presentation (Narrative) (Details) $ in Thousands	3 Months Ended
	Apr. 30, 2023 USD ($) segment item	Jan. 29, 2023 USD ($)
Number of reportable segments | segment	1
Number of classes of authorized common stock | item	2
Common stock voting and conversion rights	Each share of Class A common stock is entitled to ten votes per share and is convertible at any time into one share of Class B common stock. Each share of Class B common stock is entitled to one vote per share.
Prepaid expenses	$ 15,918	$ 15,154
Property, plant and equipment	122,812	$ 112,564
Revision of Prior Period, Adjustment
Prepaid expenses	(4,200)
Property, plant and equipment	$ 4,200
Class A common stock [Member]
Number of votes per share | item	10
Class B common stock [Member]
Number of votes per share | item	1
Minimum [Member]
Period for amounts receivable from credit card issuers converted to cash	2 days
Maximum [Member]
Period for amounts receivable from credit card issuers converted to cash	4 days

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Nature of Operations and Basis of Presentation (Schedule of Prepaid Expenses and Other Assets) (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Prepaid Expenses and Other Assets [Abstract]
Pending returns inventory, net	$ 2,001	$ 2,373
Current software hosting implementation costs, net	3,024	3,074
Other prepaid expenses	10,893	9,707
Prepaid expenses & other current assets	15,918	15,154
Goodwill	402	402
Intangible assets, net	445	450
Non-current software hosting implementation costs	6,047	6,148
Other assets, net	1,697	1,727
Other assets, net	$ 8,591	$ 8,727

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Leases (Narrative) (Details) - USD ($)	Apr. 30, 2023	Jan. 29, 2023
Operating lease right-of-use assets	$ 128,436,000	$ 131,753,000
Operating lease liability	129,732,000
Accounting Standards Update 2016-02 (Topic 842) [Member]
Operating lease right-of-use assets	0
Operating lease liability	$ 0
Minimum [Member]
Store leases initial lease term	5 years
Maximum [Member]
Store leases initial lease term	15 years

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Leases (Expense Components Leases Reflected Consolidated Statement of Operations) (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Leases [Abstract]
Finance lease: Amortization of right-of-use assets	$ 840	$ 840
Finance lease: Interest on lease liabilities	438	466
Total finance lease expense	1,278	1,306
Operating lease expense	5,050	4,389
Amortization of build-to-suit leases capital contribution	321	321
Variable lease expense	2,914	1,972
Total lease expense	$ 9,563	$ 7,988

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Leases (Other Information Related To Leases) (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Financing cash flows from finance leases	$ 694	$ 664
Operating cash flows from finance leases	438	466
Operating cash flows from operating leases	5,135	$ 4,439
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$ 588
Weighted-average remaining lease term (in years):
Finance leases	11 years	12 years
Operating leases	8 years	8 years
Weighted-average discount rate:
Finance leases	4.40%	4.40%
Operating leases	4.10%	4.10%

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Leases (Future Minimum Lease Payments Under Non-Cancellable Leases) (Details) $ in Thousands	Apr. 30, 2023 USD ($)
Finance
2023 (remainder of fiscal year)	$ 3,419
2024	4,736
2025	5,099
2026	3,993
2027	3,993
Thereafter	29,231
Total future minimum lease payments	50,471
Less – Discount	(10,898)
Lease liability	39,573
Operating
2023 (remainder of fiscal year)	15,569
2024	20,313
2025	19,648
2026	18,795
2027	17,545
Thereafter	61,036
Total future minimum lease payments	152,906
Less – Discount	(23,174)
Lease liability	$ 129,732

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Debt and Credit Agreement (Narrative) (Details) - USD ($) $ in Millions		3 Months Ended
	May 14, 2021	Apr. 30, 2023	Jul. 07, 2022
TRI Senior Secured Note [Member]
Debt Instrument [Line Items]
Debt, original balance		$ 26.7
Debt instrument, maturity date		Oct. 15, 2038
Debt instrument stated percentage interest rate		4.95%
TRI Note [Member]
Debt Instrument [Line Items]
Debt, original balance		$ 3.5
TRI note maturity date		2038-11
Debt instrument stated percentage interest rate		3.05%
New Credit Agreement [Member] | Revolving Senior Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity	$ 150.0		$ 150.0
Line of credit maturity date		May 14, 2026
New Credit Agreement [Member] | Standby Letter of Credit [Member]
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity	5.0
New Credit Agreement [Member] | Swing Line Loans [Member]
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity	$ 10.0
First Amendment [Member] | Revolving Senior Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility maximum borrowing capacity		$ 200.0
Minimum [Member] | New Credit Agreement [Member] | Bloomberg Short-Term Bank Yield Index Rate [Member] | Revolving Senior Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate, basis spread	1.25%
Minimum [Member] | New Credit Agreement [Member] | Base Rate [Member] | Revolving Senior Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate, basis spread	0.25%
Maximum [Member] | New Credit Agreement [Member] | Bloomberg Short-Term Bank Yield Index Rate [Member] | Revolving Senior Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate, basis spread	2.00%
Maximum [Member] | New Credit Agreement [Member] | Base Rate [Member] | Revolving Senior Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate, basis spread	1.00%

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Debt and Credit Agreement (Schedule of Debt) (Details) - TRI Long-term Debt [Member] - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Debt Instrument [Line Items]
Debt	$ 26,513	$ 26,681
Less: current maturities	787	768
Long-term debt	25,726	25,913
TRI Senior Secured Note [Member]
Debt Instrument [Line Items]
Debt	23,013	23,181
TRI Note [Member]
Debt Instrument [Line Items]
Debt	$ 3,500	$ 3,500

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Accrued Expenses and Other Current Liabilities (Schedule of Accrued Expenses and Other Current Liabilities) (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Accrued Expenses and Other Current Liabilities [Abstract]
Salaries and benefits	$ 3,615	$ 2,404
Deferred revenue	8,525	10,249
Freight	4,315	7,193
Product returns	4,259	5,168
Unpaid purchases of property & equipment	1,250	6,271
Accrued advertising	2,386	2,020
Other	6,571	7,510
Total accrued expenses and other current liabilities	$ 30,921	$ 40,815

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Fair Value (Narrative) (Details) - USD ($)	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Available For Sale Securities [Abstract]
Other-than-temporary impairment	$ 0	$ 0

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Fair Value (Amortized Cost, Fair Value, and Corresponding Amount of Gross Unrealized Gains and Losses Recognized in AOCI of Available-for-Sale Security) (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Debt Securities, Available-for-sale [Line Items]
Estimated Fair Value	$ 5,416	$ 5,539
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]
Debt Securities, Available-for-sale [Line Items]
Cost or Amortized Cost		25,031
Estimated Fair Value		25,031
Fair Value, Inputs, Level 3 [Member] | Corporate Trust [Member]
Debt Securities, Available-for-sale [Line Items]
Cost or Amortized Cost	5,693	5,737
Gross Unrealized Losses	(277)	(198)
Estimated Fair Value	$ 5,416	$ 5,539

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Fair Value (Future Principal Receipts Related to Available-For-Sale Security by Contractual Maturity) (Details) $ in Thousands	Apr. 30, 2023 USD ($)
Available For Sale Securities [Abstract]
Amortized Cost, Within one year	$ 186
Amortized Cost, After one year through five years	1,236
Amortized Cost, After five years through ten years	1,872
Amortized Cost, After ten years	2,399
Amortized Cost, Total	5,693
Estimated Fair Value, Within one year	167
Estimated Fair Value, After one year through five years	1,146
Estimated Fair Value, After five years through ten years	1,783
Estimated Fair Value, After ten years	2,320
Estimated Fair Value, Total	$ 5,416

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Fair Value (Carrying Values and Fair Values of Other Financial Instruments in Consolidated Balance Sheets) (Details) - TRI Debt [Member] - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Reported Value Measurement [Member]
Long-term debt, including short-term portion, Carrying Amount	$ 26,513	$ 26,681
Estimate of Fair Value Measurement [Member]
Long-term debt, including short-term portion, Fair Value	$ 25,577	$ 26,172

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Variable Interest Entity (Narrative) (Details) $ in Millions	3 Months Ended
	Apr. 30, 2023 USD ($) entity	Jan. 29, 2023 entity
Variable Interest Entities [Line Items]
Number of variable interest entity | entity	1	1
TRI Holdings, LLC [Member]
Variable Interest Entities [Line Items]
Amount invested in a trust | $	$ 6.3

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Variable Interest Entity (Schedule Assets and Liabilities of Variable Interest Entity) (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Variable Interest Entity [Line Items]
Property and equipment, net	$ 122,812	$ 112,564
Total assets	488,399	527,454
Noncontrolling interest in VIE	(3,218)	(3,210)
Total liabilities and shareholders' equity	488,399	527,454
Wisconsin [Member] | TRI Holdings, LLC [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Cash	26	20
Property and equipment, net	23,405	23,612
Total assets	23,431	23,632
Other current liabilities	136	161
Current maturities of long-term debt	787	768
TRI long-term debt	25,726	25,913
Noncontrolling interest in VIE	(3,218)	(3,210)
Total liabilities and shareholders' equity	$ 23,431	$ 23,632

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Earnings Per Share (Narrative) (Details) - shares shares in Millions	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Unvested Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of (loss) earnings per share amount	0.3	0.2

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Earnings Per Share (Reconciliation of Numerator and Denominator of Basic and Diluted (Loss) Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Earnings Per Share [Abstract]
Net loss attributable to controlling interest	$ (3,869)	$ (1,294)
Basic weighted average shares	32,865	32,714
Diluted weighted average shares	32,865	32,714
Earnings per share (Class A and Class B), Basic	$ (0.12)	$ (0.04)
Earnings per share (Class A and Class B), Diluted	$ (0.12)	$ (0.04)

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Stock-Based Compensation (Narrative) (Details) - Unvested Restricted Stock [Member] - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense	$ 1.0	$ 0.6
Unrecognized compensation expense	$ 10.9
Unrecognized compensation expense, weighted average recognition period	2 years 10 months 24 days

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Stock-Based Compensation (Summary of Activity in Unvested Restricted Stock) (Details) - Unvested Restricted Stock [Member]	3 Months Ended
	Apr. 30, 2023 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, shares | shares	618,772
Granted | shares	1,066,091
Vested | shares	(119,825)
Forfeited | shares	(8,556)
Ending balance, shares | shares	1,556,482
Weighted average fair value per share, beginning balance | $ / shares	$ 12.05
Weighted average fair value per share, Granted | $ / shares	6.59
Weighted average fair value per share, Vested | $ / shares	12.45
Weighted average fair value per share, Forfeited | $ / shares	12.10
Weighted average fair value per share, ending balance | $ / shares	$ 8.54

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Property and Equipment (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023
Property, Plant and Equipment [Line Items]
Property and equipment	$ 217,736	$ 215,389
Accumulated depreciation and amortization	(125,431)	(118,989)
Property and equipment net excluding construction in progress	92,305	96,400
Construction in progress	30,507	16,164
Property and equipment, net	122,812	112,564
Land and Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	4,486	4,486
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	50,793	49,450
Buildings [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	36,191	36,183
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	161	161
Warehouse Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	25,962	25,951
Office Equipment and Furniture [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	53,763	53,713
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	9,502	9,185
Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 36,878	$ 36,260

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Revenue (Sales Disaggregated Based Upon Sales Channel) (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 123,759	$ 122,904
Direct-to-Consumer [Member]
Disaggregation of Revenue [Line Items]
Revenue	79,502	77,680
Stores [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 44,257	$ 45,224

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Revenue (Contract Assets and Liabilities on Consolidated Balance Sheets) (Details) - USD ($) $ in Thousands	Apr. 30, 2023	Jan. 29, 2023	May 01, 2022	Jan. 30, 2022
Revenue [Abstract]
Contract assets	$ 2,001	$ 2,373
Contract liabilities	$ 8,525	$ 10,249	$ 9,054	$ 10,791

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Revenue (Reconciliation of Contract Liability Related to Gift Cards) (Details) - USD ($) $ in Thousands	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Balance as of Beginning of Period	$ 10,249	$ 10,791
Balance as of End of Period	8,525	9,054
Gift Cards Sold [Member]
Increase (decrease) in gift cards	1,878	1,909
Gift Cards Redeemed [Member]
Increase (decrease) in gift cards	(3,553)	(3,603)
Gift Card Breakage [Member]
Increase (decrease) in gift cards	$ (49)	$ (43)

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Income Taxes (Narrative) (Details)	3 Months Ended
	Apr. 30, 2023	May 01, 2022
Income Taxes [Abstract]
Effective tax rate related to controlling interest	27.00%	25.00%