10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended May 4, 2024

OR

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

Commission File Number: 01-34219

DESTINATION XL GROUP, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	04-2623104
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
555 Turnpike Street Canton, MA	02021
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (781) 828-9300

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

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	DXLG	The Nasdaq Stock Market LLC

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 ☒ No ☐

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 ☒ No ☐

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	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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. ☐

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

As of May 15, 2024, the registrant had 58,228,053 shares of common stock, $0.01 par value per share, outstanding.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

DESTINATION XL GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	May 4, 2024			February 3, 2024
	(Fiscal 2024)			(Fiscal 2023)
ASSETS
Current assets:
Cash and cash equivalents	$	16,328		$	27,590
Short-term investments		36,891			32,459
Accounts receivable		881			3,920
Inventories		91,238			80,968
Prepaid expenses and other current assets		9,557			8,308
Total current assets		154,895			153,245
Non-current assets:
Property and equipment, net of accumulated depreciation and amortization		44,325			43,238
Operating lease right-of-use assets		155,591			138,118
Deferred income taxes, net of valuation allowance		20,181			21,533
Intangible assets		1,150			1,150
Other assets		485			457
Total assets	$	376,627		$	357,741
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	28,483		$	17,353
Accrued expenses and other current liabilities		23,827			35,302
Operating leases, current		34,644			37,221
Total current liabilities		86,954			89,876
Long-term liabilities:
Operating leases, non-current		134,583			117,316
Other long-term liabilities		1,540			1,596
Total long-term liabilities		136,123			118,912
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued		—			—
Common stock, $0.01 par value, 125,000,000 shares authorized, 79,299,215 and 79,033,378 shares issued at May 4, 2024 and February 3, 2024, respectively		793			790
Additional paid-in capital		326,214			325,202
Treasury stock at cost, 21,094,463 shares at May 4, 2024 and 21,041,661 shares at February 3, 2024		(130,348	)		(130,137	)
Accumulated deficit		(43,109	)		(46,902	)
Total stockholders' equity		153,550			148,953
Total liabilities and stockholders' equity	$	376,627		$	357,741

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

2

DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	For the Three Months Ended
	May 4, 2024		April 29, 2023
	(Fiscal 2024)		(Fiscal 2023)
Sales	$	115,489	$	125,442
Cost of goods sold including occupancy costs		59,807		64,526
Gross profit		55,682		60,916
Expenses:
Selling, general and administrative		47,523		48,281
Depreciation and amortization		3,278		3,477
Total expenses		50,801		51,758
Operating income		4,881		9,158
Interest income, net		570		339
Income before provision for income taxes		5,451		9,497
Provision for income taxes		1,658		2,530
Net income	$	3,793	$	6,967
Net income per share - basic	$	0.07	$	0.11
Net income per share - diluted	$	0.06	$	0.11
Weighted-average number of common shares outstanding:
Basic		58,036		62,690
Diluted		60,963		66,316

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

3

DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	For the Three Months Ended
	May 4, 2024		April 29, 2023
	(Fiscal 2024)		(Fiscal 2023)
Net income	$	3,793	$	6,967
Other comprehensive income before taxes:
Retirement plans		—		66
Other comprehensive income before taxes		—		66
Tax effect related to items of other comprehensive income		—		(17	)
Other comprehensive income, net of tax		—		49
Comprehensive income	$	3,793	$	7,016

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

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DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

						Additional
	Common Stock					Paid-in			Treasury Stock						Accumulated
	Shares			Amounts		Capital			Shares			Amounts			Deficit			Total
Balance at February 3, 2024		79,033		$	790	$	325,202			(21,041	)	$	(130,137	)	$	(46,902	)	$	148,953
Board of directors' compensation		18			1		111			—			—			—			112
Stock compensation expense		—			—		875			—			—			—			875
Issuance of common stock, upon RSUs release		129			1		(1	)		—			—			—			—
Shares withheld for taxes related to net share settlement		(14	)		—		(48	)		—			—			—			(48	)
Exercise of stock options		132			1		75			—			—			—			76
Repurchase of common stock		—			—		—			(53	)		(211	)		—			(211	)
Net income		—			—		—			—			—			3,793			3,793
Balance at May 4, 2024		79,298		$	793	$	326,214			(21,094	)	$	(130,348	)	$	(43,109	)	$	153,550

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

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DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)

																			Accumulated
							Additional												Other
	Common Stock						Paid-in			Treasury Stock						Accumulated			Comprehensive
	Shares			Amounts			Capital			Shares			Amounts			Deficit			Loss			Total
Balance at January 28, 2023		78,230		$	782		$	321,516			(15,625	)	$	(105,386	)	$	(74,756	)	$	(4,928	)	$	137,228
Board of directors' compensation		15			—			108			—			—			—			—			108
Stock compensation expense		—			—			404			—			—			—			—			404
Restricted stock units (RSUs) granted for achievement of performance-based compensation, reclassified from liability to equity		—			—			1,146			—			—			—			—			1,146
Issuance of common stock, upon RSUs release		251			3			(3	)		—			—			—			—			—
Shares withheld for taxes related to net share settlement		(81	)		(1	)		(445	)		—			—			—			—			(446	)
Exercise of stock options		81			1			215			—			—			—			—			216
Other comprehensive income, net of taxes		—			—			—			—			—			—			49			49
Net income		—			—			—			—			—			6,967			—			6,967
Balance at April 29, 2023		78,496		$	785		$	322,941			(15,625	)	$	(105,386	)	$	(67,789	)	$	(4,879	)	$	145,672

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

6

DESTINATION XL GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	May 4, 2024			April 29, 2023
	(Fiscal 2024)			(Fiscal 2023)
Cash flows from operating activities:
Net income	$	3,793		$	6,967
Adjustments to reconcile net income to net cash used for operating activities:
Amortization of deferred debt issuance costs		19			19
Gain from the sale of equipment		(4	)		(96	)
Depreciation and amortization		3,278			3,477
Deferred taxes, net of valuation allowance		1,352			2,383
Stock compensation expense		875			404
Board of directors' stock compensation		112			108
Changes in operating assets and liabilities:
Accounts receivable		2,702			534
Inventories		(10,270	)		(7,254	)
Prepaid expenses and other current assets		(1,249	)		(495	)
Other assets		(47	)		(5	)
Accounts payable		11,130			(1,669	)
Operating leases, net		(2,783	)		(1,950	)
Accrued expenses and other liabilities		(10,033	)		(6,657	)
Net cash used for operating activities		(1,125	)		(4,234	)
Cash flows from investing activities:
Additions to property and equipment, net		(5,863	)		(1,709	)
Proceeds from sale of equipment		4			96
Purchase of short-term investments		(10,003	)		(16,064	)
Maturity of short-term investments		5,908			—
Net cash used for investing activities		(9,954	)		(17,677	)
Cash flows from financing activities:
Repurchase of common stock		(211	)		—
Tax withholdings paid related to net share settlements		(48	)		(446	)
Proceeds from the exercise of stock options		76			216
Net cash used for financing activities		(183	)		(230	)
Net decrease in cash and cash equivalents		(11,262	)		(22,141	)
Cash and cash equivalents:
Beginning of period		27,590			52,074
End of period	$	16,328		$	29,933
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for income taxes	$	104			—
Cash paid during the period for interest	$	90		$	62
Non-cash activity during the period:
Capital expenditures incurred but not yet paid	$	841		$	126

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

7

DESTINATION XL GROUP, INC.

Notes to Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

In the opinion of management of Destination XL Group, Inc., a Delaware corporation (collectively with its subsidiaries, referred to as the “Company”), the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary for a fair presentation of the interim financial statements. These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with the notes to the Company’s audited Consolidated Financial Statements for the fiscal year ended February 3, 2024 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 21, 2024.

The information set forth in these statements may be subject to normal year-end adjustments. The information reflects all adjustments that, in the opinion of management, are necessary to present fairly the Company’s results of operations, financial position and cash flows for the periods indicated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s business historically has been seasonal in nature, and the results of the interim periods presented are not necessarily indicative of the results to be expected for the full year.

The Company’s fiscal year is a 52- or 53- week period ending on the Saturday closest to January 31. Fiscal 2024 is a 52-week period ending on February 1, 2025 and fiscal 2023 was a 53-week period ending on February 3, 2024.

Segment Information

The Company has two principal operating segments: its stores and its direct business. The Company considers its stores and direct operating segments to be similar in terms of economic characteristics, production processes and operations, and has therefore aggregated them into one reportable segment, retail segment, consistent with its omni-channel business approach.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash in banks and short-term investments, which have a maturity of ninety days or less when acquired. Included in cash equivalents are credit card and debit card receivables from banks, which generally settle within two to four business days.

Short-Term Investments

Short-term investments consist of those investments that have a maturity date, when acquired, that is greater than three months and twelve months or less. These investments are classified as held-to-maturity and are carried at amortized cost, which approximates fair value due to the short period between purchase and maturity.

Concentration of Credit Risk

Cash and cash equivalents include amounts due from third party financial institutions, which from time to time, may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company is potentially exposed to a concentration of credit risk when cash and cash equivalent deposits in these financial institutions are in excess of FDIC limits. The Company considers the credit risk associated with these financial instruments to be minimal as cash and cash equivalents are held by financial institutions with high credit ratings and it has not historically sustained any credit losses associated with its cash and cash equivalents balances. In addition, the Company's cash and cash equivalents include money market accounts with Citizens Bank, N.A. and investments in U.S. government-backed securities held with Fidelity Investments.

Fair Value of Financial Instruments

ASC Topic 825, Financial Instruments, requires disclosure of the fair value of certain financial instruments. ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements.

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The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy:

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

Level 2 – Observable inputs other than Level 1 prices 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 related 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 assets or liabilities.

The Company utilizes observable market inputs (quoted market prices) when measuring fair value whenever possible.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short maturity of these instruments. See Note 9 - Fair Value Measurement for information regarding the fair value of certain financial assets.

Accumulated Other Comprehensive Income (Loss) - (“AOCI”)

In the fourth quarter of fiscal 2023, the Company terminated its frozen retirement plans, which was the only AOCI activity. As a result, there is no remaining AOCI as of February 3, 2024.

For the first three months of fiscal 2023, other comprehensive income and reclassifications from AOCI was as follows:

	April 29, 2023
For the three months ended:	(in thousands)
	Retirement Plans
Balance at beginning of the quarter	$	(4,928	)
Other comprehensive income before    reclassifications, net of taxes		6
Amounts reclassified from accumulated other    comprehensive income, net of taxes (1)		43
Other comprehensive income for the period		49
Balance at end of quarter	$	(4,879	)

(1)Includes the amortization of the unrecognized loss on retirement plans, which was charged to “Selling, General and Administrative” Expense on the Consolidated Statements of Operations for all periods presented. The Company recognized expense of $58,000, or $43,000 net of taxes, for the three months ended April 29, 2023.

Stock-based Compensation

All share-based payments, including grants of employee stock options and restricted stock, are recognized as an expense in the Consolidated Statements of Operations based on their fair values and vesting periods. The fair value of stock options is determined using the Black-Scholes valuation model and requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (the “expected term”), the estimated volatility of the Company’s common stock price over the expected term and the number of options that will ultimately not complete their vesting requirements (“forfeitures”). The Company reviews its valuation assumptions at each grant date and, as a result, is likely to change its valuation assumptions used to value employee stock-based awards granted in future periods. The values derived from using the Black-Scholes model are recognized as an expense over the vesting period, net of estimated forfeitures. The estimation of stock-based awards

9

that will ultimately vest requires judgment. Actual results and future changes in estimates may differ from the Company’s current estimates.

There were no grants of stock options in the first three months of fiscal 2024. For the first three months of fiscal 2023, the fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model based on the assumptions in the table below as it relates to stock options granted.

	April 29, 2023
Expected volatility	86.3% - 92.1%
Risk-free interest rate	3.71%-4.42%
Expected term	2.5 yrs.
Dividend rate		—
Weighted average fair value of options granted	$	3.24

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for events or changes in circumstances that might indicate the carrying amount of the assets may not be recoverable. The Company’s judgment regarding the identification of impairment indicators is based on operational performance at the store level. Factors considered by the Company that could result in an impairment triggering event include significant changes in the use of assets, a current period operating or cash flow loss, underperformance of a store relative to historical or expected operating results, and an accumulation of costs significantly in excess of the amount originally expected for the construction of the long-lived store assets. The Company assesses the recoverability of the assets by determining whether the carrying value of such assets over their respective remaining lives can be recovered through projected undiscounted future cash flows. The model for undiscounted future cash flows includes assumptions, at the individual store level, with respect to expectations for future sales and gross margin rates as well as an estimate for occupancy costs used to estimate the fair value of the respective store’s operating lease right-of-use asset. The amount of impairment, if any, is measured based on projected discounted future cash flows using a discount rate reflecting the Company’s average cost of funds.

There were no impairments or non-cash gains recognized in the first three months of fiscal 2024 and fiscal 2023.

Advertising Costs

The Company expenses in-store advertising costs as incurred. Creative production costs, if any, are expensed in the period in which the advertising is first aired, and media costs are expensed as incurred. Direct response advertising costs, if any, are expensed in the period in which the mailing occurs. Advertising expense, which is included in selling, general and administrative expenses, was $7.3 million and $7.0 million for the first three months of fiscal 2024 and fiscal 2023, respectively.

Leases

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments, initial direct costs and any lease incentives are included in the value of those ROU assets. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, based on information available at the lease measurement date, to determine the present value of future payments. The Company elected the lessee non-lease component separation practical expedient, which permits the Company to not separate non-lease components from the lease components to which they relate. The Company also made an accounting policy election that the recognition requirement of ASC 842 will not be applied to certain, if any, non-store leases, with a term of 12 months or less, recognizing those lease payments on a straight-line basis over the lease term. At May 4, 2024, the Company had no short-term leases.

The Company’s store leases typically contain options that permit renewals for additional periods of up to five years each. In general, for store leases with an initial term of 10 years or more, the options to extend are not considered reasonably certain at lease commencement. For store leases with an initial term of 5 years, the Company evaluates each lease independently and, when the Company considers it reasonably certain that it will exercise an option to extend, the associated payment of that option will be included in the measurement of the ROU asset and lease liability. Renewal options are not included in the lease term for automobile and equipment leases because they are not considered reasonably certain of being exercised at lease commencement. Renewal options were not considered for the Company’s corporate headquarters and distribution center lease, which was entered into in 2006 and was for an initial 20-year term. At the end of the initial term, the Company will have the opportunity to extend this lease for six additional successive periods of five years.

For store leases, the Company accounts for lease components and non-lease components as a single lease component. Certain store leases may require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, and are expensed as incurred as variable lease costs. Other store leases contain one periodic fixed lease payment that

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includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the ROU assets and lease liabilities. Tenant allowances are included as an offset to the right-of-use asset and amortized as reductions to rent expense over the associated lease term.

See Note 4, "Leases" for additional information.

Recently Issued Accounting Pronouncements - Not Yet Adopted

In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X: Income or Loss Applicable to Common Stock, which amends or supersedes various SEC paragraphs within the Accounting Standards Codification to conform to past SEC announcements and guidance issued by the SEC. The ASU does not provide any new guidance, and as such, there is no transition effective date. ASU 2023-03 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative. ASU-2023-06 incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K. The amendments will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. The ASU is not expected to have a material impact on our consolidated financial statements or related disclosures because the Company is currently subjected to the reporting requirements of Regulations S-X and S-K.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which requires all public entities to provide enhanced disclosures about significant segment expenses. The amendments in this ASU are to be applied retrospectively and are effective for our annual financial statements starting in fiscal 2024 and interim periods starting in fiscal 2025, with early adoption permitted. We are currently evaluating the impact of this accounting standard.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosures. This ASU will be effective for fiscal year 2025, and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. We are currently evaluating the effect of adopting this new accounting standard.

In March 2024, the FASB issued ASU 2024-01 Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, which clarified how an entity determines whether a profits interest or similar award is within the scope of Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation, by adding illustrative guidance. The guidance in ASU 2024-01 is effective for annual reporting periods beginning after December 15, 2024, and can be applied either retrospectively to all prior periods presented in the consolidated financial statements or prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. Early adoption is permitted. The adoption of ASU 2024-01 is not expected to have any impact on the Company’s consolidated financial statements.

There were no other new accounting pronouncements, issued or effective during the first three months of fiscal 2024, which had or are expected to have a significant impact on the Company’s Consolidated Financial Statements.

2. Revenue Recognition

The Company operates as a retailer of big and tall men’s clothing, which includes stores and direct. Revenue is recognized by the operating segment that initiates a customer’s order. Store sales are defined as sales that originate and are fulfilled directly at the store level. Direct sales are defined as sales that originate online, including those initiated online at the store level, on its website or on third-party marketplaces. Generally, all revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration in exchange for those goods. Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included as part of accrued expenses on the Consolidated Balance Sheets.

Unredeemed Gift Cards, Gift Certificates, and Credit Vouchers. Upon issuance of a gift card, gift certificate, or credit voucher, a liability is established for its cash value. The liability is relieved and net sales are recorded upon redemption by the customer. Based on historical redemption patterns, the Company can reasonably estimate the amount of gift cards, gift certificates, and credit vouchers for which redemption is remote, which is referred to as “breakage.” Breakage is recognized over two years in proportion to historical redemption trends and is recorded as sales in the Consolidated Statements of Operations. The gift card liability, net of breakage, was $2.4 million and $3.2 million at May 4, 2024 and February 3, 2024, respectively.

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Unredeemed Loyalty Coupons. The Company offers a free loyalty program to its customers for which points accumulate based on the purchase of merchandise. Under ASC 606, Revenue from Contracts with Customers, these loyalty points provide the customer with a material right and a distinct performance obligation with revenue deferred and recognized when the points are expected to redeem or expire. The cycle of earning and redeeming loyalty points is generally under one year in duration. The loyalty accrual, net of breakage, was $1.4 million and $1.7 million at May 4, 2024 and February 3, 2024, respectively.

Shipping. Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales for all periods presented. Amounts related to shipping and handling that are billed to customers are recorded in sales, and the related costs are recorded in cost of goods sold, including occupancy costs, in the Consolidated Statements of Operations.

Disaggregation of Revenue

As noted above under Segment Information in Note 1, the Company’s business consists of one reportable segment, its retail segment. Substantially all of the Company’s revenue is generated from its stores and direct businesses. Accordingly, the Company has determined that the following sales channels depict the nature, amount, timing, and uncertainty of how revenue and cash flows are affected by economic factors:

	For the Three Months Ended
(in thousands)	May 4, 2024			April 29, 2023
Store sales	$	80,848	70.0%	$	87,297	69.6%
Direct sales		34,641	30.0%		38,145	30.4%
Total sales	$	115,489		$	125,442

3. Debt

Credit Agreement with Citizens Bank, N.A.

The Company has a credit facility with Citizens Bank, N.A, which provides for a $125.0 million secured, asset-based credit facility with a maturity date of October 28, 2026 (the "Credit Facility"). The maximum committed borrowing of $125.0 million includes a sublimit of $20.0 million for commercial and standby letters of credit and a sublimit of up to $15.0 million for swing line loans. The Company’s ability to borrow under the Credit Facility is determined using an availability formula based on eligible assets.

Borrowings under the Credit Facility bear interest at either a Base Rate loan or Daily Simple SOFR rate, at the Company's option. Base Rate loans will bear interest at a rate equal to (i) the greater of: (a) the Prime Rate, (b) the Federal Funds effective rate plus 0.50% per annum and (c) the Daily Simple SOFR rate plus 1.00% per annum (provided the Base Rate shall never be less than the Floor (as defined in the Credit Facility)), plus (ii) a varying percentage, based on the Company’s average excess availability, of either 0.25% or 0.50% (the “Applicable Margin”). Daily Simple SOFR loans will bear interest at a rate equal to (i) the Daily Simple SOFR rate plus an adjustment of 0.10% (provided the Daily Simple SOFR rate shall never be less than the Floor), plus (ii) the Applicable Margin. Any swingline loan will continue to bear interest at a rate equal to the Base Rate plus the Applicable Margin. The Company is subject to an unused line fee of 0.25%.

The Company’s obligations under the Credit Facility are secured by a lien on substantially all of its assets. If the Company’s availability under the Credit Facility at any time is less than the greater of (i) 10% of the Revolving Loan Cap (the lesser of the aggregate revolving commitments or the borrowing base) and (ii) $7.5 million, then the Company is required to maintain a minimum consolidated fixed charge coverage ratio of 1.0:1.0 until such time as availability has exceeded the greater of (1) 10% of the Revolving Loan Cap and (2) $7.5 million for 30 consecutive days.

At May 4, 2024, the Company had no borrowings outstanding under the Credit Facility and unused availability was $79.2 million. The Company had no borrowings during the first quarter of fiscal 2024, resulting in an average unused excess availability of approximately $71.8 million. Outstanding standby letters of credit were $4.3 million and outstanding documentary letters were $1.5 million at May 4, 2024. At May 4, 2024, the Company’s prime-based interest rate was 8.75%.

4. Leases

The Company leases all of its store locations and its corporate headquarters, which also includes its distribution center, under operating leases. The store leases typically have initial terms of 5 years to 10 years, with options that usually permit renewal for additional five-year periods. The initial term of the lease for the corporate headquarters is for 20 years, with the opportunity to extend for six additional consecutive periods of five years, beginning in fiscal 2026. The Company also leases certain equipment and other assets under operating leases, typically with initial terms of 3 to 5 years. The Company is generally obligated for the cost of property taxes, insurance and common area maintenance fees relating to its leases, which are considered variable lease costs and are expensed as incurred.

ASC 842 requires the assessment of any lease modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied. Lease modification accounting requires the recalculation of the ROU asset, lease

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liability and lease expense over the respective lease term. As of May 4, 2024, the Company’s operating leases liabilities represent the present value of the remaining future minimum lease payments updated based on concessions and lease modifications.

Lease costs related to store locations are included in cost of goods sold including occupancy costs on the Consolidated Statements of Operations, and expenses and lease costs related to the corporate headquarters and equipment leases are included in selling, general and administrative expenses on the Consolidated Statements of Operations.

The following table is a summary of the Company’s components of net lease cost for the three months ended May 4, 2024 and April 29, 2023:

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands)
Operating lease cost	$	11,477	$	10,666
Variable lease costs(1)		3,393		3,166
Total lease costs	$	14,870	$	13,832

(1)Variable lease costs include the cost of property taxes, insurance and common area maintenance fees related to leases.

Supplemental cash flow and balance sheet information related to leases for the first three months ended May 4, 2024 and April 29, 2023 was as follows:

(dollars in thousands)	For the three months ended
Cash paid for amounts included in the measurement of lease liabilities:	May 4, 2024			April 29, 2023
Operating cash flows for operating leases (1)	$	12,966		$	12,753
Non-cash operating activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	26,370		$	9,250
Weighted average remaining lease term	5.2 yrs.			4.3 yrs.
Weighted average discount rate		6.45	%		6.39	%

(1)The cash paid for the first three months of fiscal 2024 and fiscal 2023 included prepaid rent of $4.3 million and $4.2 million, respectively.

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the Consolidated Balance Sheet as of May 4, 2024:

(in thousands)
2024 (remaining)	$	31,965
2025		47,074
2026		35,037
2027		28,001
2028		19,978
Thereafter		39,695
Total minimum lease payments	$	201,750
Less: amount of lease payments representing interest		32,523
Present value of future minimum lease payments	$	169,227
Less: current obligations under leases		34,644
Long-term lease obligations	$	134,583

As of May 4, 2024, the Company had entered into four ten-year store leases that have not yet commenced with aggregated estimated future lease payments of approximately $6.3 million, which are not included in the above table. The leases are expected to commence during the second and third quarters of fiscal 2024.

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5. Long-Term Incentive Plans

The following is a summary of the Company’s Long-Term Incentive Plan (“LTIP”). All equity awards granted under long-term incentive plans are issued from the Company’s stockholder-approved 2016 Incentive Compensation Plan. See Note 6, Stock-Based Compensation.

The LTIPs are granted annually and each LTIP covers a three-year performance period. Each participant in the LTIP participates based on that participant’s “Target Cash Value” which is defined as the participant’s annual base salary (on the participant’s effective date) multiplied by his or her LTIP percentage. Under each LTIP, 50% of each participant’s Target Cash Value is subject to time-based vesting and 50% is subject to performance-based vesting. Awards for any achievement of performance targets are not granted until the performance targets are achieved and then are subject to additional vesting through August 31 following the end of the applicable performance period.

2021-2023 LTIP

The performance targets for the Company’s 2021-2023 LTIP were approved by the Compensation Committee of the Board of Directors (the "Compensation Committee”) on March 8, 2021, and covered a three-year period performance period, which ended on February 3, 2024. The time-vested portion of the 2021-2023 LTIP vests in four annual installments, with the remaining installment vesting on April 1, 2025.

On March 29, 2024, the Compensation Committee approved a grant of awards, effective April 1, 2024, equal to $3.0 million for the achievement of the performance target for the 2021-2023 LTIP. In an effort to preserve share availability under the 2016 Plan, all awards, which are subject to further vesting through August 31, 2024, were granted in cash.

Active LTIPs

At May 4, 2024, the Company had three active LTIPs: the 2022-2024 LTIP, the 2023-2025 LTIP and the 2024-2026 LTIP. The time-based awards under each LTIP were granted in a combination of 50% RSUs and 50% cash.

Performance targets for the 2022-2024 LTIP, the 2023-2025 LTIP and the 2024-2026 LITP were established and approved by the Compensation Committee on April 9, 2022, May 1, 2023 and April 1, 2024, respectively. The performance period for each LTIP is three years. Awards for any achievement of performance targets will not be granted until the performance targets are achieved and then will be subject to an additional service requirement through August 31, 2025, August 31, 2026 and August 31, 2027, respectively. The time-based awards under the 2022-2024 LTIP, the 2023-2025 LTIP, and the 2024-2026 LTIP vest in four equal installments through April 1, 2026, April 1, 2027 and April 1, 2028, respectively. Assuming that the Company achieves the performance targets at target levels and all time-based awards vest, the compensation expense associated with the 2022-2024 LTIP, 2023-2025 LTIP and 2024-2026 LTIP is estimated to be approximately $4.8 million, $5.1 million and $5.3 million, respectively. Approximately half of the compensation expense for each LTIP relates to the time-based awards, which are being expensed straight-line over 48 months, 47 months and 49 months, respectively.

At May 4, 2024, the Company had accrued $1.4 million under the 2022-2024 LTIP and $0.1 million under the 2024-2026 LTIP for the performance awards. At May 4, 2024, the Company had no accrual for the performance-based awards under the 2023-2025 LTIP.

6. Stock-Based Compensation

The Company has one active stock-based compensation plan: the 2016 Incentive Compensation Plan (as amended, the “2016 Plan”). A grant of a stock option award or stock appreciation right will reduce the outstanding reserve on a one-for-one basis, meaning one share for every share granted. A grant of a full-value award, including, but not limited to, restricted stock, restricted stock units and deferred stock, will reduce the outstanding reserve by a fixed ratio of 1.9 shares for every share granted. At May 4, 2024, 15,120,538 shares were authorized under the 2016 Plan, of which 1,445,584 shares remained available for grant.

In accordance with the terms of the 2016 Plan, any shares outstanding under the previous 2006 Incentive Compensation Plan (the “2006 Plan”) at August 4, 2016 that subsequently terminate, expire or are cancelled for any reason without having been exercised or paid are added back and become available for issuance under the 2016 Plan, with stock options being added back on a one-for-one basis and full-value awards being added back on a 1 to 1.9 basis. At May 4, 2024, 59,254 stock options remained outstanding under the 2006 Plan.

The 2016 Plan is administered by the Compensation Committee. The Compensation Committee is authorized to make all determinations with respect to amounts and conditions covering awards. Options are not granted at a price less than fair value on the date of the grant. Except with respect to 5% of the shares available for awards under the 2016 Plan, no award will become exercisable unless such award has been outstanding for a minimum period of one year from its date of grant.

The following tables summarize the share activity and stock option activity for the first three months of fiscal 2024:

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	RSUs (1)			Deferred shares (2)		Performance Share Units (3)		Fully-Vested  Shares (4)			Total number of shares			Weighted- average grant-date fair value
Shares
Outstanding non-vested shares at beginning of year		536,285			435,568		573,000		—			1,544,853		$	3.53
Shares granted		376,416			8,713		—		9,734			394,863		$	3.58
Shares vested and/or issued		(129,112	)		—		—		(9,734	)		(138,846	)	$	4.67
Shares expired		—			—		—		—			—		$	—
Shares forfeited		—			—		—		—			—		$	—
Outstanding non-vested shares at end of quarter		783,589			444,281		573,000		—			1,800,870		$	3.46

(1)During the first three months of fiscal 2024, the Company granted time-based RSUs under its 2024-2026 LTIP. See Note 5, Long-Term Incentive Plans. As a result of net share settlements, of the 129,112 RSUs that vested, 115,292 shares of common stock were issued.

(2)The 8,713 shares of deferred stock, with a fair value of $36,246 represent director compensation in lieu of cash, in accordance with the director's irrevocable election. The shares of deferred stock will be issued upon the director's separation from service.

(3)On August 11, 2023, the Company granted 573,000 performance share units ("PSUs") in connection with the extension of Mr. Kanter's employment agreement. The award consists of nine tranches, with the first tranche vesting if and when the 30-day volume-weighted closing price of the Company's common stock is equal to or greater than $6.50 per share. Each subsequent tranche will vest upon achievement of the 30-day volume-weighted closing price of the Company's common stock in $0.25 increments with the ninth tranche vesting when such price is equal to or greater than $8.50 per share. The PSUs are subject to a one-year minimum vesting period, and any unvested PSUs will expire on August 11, 2026. The $2.4 million fair value is being expensed over the respective derived service periods of each tranche which range from 12 to 13 months. The respective fair value and derived service periods assigned to the PSUs were determined using a Monte Carlo model based on: a weighted historical volatility of 57.8%, a term of 3 years, stock price on the date of grant of $4.98 per share, a risk-free rate of 4.6% and a cost of equity of 11.0%.

(4)Represented compensation, with a fair value of $40,493, to certain directors, who are required to receive shares, in lieu of cash, in order to satisfy their minimum equity ownership under the Non-Employee Director Compensation Plan. Voluntary shares received, in lieu of cash, are reported below under Non-Employee Director Compensation Plan.

	Number of shares			Weighted- average exercise price per option		Weighted- average remaining contractual term		Aggregate intrinsic value (000's)
Stock Options
Outstanding options at beginning of year		3,180,739		$	0.75		—	$	10,962
Options granted		—			—		—		—
Options exercised		(132,397	)	$	0.58		—		388
Options expired		(16,233	)	$	5.29		—		—
Options forfeited		(1,715	)	$	0.75		—		5
Outstanding options at end of quarter		3,030,394		$	0.73	6.3 years		$	7,761
Options exercisable at end of quarter		2,790,202		$	0.73	6.2 years		$	7,158

For the first three months of fiscal 2024, the Company granted 376,416 restricted stock units, 8,713 shares of deferred stock and 9,734 fully-vested shares. For the first three months of fiscal 2023, the Company granted stock options to purchase an aggregate of 1,316 shares of common stock, 270,867 restricted stock units and 2,844 fully-vested shares.

Non-Employee Director Compensation Plan

The Company granted 8,412 shares of common stock, with a fair value of approximately $34,994, to certain of its non-employee directors as compensation in lieu of cash in the first three months of fiscal 2024. These shares are in addition to any shares that may be granted under the 2016 Plan related to the requirement to receive equity if a director has not yet satisfied his or her minimum equity ownership requirement under the Non-Employee Director Compensation Plan.

Stock Compensation Expense

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The Company recognized total stock-based compensation expense of $0.9 million and $0.4 million for the first three months of fiscal 2024 and fiscal 2023, respectively. The total compensation cost related to time-vested stock options, RSU awards, and PSU awards not yet recognized as of May 4, 2024 was approximately $3.9 million, net of estimated forfeitures, which will be expensed over a weighted average remaining life of 30 months.

7. Equity and Earnings per Share

The following table provides a reconciliation of the number of shares outstanding for basic and diluted earnings per share:

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands)
Common stock outstanding:
Basic weighted average common shares outstanding		58,036		62,690
Common stock equivalents – stock options, restricted stock units and deferred stock		2,927		3,626
Diluted weighted average common shares outstanding		60,963		66,316

The following potential common stock equivalents were excluded from the computation of diluted earnings per share in each period, because the exercise price of such options was greater than the average market price per share of common stock for the respective periods or because the unearned compensation associated with stock options or restricted stock units had an anti-dilutive effect.

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands, except exercise prices)
Stock options		73		17
Restricted stock units and deferred stock		545		9
Range of exercise prices of such options	$4.48-$6.59		$4.48 - $7.43

The above options, which were outstanding at May 4, 2024, expire from June 1, 2024 to March 20, 2033.

Excluded from the computation of basic and diluted earnings per share were 573,000 shares for the first quarter of fiscal 2024. These performance-based awards will be included in the computation of basic and diluted earnings per share if, and when, the respective performance targets are achieved. In addition, 444,281 shares and 435,568 shares of deferred stock at May 4, 2024 and April 29, 2023, respectively, were excluded from the computation of basic earnings per share. Shares of deferred stock are not considered issued and outstanding until the vesting date of the deferral period.

8. Income Taxes

The Company's tax provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Each quarter, the Company updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision.

For the first quarter of fiscal 2024 and 2023, the Company’s effective tax rate was 30.4% and 26.6%, respectively. The increase in the effective tax rate was primarily due to permanent book to tax differences combined with a lower pretax income as compared to the first quarter of fiscal 2023.

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9. Fair Value Measurement

At May 4, 2024 and February 3, 2024, the Company held U.S. treasury bills which were classified as held-to maturity and carried at amortized cost.
 

			Fair Value
(in thousands)	Carrying value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At May 4, 2024:
Short-term investments		36,891		36,869		—		—
At February 3, 2024:
Cash equivalents		6,047		6,052		—		—
Short-term investments		32,459		32,479		—		—

10. Stock Repurchase Program

On March 14, 2023, the Company's Board of Directors (“Board”) approved a stock repurchase program, effective March 16, 2023, which was subsequently amended in November 2023. Under the amended program, the Company was authorized to repurchase up to $25.0 million of its common stock, including excise tax, through open market and privately negotiated transactions.

During the first quarter of fiscal 2024, the Company repurchased 52,802 shares at a total cost, including fees, of $211,182, completing its stock repurchase program.

The Inflation Reduction Act of 2022 imposed a nondeductible 1% excise tax on the net value of certain share repurchases made after December 31, 2022. Beginning in fiscal year 2023, the applicable excise tax is being charged to additional paid-in capital in the Company's Consolidated Balance Sheet as part of the cost basis of the shares repurchased, with the corresponding liability for the excise tax payable recorded in accrued expenses and other current liabilities until paid. This liability is partially offset by a 1% credit permitted under the rules for the fair value of shares issued by the Company. At May 4, 2024, the Company had accrued $0.2 million for the payment of excise taxes.

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

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect” or “anticipate” or the negatives thereof, variations thereon or similar terminology. The forward-looking statements contained in this Quarterly Report are generally located in the material set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but may be found in other locations as well, and include statements regarding our long-range strategic plan and the expected impact of our strategic initiatives on future growth, including with respect to raising brand awareness, store development, website replatform and future alliances and collaborations; expected marketing costs, gross margin rates and expected capital expenditures in 2024; and expected changes in our store portfolio and long-term plans for new or relocated stores. These forward-looking statements generally relate to plans and objectives for future operations and are based upon management’s reasonable estimates of future results or trends. The forward-looking statements in this Quarterly Report should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited Consolidated Financial Statements and notes to those statements included elsewhere in this Quarterly Report and our audited Consolidated Financial Statements for the year ended February 3, 2024, included in our Annual Report on Form 10-K for the year ended February 3, 2024, as filed with the Securities and Exchange Commission on March 21, 2024 (our “Fiscal 2023 Annual Report”).

Numerous factors could cause our actual results to differ materially from such forward-looking statements. This discussion sets forth certain risks and uncertainties that may have an impact on future results and direction of our Company, including, without limitation, risks related to changes in consumer spending in response to economic factors; the impact of inflation with rising costs and high interest rates; the Israel-Hamas conflict and the ongoing Russian invasion of Ukraine on the global economy; potential labor shortages; and the Company’s ability to execute on its marketing, digital, store and collaboration strategies, ability to grow its market share, predict customer tastes and fashion trends, forecast sales growth trends and compete successfully in the United States men’s big and tall apparel market, and the other risks and uncertainties set forth in the “Risk Factors” section in Part I, Item 1A of our Fiscal 2023 Annual Report.

All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. These forward-looking statements speak only as of the date of the document in which they are made. We disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances in which the forward-looking statement is based.

BUSINESS SUMMARY

Destination XL Group, Inc., together with our consolidated subsidiaries (the “Company”), is the largest specialty retailer of big and tall men’s clothing with retail and direct operations in the United States. We operate under the trade names of Destination XL®, DXL®, DXL Outlets, Casual Male XL® and Casual Male XL Outlets. At May 4, 2024, we operated 233 Destination XL stores, 15 DXL outlet stores, 17 Casual Male XL retail stores, 19 Casual Male XL outlet stores and a digital business, including an e-commerce site at dxl.com and a mobile site, m.destinationXL.com, mobile app and third-party marketplaces.

Unless the context indicates otherwise, all references to “we,” “our,” “us” and “the Company” refer to Destination XL Group, Inc. and our consolidated subsidiaries. We refer to our fiscal years, which end on February 1, 2025, February 3, 2024 and January 28, 2023 as "fiscal 2024", “fiscal 2023,” and “fiscal 2022” respectively. Fiscal 2024 is a 52-week period, fiscal 2023 was a 53-week period and fiscal 2022 a was a 52-week period.

SEGMENT REPORTING

We currently have two principal operating segments: our stores and direct business. We consider our stores and direct business segments to be similar in terms of economic characteristics, production processes and operations, and have therefore aggregated them into one reportable segment, retail segment, consistent with our omni-channel business approach.

COMPARABLE SALES

Our customer’s shopping experience continues to evolve across multiple channels, and we are continually adapting to meet the guest’s needs. The majority of our stores have the capability of fulfilling online orders if merchandise is not available in the warehouse. As a result, certain transactions that begin online but are ultimately completed at the store level. Similarly, if a customer visits a store and the item is out of stock, the associate can order the item through our website. A customer also has the ability to order online and

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pick-up in a store and at curbside. We define store sales as sales that originate and are fulfilled directly at the store level. Digital commerce sales, which we also refer to as direct sales, are defined as sales that originate online, whether through our website, at the store level or through a third-party marketplace.

Stores that have been open for at least 13 months are included in comparable sales. Stores that have been remodeled or relocated during the period are also included in our determination of comparable stores sales. Stores that have been expanded by more than 25% are considered non-comparable for the first 13 months. If a store is temporarily closed for more than 7 days, it is removed from the calculation of comparable sales until it reopens and upon its anniversary is once again removed from the calculation until the reopen date. The method of calculating comparable sales varies across the retail industry and, as a result, our calculation of comparable sales is not necessarily comparable to similarly titled measures reported by other retailers.

EXECUTIVE SUMMARY

	For the three months ended
	May 4, 2024			April 29, 2023
(in millions, except percentage of sales and per share data)
Sales	$	115.5		$	125.4
Net income	$	3.8		$	7.0
Adjusted EBITDA (Non-GAAP basis)	$	8.2		$	12.6
Gross margin. as a percentage of sales		48.2	%		48.6	%
SG&A expenses, as a percentage of sales		41.1	%		38.5	%
Adjusted EBITDA margin (Non-GAAP basis)		7.1	%		10.1	%
Per diluted share:
Net income	$	0.06		$	0.11

Our sales for the first quarter of fiscal 2024 were below our expectations. We believe that many of our customers are still feeling the economic impacts of high inflation and have chosen to moderate their discretionary spending on apparel. This behavior resulted in lower than expected traffic levels to our stores and lower conversion rates in our direct business, both of which were the primary contributors to our comparable sales decrease of 11.3% in the first quarter. Comparable sales for our stores were down 11.4% and our direct business was down 11.0%. Despite these economic impacts on our top line, we are still maintaining our low promotional stance and proactively managing our inventory levels and receipts. This enabled us to end the quarter in a strong margin position, with our merchandise margin improvement nearly mitigating the deleveraging of occupancy costs. This gross margin performance, coupled with our lower SG&A expenses, enabled us to end the first quarter of fiscal 2024 with net income of $0.06 per diluted share and an adjusted EBITDA margin (a non-GAAP measure) of 7.1%.

We continued to maintain our strong financial position, successfully managing our liquidity and our inventory levels, which are down 9.0% to last year's first quarter. Our inventory turn has improved by almost 30% from fiscal 2019 and our clearance inventory remains below our 10% benchmark.

As of May 4, 2024, we had cash and investments of $53.2 million as compared to $46.0 million at April 29, 2023 with no debt outstanding and unused excess availability of $79.2 million. With cash on hand, no outstanding debt and full availability under our credit facility, we are continuing to pursue our strategic initiatives this year to grow our business.

Progress on Our Long-Range Plan and Future Growth Strategy

We continue to make progress on our long-term strategic growth initiatives and believe that these initiatives will lead to greater brand awareness, enabling us to take a greater share of the addressable market, and grow our top line:

Marketing & Brand Building: Working with our newly retained creative and media agencies, we have developed a campaign that we believe will drive an emotional connection to the DXL brand and drive brand awareness. Subsequent to the end of the first quarter of fiscal 2024, on May 13th, we launched our new multichannel marketing campaign in three test markets. This is our first advertising campaign since 2017. Media includes broadcast television, connected TV, streaming video, audio, paid digital channels, and out-of-home, as well as all-owned marketing. We are prepared to invest cautiously in this initiative, with total marketing costs increasing to approximately 7.0%-7.5% of sales in fiscal 2024. If we experience favorable results, we plan to fund our marketing and brand building initiative at greater levels over time.

Store Development: While we have stores in every major metropolitan market across the United States, there are geographic voids in certain markets where big + tall consumers are not being served by a DXL store. Our consumer research has indicated that 44% of big + tall men self-reported they do not shop with us because a store is not near them, while 35% self-reported that they do not shop with us because a store location is not convenient. During the first quarter of fiscal 2024, we opened our first of eight stores that we plan to open in fiscal 2024, with 15 new stores per year planned in fiscal 2025 through 2027.

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New Website Platform: We are transitioning our website from our legacy infrastructure to a new, modern commerce platform, with various features and functionality launching in a phased approach with the first phase launching the last week of May 2024. A second phase is scheduled to launch in late summer with the final phase occurring after the holiday season. We believe this upgrade will provide immediate performance improvements and customer experience benefits by eliminating friction points, optimizing search capability, and enhancing speed and response times. We expect this new platform, engineered by a leading eCommerce technology provider, will position us to respond faster and more effectively to make changes in the future.

Alliances & Collaborations: Collaborating with other retailers allows us to overcome the challenge of reaching consumers who may never be exposed to the DXL brand through our organic channels. On April 29th, we announced our latest collaboration with Nordstrom which will allow us to bring the DXL experience beyond our four walls and directly to the Nordstrom customer. We are very excited to be launching DXL on Nordstrom's digital marketplace platform. We are currently in discovery mode for collaborative offers with several other brands and we are optimistic that some of these brands could play a role in our assortment, similar to the collaboration with UNTUCKIT.

RESULTS OF OPERATIONS

Sales

The following table presents sales by segment for the three months ended May 4, 2024 and April 29, 2023:

	For the Three Months Ended
(in thousands)	May 4, 2024			April 29, 2023
Store sales	$	80,848	70.0%	$	87,297	69.6%
Direct sales		34,641	30.0%		38,145	30.4%
Total sales	$	115,489		$	125,442

Total sales for the first quarter of fiscal 2024 were $115.5 million, as compared to $125.4 million in the first quarter of fiscal 2023. Comparable sales for the first quarter decreased 11.3% with comparable sales from our stores down 11.4% and our direct business down 11.0%. The decrease in comparable store sales was slightly offset by an increase in non-comparable sales of $1.8 million and a $3.0 million shift in calendar weeks due to the 53rd week in fiscal 2023.

The decrease in comparable sales during the first quarter was primarily driven by a decrease in traffic in our stores. While traffic was down, our three new stores that opened in fiscal 2023 in Queens, New York, Cincinnati, Ohio, and Pasadena, California all drove strong dollars per transaction and new-to-file rates that were approximately three times the chain average during the first quarter of 2024. The eleven Casual Male stores that were converted to DXL in fiscal 2023 also performed stronger than the chain average, with comparable sales approximately flat. The decrease in our direct business was primarily driven by a decrease in conversion rates.

Gross Margin Rate

For the first quarter of fiscal 2024, our gross margin rate, inclusive of occupancy costs, was 48.2% as compared to a gross margin rate of 48.6% for the first quarter of fiscal 2023.

Our gross margin rate decreased by 40-basis points, with an increase of 175-basis points in occupancy costs primarily due to the deleveraging of sales and increased rents as a result of lease extensions, which was partially offset by an increase in merchandise margin of 135-basis points. The improvement in merchandise margin of 135-basis points was due to a shift in merchandise mix, favorable shipping costs and a reduction in loyalty expense and marketplace commissions.

For 2024, we expect gross margin rates to be approximately 30- to 50-basis points lower than fiscal 2023 and reflect some occupancy deleveraging due to lower sales expectations.

Selling, General and Administrative Expenses

As a percentage of sales, SG&A (selling, general and administrative) expenses for the first quarter of fiscal 2024 were 41.1% as compared to 38.5% for the first quarter of fiscal 2023. On a dollar basis, SG&A expenses decreased by $0.8 million for the first quarter of fiscal 2024 as compared to the first quarter of fiscal 2023. The decrease was primarily due to a decrease in store payroll and performance-based incentive accruals, partially offset by an increase in advertising costs and operating costs to support our long-range growth initiatives.

Marketing costs were 6.3% of sales for the first quarter of fiscal 2024 as compared to 5.5% of sales for the first quarter of fiscal 2023. For fiscal 2024, marketing costs are expected to be approximately 7.0%-7.5% of sales.

Management views SG&A expenses through two primary cost centers: Customer Facing Costs and Corporate Support Costs. Customer Facing Costs, which include store payroll, marketing and other store and direct operating costs, represented 23.0% of sales in the first quarter of fiscal 2024 as compared to 21.1% of sales in the first quarter of fiscal 2023. Corporate Support Costs,

20

which include the distribution center and corporate overhead costs, represented 18.1% of sales in the first quarter of fiscal 2024 as compared to 17.4% of sales in the first quarter of fiscal 2023.

Depreciation and Amortization

Depreciation and amortization for the first quarter of fiscal 2024 decreased to $3.3 million as compared to $3.5 million for the first quarter of fiscal 2023. The decrease was due to a lower depreciable cost base, especially from our store assets, due to our limited capital spending since fiscal 2020. Our capital expenditures have increased as we have started to open new store locations and are investing in certain other infrastructure and technology projects.

Interest Income, Net

Net interest income for the first quarter of fiscal 2024 was $0.6 million, as compared to $0.3 million for the first quarter of fiscal 2023. Interest income was earned from investments in U.S. government-backed investments and money market accounts. Interest costs for both periods were immaterial because we had no outstanding debt and no borrowings under our credit facility during either period.

Income Taxes

Our tax provision for income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any. Each quarter, we update our estimate of the annual effective tax rate and make a year-to-date adjustment to the provision.

For the first quarter of fiscal 2024 and fiscal 2023, our effective tax rate was 30.4% and 26.6%, respectively. The increase in the effective tax rate was primarily due to permanent book to tax differences combined with a lower pretax income as compared to the first quarter of fiscal 2023.

Net Income

For the first quarter of fiscal 2024, we recorded net income of $3.8 million, or $0.06 per diluted share, as compared to net income of $7.0 million, or $0.11 per diluted share, for the first quarter of fiscal 2023. The decrease in earnings was driven by the decrease in sales, which was partially offset by improvement in merchandise margin and lower selling, general and administrative expenses.

Inventory

As of May 4, 2024, our inventory decreased by approximately $9.0 million to $91.2 million, as compared to $100.3 million at April 29, 2023. We continue to take proactive measures to manage our inventory and adjust our receipt plan given the ongoing macroeconomic factors affecting consumer spending. At May 4, 2024, our clearance inventory was 9.7% of our total inventory, as compared to 7.8% at April 29, 2023 and still below our historical benchmark of approximately 10.0%. Our inventory turnover rate has improved by almost 30% from fiscal 2019.

SEASONALITY

Historically, and consistent with the retail industry, we have experienced seasonal fluctuations as it relates to our operating income, net income, and free cash flow. Traditionally, a significant portion of our operating income, net income, and free cash flow is generated in the second and fourth quarters. Our inventory is typically at peak levels by the end of the third quarter, which represents a significant use of cash, which is then relieved in the fourth quarter as we sell-down our inventory through the holiday shopping season.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are our cash and cash equivalents, short-term investments, cash generated from operations and availability under our credit facility, which is discussed below. At May 4, 2024, we had no outstanding debt, including no borrowings under our credit facility during the first three months of fiscal 2024. Cash that is in excess of our forecasted needs may be invested in money market accounts and U.S. government-backed securities.

We believe that our cash and cash equivalent balances, short-term investments, cash generated from operations, and borrowings available to us under our credit facility will be adequate to meet our liquidity needs and capital expenditure requirements for at least the next 12 months. However, we remain cautious regarding the effect that the current macroeconomic conditions may have on consumer spending, including inflation, high interest costs, and other geopolitical conflicts around the world. We also believe that cash flows from operating activities and cash on hand will be sufficient to satisfy our current capital requirements. In the longer term, to the extent future capital requirements exceed cash on hand plus cash flows from operating activities, we anticipate that working capital will be financed by our credit facility.

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For the first three months of fiscal 2024, cash flow from operations was $(1.1) million as compared to $(4.2) million for the first three months of fiscal 2023. Free cash flow, a non-GAAP measure, was $(7.0) million for the first three months of fiscal 2024 as compared to $(5.9) million for the first three months of fiscal 2023. The decrease in free cash flow was primarily due to an increase in capital expenditures primarily related to the store openings as well as due to a decrease in operating income.

Cash flow used for investing activities decreased by $7.7 million for the first three months of fiscal 2024 as compared to the first three months of fiscal 2023, primarily due to a net decrease in short-term investment activity, partially offset by an increase in capital expenditures.

Stock Repurchase Program

In March 2023, the Company’s Board of Directors approved a stock repurchase program, which was subsequently amended in November 2023. Under the stock repurchase program, as amended, the Company was authorized to repurchase up to $25.0 million of its common stock through open market and privately negotiated transactions.

During the first quarter of fiscal 2024, we repurchased 52,802 shares at a total cost, including fees, of $211,182, completing the stock repurchase program.

Credit Facility

The Company has a $125.0 million revolving credit agreement with Citizens Bank, N.A., with a maturity date of October 28, 2026 (the "Credit Facility"). The Credit Facility includes a sublimit of $20.0 million for commercial and standby letters of credit and a sublimit of up to $15.0 million for swingline loans. Borrowings under the Credit Facility bear interest at either a Base Rate loan or Daily Simple SOFR rate, at the Company's option. Base Rate loans will bear interest at a rate equal to (i) the greater of: (a) the Prime Rate, (b) the Federal Funds effective rate plus 0.50% per annum and (c) the Daily Simple SOFR rate plus 1.00% per annum (provided the Base Rate shall never be less than the Floor (as defined in the Credit Facility)), plus (ii) a varying percentage, based on the Company’s average excess availability, of either 0.25% or 0.50% (the “Applicable Margin”). Daily Simple SOFR loans will bear interest at a rate equal to (i) the Daily Simple SOFR rate plus an adjustment of 0.10% (provided the Daily Simple SOFR rate shall never be less than the Floor), plus (ii) the Applicable Margin. Any swingline loan will continue to bear interest at a rate equal to the Base Rate plus the Applicable Margin. We are subject to an unused line fee of 0.25%.

We had no outstanding borrowings under the Credit Facility at May 4, 2024 and no borrowings during the first three months of fiscal 2024. At May 4, 2024, outstanding standby letters of credit were $4.3 million and outstanding documentary letters of credit were $1.5 million. The average unused excess availability during the first three months of fiscal 2024 was approximately $71.8 million and the unused excess availability at May 4, 2024 was $79.2 million.

Capital Expenditures

The following table sets forth the open stores and related square footage at May 4, 2024 and April 29, 2023, respectively:

	May 4, 2024				April 29, 2023
Store Concept	Number of Stores		Square Footage		Number of Stores		Square Footage
(square footage in thousands)
DXL Retail		233		1,732		218		1,663
DXL Outlets		15		76		16		80
Casual Male XL Retail		17		55		28		92
Casual Male Outlets		19		57		19		57
Total Stores		284		1,920		281		1,892

During the first quarter of fiscal 2024, we opened a new DXL store in Coon Rapids, Minnesota. Subsequent to the end of the first quarter, we opened our second store in Thousand Oaks, California and expect to open six additional DXL stores by end of fiscal 2024. During fiscal 2024, we also plan to convert five Casual Male stores to the DXL store format and remodel five of our existing DXL stores. We expect our capital expenditures to range from $22.0 million to $25.0 million in fiscal 2024. Over the next three to five years, we believe we could potentially open approximately 50 net new DXL stores across the country, which could average 6,000 square feet or 300,000 sq. ft. in total, a 15% increase over our current square footage.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to the critical accounting policies and estimates disclosed in our Fiscal 2023 Annual Report. See Note 1 to the Consolidated Financial Statements included in this report for information on recent accounting pronouncements and changes in accounting principles.

Non-GAAP Financial Measures

Free cash flow, adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures. These non-GAAP measures are not presented in accordance with GAAP and should not be considered superior to or as a substitute for net income or cash flows from operating activities or any other measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, the non-GAAP measures presented in this Quarterly Report may not be comparable to similar measures used by other companies. We believe that inclusion of these non-GAAP measures helps investors gain a better understanding of our performance, especially when comparing such results to previous periods and that they are useful as an additional means for investors to evaluate our operating results, when reviewed in conjunction with our GAAP financial statements.

Reconciliations of these non-GAAP measures are presented in the following tables (certain columns may not foot due to rounding):

Free Cash Flow. We define free cash flow as cash flow from operating activities less capital expenditures. Free cash flow excludes the mandatory and discretionary repayment of debt. Free cash flow is a metric that management uses to monitor liquidity. Management believes this metric is important to investors because it demonstrates the Company's ability to strengthen liquidity while supporting its capital projects and new store growth. We expect to fund our ongoing capital expenditures with cash flow from operations.

The following table reconciles free cash flow:

	For the three months ended
(in millions)	May 4, 2024			April 29, 2023
Cash flow from operating activities (GAAP basis)	$	(1.1	)	$	(4.2	)
Capital expenditures		(5.9	)		(1.7	)
Free Cash Flow (non-GAAP basis)	$	(7.0	)	$	(5.9	)

Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization and is before impairment (gain) of assets, if any. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Sales. We believe that providing adjusted EBITDA and adjusted EBITDA margin is useful to investors in evaluating our performance and are key metrics to measure profitability and economic productivity. The following table reconciles adjusted EBITDA from net income and calculates adjusted EBITDA margin:

	For the three months ended
	May 4, 2024			April 29, 2023
(in millions)
Net income (GAAP basis)	$	3.8		$	7.0
Add back:
Provision for income taxes		1.7			2.5
Interest income, net		(0.6	)		(0.3	)
Depreciation and amortization		3.3			3.5
Adjusted EBITDA (non-GAAP basis)	$	8.2		$	12.6
Sales	$	115.5		$	125.4
Adjusted EBITDA margin (non-GAAP), as a percentage of sales		7.1	%		10.1	%

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

In the normal course of business, our financial position and results of operations are routinely subject to a variety of risks, including market risk associated with interest rate movements on borrowings. We regularly assess these risks and have established policies and business practices to protect against the adverse effects of these and other potential exposures.

There have not been any material changes to our interest rate previously disclosed in Part II, Item 7A of our Fiscal 2023 Annual Report.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

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As required by Rule 13a-15 under the Exchange Act, our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of May 4, 2024. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of May 4, 2024, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

We have not experienced any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended May 4, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

We are subject to various legal proceedings and claims that arise in the ordinary course of business. Management currently believes that the resolution of these matters will not have a material adverse impact on our future results of operations or financial position.

Item 1A. Risk Factors.

There have been no material changes to the risk factors as previously disclosed in Part I, Item 1A of our Fiscal 2023 Annual Report.

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

On March 14, 2023, the Company’s Board of Directors approved a stock repurchase program pursuant to which the Company was initially authorized to repurchase up to $15.0 million of its common stock through open market and privately negotiated transactions. The stock repurchase program was amended on November 15, 2023 to increase the amount authorized under the program from $15.0 million to $25.0 million. The Company completed the stock repurchase program in the first quarter of fiscal 2024.

Stock repurchase activity during the three months ended May 4, 2024 was as follows:

Period	(a) Total number of shares purchased		(b) Average price paid per share (1)		(c) Total number of shares purchased as part of publicly announced plan		(d) Approximate dollar value of shares that may yet be purchased under the plan (1)
February 4, 2024 to March 2, 2024		52,802	$	3.97		52,802	$	250,006
March 3, 2024 to April 6, 2024		—	$	—		—	$	250,006
April 7, 2024 to May 4, 2024		—	$	—		—	$	250,006
Total		52,802	$	3.97		52,802	$	250,006

(1) Average price paid per share and the approximate dollar value of shares that may yet be purchased under the plan excludes the accrual of excise tax.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the three months ended May 4, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).

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Item 6. Exhibits.

31.1	Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934*.
31.2	Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.*
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	Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Document.
104	Cover Page Interactive Data File – The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
	* Filed herewith.

26

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.

	DESTINATION XL GROUP, INC.
Date: May 30, 2024	By:	/s/ John F. Cooney
		John F. Cooney
		Senior Vice President, Chief Accounting Officer and Corporate Controller (Duly Authorized Officer and Chief Accounting Officer)

27

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Harvey S. Kanter, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Destination XL Group, Inc.;

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:	May 30, 2024	By:	/s/ Harvey S. Kanter
			Harvey S. Kanter
			Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Peter H. Stratton, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of Destination XL Group, Inc.;

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:	May 30, 2024	By:	/s/ Peter H. Stratton, Jr.
			Peter H. Stratton, Jr.
			Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION 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 Destination XL Group, Inc. (the “Company”) for the period ended May 4, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Harvey S. Kanter, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(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.

This certification is being furnished as an exhibit to the Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except to the extent that the Company specifically incorporates this certification by reference.

Date:	May 30, 2024	By:	/s/ Harvey S. Kanter
			Harvey S. Kanter
			Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION 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 Destination XL Group, Inc. (the “Company”) for the period ended May 4, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Peter H. Stratton, Jr., Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(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.

This certification is being furnished as an exhibit to the Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. This certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except to the extent that the Company specifically incorporates this certification by reference.

Date:	May 30, 2024	By:	/s/ Peter H. Stratton, Jr.
			Peter H. Stratton, Jr.
			Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	3 Months Ended
	May 04, 2024	May 15, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 04, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Trading Symbol	DXLG
Entity Registrant Name	DESTINATION XL GROUP, INC.
Entity Central Index Key	0000813298
Current Fiscal Year End Date	--02-01
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		58,228,053
Entity File Number	01-34219
Entity Tax Identification Number	04-2623104
Entity Address, Address Line One	555 Turnpike Street
Entity Address, City or Town	Canton
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02021
City Area Code	781
Local Phone Number	828-9300
Document Quarterly Report	true
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Security Exchange Name	NASDAQ
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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	May 04, 2024	Feb. 03, 2024
Current assets:
Cash and cash equivalents	$ 16,328	$ 27,590
Short-term investments	36,891	32,459
Accounts receivable	881	3,920
Inventories	91,238	80,968
Prepaid expenses and other current assets	9,557	8,308
Total current assets	154,895	153,245
Non-current assets:
Property and equipment, net of accumulated depreciation and amortization	44,325	43,238
Operating lease right-of-use assets	155,591	138,118
Deferred income taxes, net of valuation allowance	20,181	21,533
Intangible assets	1,150	1,150
Other assets	485	457
Total assets	376,627	357,741
Current liabilities:
Accounts payable	28,483	17,353
Accrued expenses and other current liabilities	23,827	35,302
Operating leases, current	34,644	37,221
Total current liabilities	86,954	89,876
Long-term liabilities:
Operating leases, non-current	134,583	117,316
Other long-term liabilities	1,540	1,596
Total long-term liabilities	136,123	118,912
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued
Common stock, $0.01 par value, 125,000,000 shares authorized, 79,299,215 and 79,033,378 shares issued at May 4, 2024 and February 3, 2024, respectively	793	790
Additional paid-in capital	326,214	325,202
Treasury stock at cost, 21,094,463 shares at May 4, 2024 and 21,041,661 shares at February 3, 2024	(130,348)	(130,137)
Accumulated deficit	(43,109)	(46,902)
Total stockholders' equity	153,550	148,953
Total liabilities and stockholders' equity	$ 376,627	$ 357,741

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Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares	May 04, 2024	Feb. 03, 2024
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	125,000,000	125,000,000
Common stock, shares issued	79,299,215	79,033,378
Treasury stock, shares	21,094,463	21,041,661

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Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Income Statement [Abstract]
Sales	$ 115,489	$ 125,442
Cost of goods sold including occupancy costs	59,807	64,526
Gross profit	55,682	60,916
Expenses:
Selling, general and administrative	47,523	48,281
Depreciation and amortization	3,278	3,477
Total expenses	50,801	51,758
Operating income	4,881	9,158
Interest income (expense), net	570	339
Income before provision (benefit) for income taxes	5,451	9,497
Provision (benefit) for income taxes	1,658	2,530
Net income	$ 3,793	$ 6,967
Net income per share - basic	$ 0.07	$ 0.11
Net income per share - diluted	$ 0.06	$ 0.11
Weighted-average number of common shares outstanding:
Basic	58,036	62,690
Diluted	60,963	66,316

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 3,793	$ 6,967
Other comprehensive income before taxes:
Retirement plans	0	66
Other comprehensive income before taxes	0	66
Tax effect related to items of other comprehensive income	0	(17)
Other comprehensive income, net of tax	0	49
Comprehensive income	$ 3,793	$ 7,016

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Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning Balance at Jan. 28, 2023	$ 137,228	$ 782	$ 321,516	$ (105,386)	$ (74,756)	$ (4,928)
Beginning Balance (in shares) at Jan. 28, 2023		78,230		(15,625)
Board of directors' compensation	108		108
Board of directors' compensation (in shares)		15
Stock compensation expense	404		404
Restricted stock units (RSUs) granted for achievement of performance-based compensation, reclassified from liability to equity	1,146		1,146
Issuance of common stock, upon RSUs release		$ 3	(3)
Issuance of common stock, upon RSUs release (in shares)		251
Shares withheld for taxes related to net share settlement	(446)	$ (1)	(445)
Shares withheld for taxes related to net share settlement (in shares)		(81)
Exercise of stock options	216	$ 1	215
Exercise of stock options (in shares)		81
Other comprehensive income, net of taxes	49					49
Net income	6,967				6,967
Ending Balance at Apr. 29, 2023	145,672	$ 785	322,941	$ (105,386)	(67,789)	$ (4,879)
Ending Balance (in shares) at Apr. 29, 2023		78,496		(15,625)
Beginning Balance at Feb. 03, 2024	148,953	$ 790	325,202	$ (130,137)	(46,902)
Beginning Balance (in shares) at Feb. 03, 2024		79,033		(21,041)
Board of directors' compensation	112	$ 1	111
Board of directors' compensation (in shares)		18
Stock compensation expense	875		875
Issuance of common stock, upon RSUs release		$ 1	(1)
Issuance of common stock, upon RSUs release (in shares)		129
Shares withheld for taxes related to net share settlement	(48)		(48)
Shares withheld for taxes related to net share settlement (in shares)		(14)
Exercise of stock options	76	$ 1	75
Exercise of stock options (in shares)		132
Repurchase of common stock	(211)			$ (211)
Repurchase of common stock (in shares)				(53)
Other comprehensive income, net of taxes	0
Net income	3,793				3,793
Ending Balance at May. 04, 2024	$ 153,550	$ 793	$ 326,214	$ (130,348)	$ (43,109)
Ending Balance (in shares) at May. 04, 2024		79,298		(21,094)

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Cash flows from operating activities:
Net income	$ 3,793	$ 6,967
Adjustments to reconcile net income to net cash used for operating activities:
Amortization of deferred debt issuance costs	19	19
Gain from the sale of equipment	(4)	(96)
Depreciation and amortization	3,278	3,477
Deferred taxes, net of valuation allowance	1,352	2,383
Stock compensation expense	875	404
Board of directors' stock compensation	112	108
Changes in operating assets and liabilities:
Accounts receivable	2,702	534
Inventories	(10,270)	(7,254)
Prepaid expenses and other current assets	(1,249)	(495)
Other assets	(47)	(5)
Accounts payable	11,130	(1,669)
Operating leases, net	(2,783)	(1,950)
Accrued expenses and other liabilities	(10,033)	(6,657)
Net cash used for operating activities	(1,125)	(4,234)
Cash flows from investing activities:
Additions to property and equipment, net	(5,863)	(1,709)
Proceeds from sale of equipment	4	96
Purchase of short-term investments	(10,003)	(16,064)
Maturity of short-term investments	5,908
Net cash used for investing activities	(9,954)	(17,677)
Cash flows from financing activities:
Repurchase of common stock	(211)
Tax withholdings paid related to net share settlements	(48)	(446)
Proceeds from the exercise of stock options	76	216
Net cash used for financing activities	(183)	(230)
Net decrease in cash and cash equivalents	(11,262)	(22,141)
Cash and cash equivalents:
Beginning of period	27,590	52,074
End of period	16,328	29,933
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for income taxes	104
Cash paid during the period for interest	90	62
Non-cash activity during the period:
Capital expenditures incurred but not yet paid	$ 841	$ 126

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 3,793	$ 6,967

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Insider Trading Arrangements	3 Months Ended
	May 04, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Basis of Presentation

3 Months Ended

May 04, 2024

Accounting Policies [Abstract]

Basis of Presentation

1. Basis of Presentation

In the opinion of management of Destination XL Group, Inc., a Delaware corporation (collectively with its subsidiaries, referred to as the “Company”), the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary for a fair presentation of the interim financial statements. These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with the notes to the Company’s audited Consolidated Financial Statements for the fiscal year ended February 3, 2024 included in the Company’s Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 21, 2024.

The information set forth in these statements may be subject to normal year-end adjustments. The information reflects all adjustments that, in the opinion of management, are necessary to present fairly the Company’s results of operations, financial position and cash flows for the periods indicated. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s business historically has been seasonal in nature, and the results of the interim periods presented are not necessarily indicative of the results to be expected for the full year.

The Company’s fiscal year is a 52- or 53- week period ending on the Saturday closest to January 31. Fiscal 2024 is a 52-week period ending on February 1, 2025 and fiscal 2023 was a 53-week period ending on February 3, 2024.

Segment Information

The Company has two principal operating segments: its stores and its direct business. The Company considers its stores and direct operating segments to be similar in terms of economic characteristics, production processes and operations, and has therefore aggregated them into one reportable segment, retail segment, consistent with its omni-channel business approach.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash in banks and short-term investments, which have a maturity of ninety days or less when acquired. Included in cash equivalents are credit card and debit card receivables from banks, which generally settle within two to four business days.

Short-Term Investments

Short-term investments consist of those investments that have a maturity date, when acquired, that is greater than three months and twelve months or less. These investments are classified as held-to-maturity and are carried at amortized cost, which approximates fair value due to the short period between purchase and maturity.

Concentration of Credit Risk

Cash and cash equivalents include amounts due from third party financial institutions, which from time to time, may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company is potentially exposed to a concentration of credit risk when cash and cash equivalent deposits in these financial institutions are in excess of FDIC limits. The Company considers the credit risk associated with these financial instruments to be minimal as cash and cash equivalents are held by financial institutions with high credit ratings and it has not historically sustained any credit losses associated with its cash and cash equivalents balances. In addition, the Company's cash and cash equivalents include money market accounts with Citizens Bank, N.A. and investments in U.S. government-backed securities held with Fidelity Investments.

Fair Value of Financial Instruments

ASC Topic 825, Financial Instruments, requires disclosure of the fair value of certain financial instruments. ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements.

The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy:

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

Level 2 – Observable inputs other than Level 1 prices 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 related 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 assets or liabilities.

The Company utilizes observable market inputs (quoted market prices) when measuring fair value whenever possible.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short maturity of these instruments. See Note 9 - Fair Value Measurement for information regarding the fair value of certain financial assets.

Accumulated Other Comprehensive Income (Loss) - (“AOCI”)

In the fourth quarter of fiscal 2023, the Company terminated its frozen retirement plans, which was the only AOCI activity. As a result, there is no remaining AOCI as of February 3, 2024.

For the first three months of fiscal 2023, other comprehensive income and reclassifications from AOCI was as follows:

	April 29, 2023
For the three months ended:	(in thousands)
	Retirement Plans
Balance at beginning of the quarter	$	(4,928	)
Other comprehensive income before    reclassifications, net of taxes		6
Amounts reclassified from accumulated other    comprehensive income, net of taxes (1)		43
Other comprehensive income for the period		49
Balance at end of quarter	$	(4,879	)

(1)Includes the amortization of the unrecognized loss on retirement plans, which was charged to “Selling, General and Administrative” Expense on the Consolidated Statements of Operations for all periods presented. The Company recognized expense of $58,000, or $43,000 net of taxes, for the three months ended April 29, 2023.

Stock-based Compensation

All share-based payments, including grants of employee stock options and restricted stock, are recognized as an expense in the Consolidated Statements of Operations based on their fair values and vesting periods. The fair value of stock options is determined using the Black-Scholes valuation model and requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (the “expected term”), the estimated volatility of the Company’s common stock price over the expected term and the number of options that will ultimately not complete their vesting requirements (“forfeitures”). The Company reviews its valuation assumptions at each grant date and, as a result, is likely to change its valuation assumptions used to value employee stock-based awards granted in future periods. The values derived from using the Black-Scholes model are recognized as an expense over the vesting period, net of estimated forfeitures. The estimation of stock-based awards

that will ultimately vest requires judgment. Actual results and future changes in estimates may differ from the Company’s current estimates.

There were no grants of stock options in the first three months of fiscal 2024. For the first three months of fiscal 2023, the fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model based on the assumptions in the table below as it relates to stock options granted.

	April 29, 2023
Expected volatility	86.3% - 92.1%
Risk-free interest rate	3.71%-4.42%
Expected term	2.5 yrs.
Dividend rate		—
Weighted average fair value of options granted	$	3.24

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for events or changes in circumstances that might indicate the carrying amount of the assets may not be recoverable. The Company’s judgment regarding the identification of impairment indicators is based on operational performance at the store level. Factors considered by the Company that could result in an impairment triggering event include significant changes in the use of assets, a current period operating or cash flow loss, underperformance of a store relative to historical or expected operating results, and an accumulation of costs significantly in excess of the amount originally expected for the construction of the long-lived store assets. The Company assesses the recoverability of the assets by determining whether the carrying value of such assets over their respective remaining lives can be recovered through projected undiscounted future cash flows. The model for undiscounted future cash flows includes assumptions, at the individual store level, with respect to expectations for future sales and gross margin rates as well as an estimate for occupancy costs used to estimate the fair value of the respective store’s operating lease right-of-use asset. The amount of impairment, if any, is measured based on projected discounted future cash flows using a discount rate reflecting the Company’s average cost of funds.

There were no impairments or non-cash gains recognized in the first three months of fiscal 2024 and fiscal 2023.

Advertising Costs

The Company expenses in-store advertising costs as incurred. Creative production costs, if any, are expensed in the period in which the advertising is first aired, and media costs are expensed as incurred. Direct response advertising costs, if any, are expensed in the period in which the mailing occurs. Advertising expense, which is included in selling, general and administrative expenses, was $7.3 million and $7.0 million for the first three months of fiscal 2024 and fiscal 2023, respectively.

Leases

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments, initial direct costs and any lease incentives are included in the value of those ROU assets. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, based on information available at the lease measurement date, to determine the present value of future payments. The Company elected the lessee non-lease component separation practical expedient, which permits the Company to not separate non-lease components from the lease components to which they relate. The Company also made an accounting policy election that the recognition requirement of ASC 842 will not be applied to certain, if any, non-store leases, with a term of 12 months or less, recognizing those lease payments on a straight-line basis over the lease term. At May 4, 2024, the Company had no short-term leases.

The Company’s store leases typically contain options that permit renewals for additional periods of up to five years each. In general, for store leases with an initial term of 10 years or more, the options to extend are not considered reasonably certain at lease commencement. For store leases with an initial term of 5 years, the Company evaluates each lease independently and, when the Company considers it reasonably certain that it will exercise an option to extend, the associated payment of that option will be included in the measurement of the ROU asset and lease liability. Renewal options are not included in the lease term for automobile and equipment leases because they are not considered reasonably certain of being exercised at lease commencement. Renewal options were not considered for the Company’s corporate headquarters and distribution center lease, which was entered into in 2006 and was for an initial 20-year term. At the end of the initial term, the Company will have the opportunity to extend this lease for six additional successive periods of five years.

For store leases, the Company accounts for lease components and non-lease components as a single lease component. Certain store leases may require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, and are expensed as incurred as variable lease costs. Other store leases contain one periodic fixed lease payment that

includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the ROU assets and lease liabilities. Tenant allowances are included as an offset to the right-of-use asset and amortized as reductions to rent expense over the associated lease term.

See Note 4, "Leases" for additional information.

Recently Issued Accounting Pronouncements - Not Yet Adopted

In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X: Income or Loss Applicable to Common Stock, which amends or supersedes various SEC paragraphs within the Accounting Standards Codification to conform to past SEC announcements and guidance issued by the SEC. The ASU does not provide any new guidance, and as such, there is no transition effective date. ASU 2023-03 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative. ASU-2023-06 incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K. The amendments will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. The ASU is not expected to have a material impact on our consolidated financial statements or related disclosures because the Company is currently subjected to the reporting requirements of Regulations S-X and S-K.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which requires all public entities to provide enhanced disclosures about significant segment expenses. The amendments in this ASU are to be applied retrospectively and are effective for our annual financial statements starting in fiscal 2024 and interim periods starting in fiscal 2025, with early adoption permitted. We are currently evaluating the impact of this accounting standard.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosures. This ASU will be effective for fiscal year 2025, and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. We are currently evaluating the effect of adopting this new accounting standard.

In March 2024, the FASB issued ASU 2024-01 Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, which clarified how an entity determines whether a profits interest or similar award is within the scope of Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation, by adding illustrative guidance. The guidance in ASU 2024-01 is effective for annual reporting periods beginning after December 15, 2024, and can be applied either retrospectively to all prior periods presented in the consolidated financial statements or prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. Early adoption is permitted. The adoption of ASU 2024-01 is not expected to have any impact on the Company’s consolidated financial statements.

There were no other new accounting pronouncements, issued or effective during the first three months of fiscal 2024, which had or are expected to have a significant impact on the Company’s Consolidated Financial Statements.

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Revenue Recognition

3 Months Ended

May 04, 2024

Revenue from Contract with Customer [Abstract]

Revenue Recognition

2. Revenue Recognition

The Company operates as a retailer of big and tall men’s clothing, which includes stores and direct. Revenue is recognized by the operating segment that initiates a customer’s order. Store sales are defined as sales that originate and are fulfilled directly at the store level. Direct sales are defined as sales that originate online, including those initiated online at the store level, on its website or on third-party marketplaces. Generally, all revenues are recognized when control of the promised goods is transferred to customers, in an amount that reflects the consideration in exchange for those goods. Sales tax collected from customers and remitted to taxing authorities is excluded from revenue and is included as part of accrued expenses on the Consolidated Balance Sheets.

Unredeemed Gift Cards, Gift Certificates, and Credit Vouchers. Upon issuance of a gift card, gift certificate, or credit voucher, a liability is established for its cash value. The liability is relieved and net sales are recorded upon redemption by the customer. Based on historical redemption patterns, the Company can reasonably estimate the amount of gift cards, gift certificates, and credit vouchers for which redemption is remote, which is referred to as “breakage.” Breakage is recognized over two years in proportion to historical redemption trends and is recorded as sales in the Consolidated Statements of Operations. The gift card liability, net of breakage, was $2.4 million and $3.2 million at May 4, 2024 and February 3, 2024, respectively.

Unredeemed Loyalty Coupons. The Company offers a free loyalty program to its customers for which points accumulate based on the purchase of merchandise. Under ASC 606, Revenue from Contracts with Customers, these loyalty points provide the customer with a material right and a distinct performance obligation with revenue deferred and recognized when the points are expected to redeem or expire. The cycle of earning and redeeming loyalty points is generally under one year in duration. The loyalty accrual, net of breakage, was $1.4 million and $1.7 million at May 4, 2024 and February 3, 2024, respectively.

Shipping. Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales for all periods presented. Amounts related to shipping and handling that are billed to customers are recorded in sales, and the related costs are recorded in cost of goods sold, including occupancy costs, in the Consolidated Statements of Operations.

Disaggregation of Revenue

As noted above under Segment Information in Note 1, the Company’s business consists of one reportable segment, its retail segment. Substantially all of the Company’s revenue is generated from its stores and direct businesses. Accordingly, the Company has determined that the following sales channels depict the nature, amount, timing, and uncertainty of how revenue and cash flows are affected by economic factors:

	For the Three Months Ended
(in thousands)	May 4, 2024			April 29, 2023
Store sales	$	80,848	70.0%	$	87,297	69.6%
Direct sales		34,641	30.0%		38,145	30.4%
Total sales	$	115,489		$	125,442

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Debt

3 Months Ended

May 04, 2024

Debt Disclosure [Abstract]

Debt

3. Debt

Credit Agreement with Citizens Bank, N.A.

The Company has a credit facility with Citizens Bank, N.A, which provides for a $125.0 million secured, asset-based credit facility with a maturity date of October 28, 2026 (the "Credit Facility"). The maximum committed borrowing of $125.0 million includes a sublimit of $20.0 million for commercial and standby letters of credit and a sublimit of up to $15.0 million for swing line loans. The Company’s ability to borrow under the Credit Facility is determined using an availability formula based on eligible assets.

Borrowings under the Credit Facility bear interest at either a Base Rate loan or Daily Simple SOFR rate, at the Company's option. Base Rate loans will bear interest at a rate equal to (i) the greater of: (a) the Prime Rate, (b) the Federal Funds effective rate plus 0.50% per annum and (c) the Daily Simple SOFR rate plus 1.00% per annum (provided the Base Rate shall never be less than the Floor (as defined in the Credit Facility)), plus (ii) a varying percentage, based on the Company’s average excess availability, of either 0.25% or 0.50% (the “Applicable Margin”). Daily Simple SOFR loans will bear interest at a rate equal to (i) the Daily Simple SOFR rate plus an adjustment of 0.10% (provided the Daily Simple SOFR rate shall never be less than the Floor), plus (ii) the Applicable Margin. Any swingline loan will continue to bear interest at a rate equal to the Base Rate plus the Applicable Margin. The Company is subject to an unused line fee of 0.25%.

The Company’s obligations under the Credit Facility are secured by a lien on substantially all of its assets. If the Company’s availability under the Credit Facility at any time is less than the greater of (i) 10% of the Revolving Loan Cap (the lesser of the aggregate revolving commitments or the borrowing base) and (ii) $7.5 million, then the Company is required to maintain a minimum consolidated fixed charge coverage ratio of 1.0:1.0 until such time as availability has exceeded the greater of (1) 10% of the Revolving Loan Cap and (2) $7.5 million for 30 consecutive days.

At May 4, 2024, the Company had no borrowings outstanding under the Credit Facility and unused availability was $79.2 million. The Company had no borrowings during the first quarter of fiscal 2024, resulting in an average unused excess availability of approximately $71.8 million. Outstanding standby letters of credit were $4.3 million and outstanding documentary letters were $1.5 million at May 4, 2024. At May 4, 2024, the Company’s prime-based interest rate was 8.75%.

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Leases

3 Months Ended

May 04, 2024

Leases [Abstract]

Leases

4. Leases

The Company leases all of its store locations and its corporate headquarters, which also includes its distribution center, under operating leases. The store leases typically have initial terms of 5 years to 10 years, with options that usually permit renewal for additional five-year periods. The initial term of the lease for the corporate headquarters is for 20 years, with the opportunity to extend for six additional consecutive periods of five years, beginning in fiscal 2026. The Company also leases certain equipment and other assets under operating leases, typically with initial terms of 3 to 5 years. The Company is generally obligated for the cost of property taxes, insurance and common area maintenance fees relating to its leases, which are considered variable lease costs and are expensed as incurred.

ASC 842 requires the assessment of any lease modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied. Lease modification accounting requires the recalculation of the ROU asset, lease

liability and lease expense over the respective lease term. As of May 4, 2024, the Company’s operating leases liabilities represent the present value of the remaining future minimum lease payments updated based on concessions and lease modifications.

Lease costs related to store locations are included in cost of goods sold including occupancy costs on the Consolidated Statements of Operations, and expenses and lease costs related to the corporate headquarters and equipment leases are included in selling, general and administrative expenses on the Consolidated Statements of Operations.

The following table is a summary of the Company’s components of net lease cost for the three months ended May 4, 2024 and April 29, 2023:

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands)
Operating lease cost	$	11,477	$	10,666
Variable lease costs(1)		3,393		3,166
Total lease costs	$	14,870	$	13,832

(1)Variable lease costs include the cost of property taxes, insurance and common area maintenance fees related to leases.

Supplemental cash flow and balance sheet information related to leases for the first three months ended May 4, 2024 and April 29, 2023 was as follows:

(dollars in thousands)	For the three months ended
Cash paid for amounts included in the measurement of lease liabilities:	May 4, 2024			April 29, 2023
Operating cash flows for operating leases (1)	$	12,966		$	12,753
Non-cash operating activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	26,370		$	9,250
Weighted average remaining lease term	5.2 yrs.			4.3 yrs.
Weighted average discount rate		6.45	%		6.39	%

(1)The cash paid for the first three months of fiscal 2024 and fiscal 2023 included prepaid rent of $4.3 million and $4.2 million, respectively.

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the Consolidated Balance Sheet as of May 4, 2024:

(in thousands)
2024 (remaining)	$	31,965
2025		47,074
2026		35,037
2027		28,001
2028		19,978
Thereafter		39,695
Total minimum lease payments	$	201,750
Less: amount of lease payments representing interest		32,523
Present value of future minimum lease payments	$	169,227
Less: current obligations under leases		34,644
Long-term lease obligations	$	134,583

As of May 4, 2024, the Company had entered into four ten-year store leases that have not yet commenced with aggregated estimated future lease payments of approximately $6.3 million, which are not included in the above table. The leases are expected to commence during the second and third quarters of fiscal 2024.

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Long-Term Incentive Plans

3 Months Ended

May 04, 2024

Share-Based Payment Arrangement [Abstract]

Long-Term Incentive Plans

5. Long-Term Incentive Plans

The following is a summary of the Company’s Long-Term Incentive Plan (“LTIP”). All equity awards granted under long-term incentive plans are issued from the Company’s stockholder-approved 2016 Incentive Compensation Plan. See Note 6, Stock-Based Compensation.

The LTIPs are granted annually and each LTIP covers a three-year performance period. Each participant in the LTIP participates based on that participant’s “Target Cash Value” which is defined as the participant’s annual base salary (on the participant’s effective date) multiplied by his or her LTIP percentage. Under each LTIP, 50% of each participant’s Target Cash Value is subject to time-based vesting and 50% is subject to performance-based vesting. Awards for any achievement of performance targets are not granted until the performance targets are achieved and then are subject to additional vesting through August 31 following the end of the applicable performance period.

2021-2023 LTIP

The performance targets for the Company’s 2021-2023 LTIP were approved by the Compensation Committee of the Board of Directors (the "Compensation Committee”) on March 8, 2021, and covered a three-year period performance period, which ended on February 3, 2024. The time-vested portion of the 2021-2023 LTIP vests in four annual installments, with the remaining installment vesting on April 1, 2025.

On March 29, 2024, the Compensation Committee approved a grant of awards, effective April 1, 2024, equal to $3.0 million for the achievement of the performance target for the 2021-2023 LTIP. In an effort to preserve share availability under the 2016 Plan, all awards, which are subject to further vesting through August 31, 2024, were granted in cash.

Active LTIPs

At May 4, 2024, the Company had three active LTIPs: the 2022-2024 LTIP, the 2023-2025 LTIP and the 2024-2026 LTIP. The time-based awards under each LTIP were granted in a combination of 50% RSUs and 50% cash.

Performance targets for the 2022-2024 LTIP, the 2023-2025 LTIP and the 2024-2026 LITP were established and approved by the Compensation Committee on April 9, 2022, May 1, 2023 and April 1, 2024, respectively. The performance period for each LTIP is three years. Awards for any achievement of performance targets will not be granted until the performance targets are achieved and then will be subject to an additional service requirement through August 31, 2025, August 31, 2026 and August 31, 2027, respectively. The time-based awards under the 2022-2024 LTIP, the 2023-2025 LTIP, and the 2024-2026 LTIP vest in four equal installments through April 1, 2026, April 1, 2027 and April 1, 2028, respectively. Assuming that the Company achieves the performance targets at target levels and all time-based awards vest, the compensation expense associated with the 2022-2024 LTIP, 2023-2025 LTIP and 2024-2026 LTIP is estimated to be approximately $4.8 million, $5.1 million and $5.3 million, respectively. Approximately half of the compensation expense for each LTIP relates to the time-based awards, which are being expensed straight-line over 48 months, 47 months and 49 months, respectively.

At May 4, 2024, the Company had accrued $1.4 million under the 2022-2024 LTIP and $0.1 million under the 2024-2026 LTIP for the performance awards. At May 4, 2024, the Company had no accrual for the performance-based awards under the 2023-2025 LTIP.

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Stock-Based Compensation

3 Months Ended

May 04, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

6. Stock-Based Compensation

The Company has one active stock-based compensation plan: the 2016 Incentive Compensation Plan (as amended, the “2016 Plan”). A grant of a stock option award or stock appreciation right will reduce the outstanding reserve on a one-for-one basis, meaning one share for every share granted. A grant of a full-value award, including, but not limited to, restricted stock, restricted stock units and deferred stock, will reduce the outstanding reserve by a fixed ratio of 1.9 shares for every share granted. At May 4, 2024, 15,120,538 shares were authorized under the 2016 Plan, of which 1,445,584 shares remained available for grant.

In accordance with the terms of the 2016 Plan, any shares outstanding under the previous 2006 Incentive Compensation Plan (the “2006 Plan”) at August 4, 2016 that subsequently terminate, expire or are cancelled for any reason without having been exercised or paid are added back and become available for issuance under the 2016 Plan, with stock options being added back on a one-for-one basis and full-value awards being added back on a 1 to 1.9 basis. At May 4, 2024, 59,254 stock options remained outstanding under the 2006 Plan.

The 2016 Plan is administered by the Compensation Committee. The Compensation Committee is authorized to make all determinations with respect to amounts and conditions covering awards. Options are not granted at a price less than fair value on the date of the grant. Except with respect to 5% of the shares available for awards under the 2016 Plan, no award will become exercisable unless such award has been outstanding for a minimum period of one year from its date of grant.

The following tables summarize the share activity and stock option activity for the first three months of fiscal 2024:

	RSUs (1)			Deferred shares (2)		Performance Share Units (3)		Fully-Vested  Shares (4)			Total number of shares			Weighted- average grant-date fair value
Shares
Outstanding non-vested shares at beginning of year		536,285			435,568		573,000		—			1,544,853		$	3.53
Shares granted		376,416			8,713		—		9,734			394,863		$	3.58
Shares vested and/or issued		(129,112	)		—		—		(9,734	)		(138,846	)	$	4.67
Shares expired		—			—		—		—			—		$	—
Shares forfeited		—			—		—		—			—		$	—
Outstanding non-vested shares at end of quarter		783,589			444,281		573,000		—			1,800,870		$	3.46

(1)During the first three months of fiscal 2024, the Company granted time-based RSUs under its 2024-2026 LTIP. See Note 5, Long-Term Incentive Plans. As a result of net share settlements, of the 129,112 RSUs that vested, 115,292 shares of common stock were issued.

(2)The 8,713 shares of deferred stock, with a fair value of $36,246 represent director compensation in lieu of cash, in accordance with the director's irrevocable election. The shares of deferred stock will be issued upon the director's separation from service.

(3)On August 11, 2023, the Company granted 573,000 performance share units ("PSUs") in connection with the extension of Mr. Kanter's employment agreement. The award consists of nine tranches, with the first tranche vesting if and when the 30-day volume-weighted closing price of the Company's common stock is equal to or greater than $6.50 per share. Each subsequent tranche will vest upon achievement of the 30-day volume-weighted closing price of the Company's common stock in $0.25 increments with the ninth tranche vesting when such price is equal to or greater than $8.50 per share. The PSUs are subject to a one-year minimum vesting period, and any unvested PSUs will expire on August 11, 2026. The $2.4 million fair value is being expensed over the respective derived service periods of each tranche which range from 12 to 13 months. The respective fair value and derived service periods assigned to the PSUs were determined using a Monte Carlo model based on: a weighted historical volatility of 57.8%, a term of 3 years, stock price on the date of grant of $4.98 per share, a risk-free rate of 4.6% and a cost of equity of 11.0%.

(4)Represented compensation, with a fair value of $40,493, to certain directors, who are required to receive shares, in lieu of cash, in order to satisfy their minimum equity ownership under the Non-Employee Director Compensation Plan. Voluntary shares received, in lieu of cash, are reported below under Non-Employee Director Compensation Plan.

	Number of shares			Weighted- average exercise price per option		Weighted- average remaining contractual term		Aggregate intrinsic value (000's)
Stock Options
Outstanding options at beginning of year		3,180,739		$	0.75		—	$	10,962
Options granted		—			—		—		—
Options exercised		(132,397	)	$	0.58		—		388
Options expired		(16,233	)	$	5.29		—		—
Options forfeited		(1,715	)	$	0.75		—		5
Outstanding options at end of quarter		3,030,394		$	0.73	6.3 years		$	7,761
Options exercisable at end of quarter		2,790,202		$	0.73	6.2 years		$	7,158

For the first three months of fiscal 2024, the Company granted 376,416 restricted stock units, 8,713 shares of deferred stock and 9,734 fully-vested shares. For the first three months of fiscal 2023, the Company granted stock options to purchase an aggregate of 1,316 shares of common stock, 270,867 restricted stock units and 2,844 fully-vested shares.

Non-Employee Director Compensation Plan

The Company granted 8,412 shares of common stock, with a fair value of approximately $34,994, to certain of its non-employee directors as compensation in lieu of cash in the first three months of fiscal 2024. These shares are in addition to any shares that may be granted under the 2016 Plan related to the requirement to receive equity if a director has not yet satisfied his or her minimum equity ownership requirement under the Non-Employee Director Compensation Plan.

Stock Compensation Expense

The Company recognized total stock-based compensation expense of $0.9 million and $0.4 million for the first three months of fiscal 2024 and fiscal 2023, respectively. The total compensation cost related to time-vested stock options, RSU awards, and PSU awards not yet recognized as of May 4, 2024 was approximately $3.9 million, net of estimated forfeitures, which will be expensed over a weighted average remaining life of 30 months.

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Equity and Earnings per Share

3 Months Ended

May 04, 2024

Earnings Per Share [Abstract]

Equity and Earnings per Share

7. Equity and Earnings per Share

The following table provides a reconciliation of the number of shares outstanding for basic and diluted earnings per share:

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands)
Common stock outstanding:
Basic weighted average common shares outstanding		58,036		62,690
Common stock equivalents – stock options, restricted stock units and deferred stock		2,927		3,626
Diluted weighted average common shares outstanding		60,963		66,316

The following potential common stock equivalents were excluded from the computation of diluted earnings per share in each period, because the exercise price of such options was greater than the average market price per share of common stock for the respective periods or because the unearned compensation associated with stock options or restricted stock units had an anti-dilutive effect.

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands, except exercise prices)
Stock options		73		17
Restricted stock units and deferred stock		545		9
Range of exercise prices of such options	$4.48-$6.59		$4.48 - $7.43

The above options, which were outstanding at May 4, 2024, expire from June 1, 2024 to March 20, 2033.

Excluded from the computation of basic and diluted earnings per share were 573,000 shares for the first quarter of fiscal 2024. These performance-based awards will be included in the computation of basic and diluted earnings per share if, and when, the respective performance targets are achieved. In addition, 444,281 shares and 435,568 shares of deferred stock at May 4, 2024 and April 29, 2023, respectively, were excluded from the computation of basic earnings per share. Shares of deferred stock are not considered issued and outstanding until the vesting date of the deferral period.

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Income Taxes

3 Months Ended

May 04, 2024

Income Tax Disclosure [Abstract]

Income Taxes

8. Income Taxes

The Company's tax provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Each quarter, the Company updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision.

For the first quarter of fiscal 2024 and 2023, the Company’s effective tax rate was 30.4% and 26.6%, respectively. The increase in the effective tax rate was primarily due to permanent book to tax differences combined with a lower pretax income as compared to the first quarter of fiscal 2023.

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Fair Value Measurement

3 Months Ended

May 04, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurement

9. Fair Value Measurement

At May 4, 2024 and February 3, 2024, the Company held U.S. treasury bills which were classified as held-to maturity and carried at amortized cost.
 

			Fair Value
(in thousands)	Carrying value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At May 4, 2024:
Short-term investments		36,891		36,869		—		—
At February 3, 2024:
Cash equivalents		6,047		6,052		—		—
Short-term investments		32,459		32,479		—		—

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Stock Repurchase Program and Subsequent Event

3 Months Ended

May 04, 2024

Stock Repurchase Program [Abstract]

Stock Repurchase Program

10. Stock Repurchase Program

On March 14, 2023, the Company's Board of Directors (“Board”) approved a stock repurchase program, effective March 16, 2023, which was subsequently amended in November 2023. Under the amended program, the Company was authorized to repurchase up to $25.0 million of its common stock, including excise tax, through open market and privately negotiated transactions.

During the first quarter of fiscal 2024, the Company repurchased 52,802 shares at a total cost, including fees, of $211,182, completing its stock repurchase program.

The Inflation Reduction Act of 2022 imposed a nondeductible 1% excise tax on the net value of certain share repurchases made after December 31, 2022. Beginning in fiscal year 2023, the applicable excise tax is being charged to additional paid-in capital in the Company's Consolidated Balance Sheet as part of the cost basis of the shares repurchased, with the corresponding liability for the excise tax payable recorded in accrued expenses and other current liabilities until paid. This liability is partially offset by a 1% credit permitted under the rules for the fair value of shares issued by the Company. At May 4, 2024, the Company had accrued $0.2 million for the payment of excise taxes.

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Basis of Presentation (Policies)

3 Months Ended

May 04, 2024

Accounting Policies [Abstract]

Segment Information

Segment Information

The Company has two principal operating segments: its stores and its direct business. The Company considers its stores and direct operating segments to be similar in terms of economic characteristics, production processes and operations, and has therefore aggregated them into one reportable segment, retail segment, consistent with its omni-channel business approach.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist of cash in banks and short-term investments, which have a maturity of ninety days or less when acquired. Included in cash equivalents are credit card and debit card receivables from banks, which generally settle within two to four business days.

Short-Term Investments

Short-Term Investments

Short-term investments consist of those investments that have a maturity date, when acquired, that is greater than three months and twelve months or less. These investments are classified as held-to-maturity and are carried at amortized cost, which approximates fair value due to the short period between purchase and maturity.

Concentration of Credit Risk

Concentration of Credit Risk

Cash and cash equivalents include amounts due from third party financial institutions, which from time to time, may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company is potentially exposed to a concentration of credit risk when cash and cash equivalent deposits in these financial institutions are in excess of FDIC limits. The Company considers the credit risk associated with these financial instruments to be minimal as cash and cash equivalents are held by financial institutions with high credit ratings and it has not historically sustained any credit losses associated with its cash and cash equivalents balances. In addition, the Company's cash and cash equivalents include money market accounts with Citizens Bank, N.A. and investments in U.S. government-backed securities held with Fidelity Investments.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

ASC Topic 825, Financial Instruments, requires disclosure of the fair value of certain financial instruments. ASC Topic 820, “Fair Value Measurements and Disclosures,” defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements.

The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy:

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

Level 2 – Observable inputs other than Level 1 prices 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 related 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 assets or liabilities.

The Company utilizes observable market inputs (quoted market prices) when measuring fair value whenever possible.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short maturity of these instruments. See Note 9 - Fair Value Measurement for information regarding the fair value of certain financial assets.

Accumulated Other Comprehensive Income (Loss) - ("AOCI")

Accumulated Other Comprehensive Income (Loss) - (“AOCI”)

In the fourth quarter of fiscal 2023, the Company terminated its frozen retirement plans, which was the only AOCI activity. As a result, there is no remaining AOCI as of February 3, 2024.

For the first three months of fiscal 2023, other comprehensive income and reclassifications from AOCI was as follows:

	April 29, 2023
For the three months ended:	(in thousands)
	Retirement Plans
Balance at beginning of the quarter	$	(4,928	)
Other comprehensive income before    reclassifications, net of taxes		6
Amounts reclassified from accumulated other    comprehensive income, net of taxes (1)		43
Other comprehensive income for the period		49
Balance at end of quarter	$	(4,879	)

(1)Includes the amortization of the unrecognized loss on retirement plans, which was charged to “Selling, General and Administrative” Expense on the Consolidated Statements of Operations for all periods presented. The Company recognized expense of $58,000, or $43,000 net of taxes, for the three months ended April 29, 2023.

Stock-based Compensation

Stock-based Compensation

All share-based payments, including grants of employee stock options and restricted stock, are recognized as an expense in the Consolidated Statements of Operations based on their fair values and vesting periods. The fair value of stock options is determined using the Black-Scholes valuation model and requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (the “expected term”), the estimated volatility of the Company’s common stock price over the expected term and the number of options that will ultimately not complete their vesting requirements (“forfeitures”). The Company reviews its valuation assumptions at each grant date and, as a result, is likely to change its valuation assumptions used to value employee stock-based awards granted in future periods. The values derived from using the Black-Scholes model are recognized as an expense over the vesting period, net of estimated forfeitures. The estimation of stock-based awards

that will ultimately vest requires judgment. Actual results and future changes in estimates may differ from the Company’s current estimates.

There were no grants of stock options in the first three months of fiscal 2024. For the first three months of fiscal 2023, the fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model based on the assumptions in the table below as it relates to stock options granted.

	April 29, 2023
Expected volatility	86.3% - 92.1%
Risk-free interest rate	3.71%-4.42%
Expected term	2.5 yrs.
Dividend rate		—
Weighted average fair value of options granted	$	3.24

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for events or changes in circumstances that might indicate the carrying amount of the assets may not be recoverable. The Company’s judgment regarding the identification of impairment indicators is based on operational performance at the store level. Factors considered by the Company that could result in an impairment triggering event include significant changes in the use of assets, a current period operating or cash flow loss, underperformance of a store relative to historical or expected operating results, and an accumulation of costs significantly in excess of the amount originally expected for the construction of the long-lived store assets. The Company assesses the recoverability of the assets by determining whether the carrying value of such assets over their respective remaining lives can be recovered through projected undiscounted future cash flows. The model for undiscounted future cash flows includes assumptions, at the individual store level, with respect to expectations for future sales and gross margin rates as well as an estimate for occupancy costs used to estimate the fair value of the respective store’s operating lease right-of-use asset. The amount of impairment, if any, is measured based on projected discounted future cash flows using a discount rate reflecting the Company’s average cost of funds.

There were no impairments or non-cash gains recognized in the first three months of fiscal 2024 and fiscal 2023.

Advertising Costs

Advertising Costs

The Company expenses in-store advertising costs as incurred. Creative production costs, if any, are expensed in the period in which the advertising is first aired, and media costs are expensed as incurred. Direct response advertising costs, if any, are expensed in the period in which the mailing occurs. Advertising expense, which is included in selling, general and administrative expenses, was $7.3 million and $7.0 million for the first three months of fiscal 2024 and fiscal 2023, respectively.

Leases

Leases

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments, initial direct costs and any lease incentives are included in the value of those ROU assets. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, based on information available at the lease measurement date, to determine the present value of future payments. The Company elected the lessee non-lease component separation practical expedient, which permits the Company to not separate non-lease components from the lease components to which they relate. The Company also made an accounting policy election that the recognition requirement of ASC 842 will not be applied to certain, if any, non-store leases, with a term of 12 months or less, recognizing those lease payments on a straight-line basis over the lease term. At May 4, 2024, the Company had no short-term leases.

The Company’s store leases typically contain options that permit renewals for additional periods of up to five years each. In general, for store leases with an initial term of 10 years or more, the options to extend are not considered reasonably certain at lease commencement. For store leases with an initial term of 5 years, the Company evaluates each lease independently and, when the Company considers it reasonably certain that it will exercise an option to extend, the associated payment of that option will be included in the measurement of the ROU asset and lease liability. Renewal options are not included in the lease term for automobile and equipment leases because they are not considered reasonably certain of being exercised at lease commencement. Renewal options were not considered for the Company’s corporate headquarters and distribution center lease, which was entered into in 2006 and was for an initial 20-year term. At the end of the initial term, the Company will have the opportunity to extend this lease for six additional successive periods of five years.

For store leases, the Company accounts for lease components and non-lease components as a single lease component. Certain store leases may require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, and are expensed as incurred as variable lease costs. Other store leases contain one periodic fixed lease payment that

includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the ROU assets and lease liabilities. Tenant allowances are included as an offset to the right-of-use asset and amortized as reductions to rent expense over the associated lease term.

See Note 4, "Leases" for additional information.

Recently Issued Accounting Pronouncements - Not Yet Adopted

Recently Issued Accounting Pronouncements - Not Yet Adopted

In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General Revision of Regulation S-X: Income or Loss Applicable to Common Stock, which amends or supersedes various SEC paragraphs within the Accounting Standards Codification to conform to past SEC announcements and guidance issued by the SEC. The ASU does not provide any new guidance, and as such, there is no transition effective date. ASU 2023-03 is not expected to have a material impact on the Company's Consolidated Financial Statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative. ASU-2023-06 incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K. The amendments will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. The ASU is not expected to have a material impact on our consolidated financial statements or related disclosures because the Company is currently subjected to the reporting requirements of Regulations S-X and S-K.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which requires all public entities to provide enhanced disclosures about significant segment expenses. The amendments in this ASU are to be applied retrospectively and are effective for our annual financial statements starting in fiscal 2024 and interim periods starting in fiscal 2025, with early adoption permitted. We are currently evaluating the impact of this accounting standard.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which enhances transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid and to improve the effectiveness of income tax disclosures. This ASU will be effective for fiscal year 2025, and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. We are currently evaluating the effect of adopting this new accounting standard.

In March 2024, the FASB issued ASU 2024-01 Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, which clarified how an entity determines whether a profits interest or similar award is within the scope of Accounting Standards Codification (“ASC”) 718, Compensation – Stock Compensation, by adding illustrative guidance. The guidance in ASU 2024-01 is effective for annual reporting periods beginning after December 15, 2024, and can be applied either retrospectively to all prior periods presented in the consolidated financial statements or prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments. Early adoption is permitted. The adoption of ASU 2024-01 is not expected to have any impact on the Company’s consolidated financial statements.

There were no other new accounting pronouncements, issued or effective during the first three months of fiscal 2024, which had or are expected to have a significant impact on the Company’s Consolidated Financial Statements.

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Basis of Presentation (Tables)

3 Months Ended

May 04, 2024

Accounting Policies [Abstract]

Other Comprehensive Income (Loss) and Reclassifications from AOCI

For the first three months of fiscal 2023, other comprehensive income and reclassifications from AOCI was as follows:

	April 29, 2023
For the three months ended:	(in thousands)
	Retirement Plans
Balance at beginning of the quarter	$	(4,928	)
Other comprehensive income before    reclassifications, net of taxes		6
Amounts reclassified from accumulated other    comprehensive income, net of taxes (1)		43
Other comprehensive income for the period		49
Balance at end of quarter	$	(4,879	)

(1)Includes the amortization of the unrecognized loss on retirement plans, which was charged to “Selling, General and Administrative” Expense on the Consolidated Statements of Operations for all periods presented. The Company recognized expense of $58,000, or $43,000 net of taxes, for the three months ended April 29, 2023.

Valuation Assumptions for Stock Options

For the first three months of fiscal 2023, the fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model based on the assumptions in the table below as it relates to stock options granted.

	April 29, 2023
Expected volatility	86.3% - 92.1%
Risk-free interest rate	3.71%-4.42%
Expected term	2.5 yrs.
Dividend rate		—
Weighted average fair value of options granted	$	3.24

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Revenue Recognition (Tables)

3 Months Ended

May 04, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

As noted above under Segment Information in Note 1, the Company’s business consists of one reportable segment, its retail segment. Substantially all of the Company’s revenue is generated from its stores and direct businesses. Accordingly, the Company has determined that the following sales channels depict the nature, amount, timing, and uncertainty of how revenue and cash flows are affected by economic factors:

	For the Three Months Ended
(in thousands)	May 4, 2024			April 29, 2023
Store sales	$	80,848	70.0%	$	87,297	69.6%
Direct sales		34,641	30.0%		38,145	30.4%
Total sales	$	115,489		$	125,442

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Leases (Tables)

3 Months Ended

May 04, 2024

Leases [Abstract]

Summary of Components of Net Lease Cost

The following table is a summary of the Company’s components of net lease cost for the three months ended May 4, 2024 and April 29, 2023:

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands)
Operating lease cost	$	11,477	$	10,666
Variable lease costs(1)		3,393		3,166
Total lease costs	$	14,870	$	13,832

(1)Variable lease costs include the cost of property taxes, insurance and common area maintenance fees related to leases.

Supplemental Cash Flow Information Related to Leases

Supplemental cash flow and balance sheet information related to leases for the first three months ended May 4, 2024 and April 29, 2023 was as follows:

(dollars in thousands)	For the three months ended
Cash paid for amounts included in the measurement of lease liabilities:	May 4, 2024			April 29, 2023
Operating cash flows for operating leases (1)	$	12,966		$	12,753
Non-cash operating activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	26,370		$	9,250
Weighted average remaining lease term	5.2 yrs.			4.3 yrs.
Weighted average discount rate		6.45	%		6.39	%

(1)The cash paid for the first three months of fiscal 2024 and fiscal 2023 included prepaid rent of $4.3 million and $4.2 million, respectively.

Schedule of Reconciliation of Undiscounted Cash Flows Related to Operating Lease Liabilities

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the Consolidated Balance Sheet as of May 4, 2024:

(in thousands)
2024 (remaining)	$	31,965
2025		47,074
2026		35,037
2027		28,001
2028		19,978
Thereafter		39,695
Total minimum lease payments	$	201,750
Less: amount of lease payments representing interest		32,523
Present value of future minimum lease payments	$	169,227
Less: current obligations under leases		34,644
Long-term lease obligations	$	134,583

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Stock-Based Compensation (Tables)

3 Months Ended

May 04, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Restricted Stock Activity

The following tables summarize the share activity and stock option activity for the first three months of fiscal 2024:

	RSUs (1)			Deferred shares (2)		Performance Share Units (3)		Fully-Vested  Shares (4)			Total number of shares			Weighted- average grant-date fair value
Shares
Outstanding non-vested shares at beginning of year		536,285			435,568		573,000		—			1,544,853		$	3.53
Shares granted		376,416			8,713		—		9,734			394,863		$	3.58
Shares vested and/or issued		(129,112	)		—		—		(9,734	)		(138,846	)	$	4.67
Shares expired		—			—		—		—			—		$	—
Shares forfeited		—			—		—		—			—		$	—
Outstanding non-vested shares at end of quarter		783,589			444,281		573,000		—			1,800,870		$	3.46

(1)During the first three months of fiscal 2024, the Company granted time-based RSUs under its 2024-2026 LTIP. See Note 5, Long-Term Incentive Plans. As a result of net share settlements, of the 129,112 RSUs that vested, 115,292 shares of common stock were issued.

(2)The 8,713 shares of deferred stock, with a fair value of $36,246 represent director compensation in lieu of cash, in accordance with the director's irrevocable election. The shares of deferred stock will be issued upon the director's separation from service.

(3)On August 11, 2023, the Company granted 573,000 performance share units ("PSUs") in connection with the extension of Mr. Kanter's employment agreement. The award consists of nine tranches, with the first tranche vesting if and when the 30-day volume-weighted closing price of the Company's common stock is equal to or greater than $6.50 per share. Each subsequent tranche will vest upon achievement of the 30-day volume-weighted closing price of the Company's common stock in $0.25 increments with the ninth tranche vesting when such price is equal to or greater than $8.50 per share. The PSUs are subject to a one-year minimum vesting period, and any unvested PSUs will expire on August 11, 2026. The $2.4 million fair value is being expensed over the respective derived service periods of each tranche which range from 12 to 13 months. The respective fair value and derived service periods assigned to the PSUs were determined using a Monte Carlo model based on: a weighted historical volatility of 57.8%, a term of 3 years, stock price on the date of grant of $4.98 per share, a risk-free rate of 4.6% and a cost of equity of 11.0%.

(4)Represented compensation, with a fair value of $40,493, to certain directors, who are required to receive shares, in lieu of cash, in order to satisfy their minimum equity ownership under the Non-Employee Director Compensation Plan. Voluntary shares received, in lieu of cash, are reported below under Non-Employee Director Compensation Plan.

Stock Option Activity

	Number of shares			Weighted- average exercise price per option		Weighted- average remaining contractual term		Aggregate intrinsic value (000's)
Stock Options
Outstanding options at beginning of year		3,180,739		$	0.75		—	$	10,962
Options granted		—			—		—		—
Options exercised		(132,397	)	$	0.58		—		388
Options expired		(16,233	)	$	5.29		—		—
Options forfeited		(1,715	)	$	0.75		—		5
Outstanding options at end of quarter		3,030,394		$	0.73	6.3 years		$	7,761
Options exercisable at end of quarter		2,790,202		$	0.73	6.2 years		$	7,158

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Equity and Earnings per Share (Tables)

3 Months Ended

May 04, 2024

Earnings Per Share [Abstract]

Reconciliation of Number of Shares Outstanding for Basic and Diluted Earnings Per Share

The following table provides a reconciliation of the number of shares outstanding for basic and diluted earnings per share:

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands)
Common stock outstanding:
Basic weighted average common shares outstanding		58,036		62,690
Common stock equivalents – stock options, restricted stock units and deferred stock		2,927		3,626
Diluted weighted average common shares outstanding		60,963		66,316

Potential Common Stock Equivalents Excluded from Computation of Diluted Earnings Per Share

The following potential common stock equivalents were excluded from the computation of diluted earnings per share in each period, because the exercise price of such options was greater than the average market price per share of common stock for the respective periods or because the unearned compensation associated with stock options or restricted stock units had an anti-dilutive effect.

	For the three months ended
	May 4, 2024		April 29, 2023
(in thousands, except exercise prices)
Stock options		73		17
Restricted stock units and deferred stock		545		9
Range of exercise prices of such options	$4.48-$6.59		$4.48 - $7.43

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Fair Value Measurement (Tables)

3 Months Ended

May 04, 2024

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measured at Recurring Basis

At May 4, 2024 and February 3, 2024, the Company held U.S. treasury bills which were classified as held-to maturity and carried at amortized cost.
 

			Fair Value
(in thousands)	Carrying value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At May 4, 2024:
Short-term investments		36,891		36,869		—		—
At February 3, 2024:
Cash equivalents		6,047		6,052		—		—
Short-term investments		32,459		32,479		—		—

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Basis of Presentation - Additional Information (Details)	3 Months Ended
	May 04, 2024 USD ($) Segment RenewalOption shares	Apr. 29, 2023 USD ($)	Feb. 03, 2024 USD ($)
Accounting Policies [Line Items]
Number of reportable segments | Segment	1
Number of operating segments | Segment	2
Accumulated other comprehensive income (loss)			$ 0
Options granted | shares	0
Impairments or non-cash gains recognized	$ 0	$ 0
Short term leases	$ 0
Operating lease, option to extend	Renewal options are not included in the lease term for automobile and equipment leases because they are not considered reasonably certain of being exercised at lease commencement. Renewal options were not considered for the Company’s corporate headquarters and distribution center lease, which was entered into in 2006 and was for an initial 20-year term
Selling, General and Administrative Expense
Accounting Policies [Line Items]
Advertising expense	$ 7,300,000	$ 7,000,000
Corporate Headquarter
Accounting Policies [Line Items]
Operating lease renewal term	5 years
Operating lease initial term	20 years
Number of renewal options | RenewalOption	6
Store
Accounting Policies [Line Items]
Operating lease, option to extend	The Company’s store leases typically contain options that permit renewals for additional periods of up to five years each. In general, for store leases with an initial term of 10 years or more, the options to extend are not considered reasonably certain at lease commencement. For store leases with an initial term of 5 years, the Company evaluates each lease independently and, when the Company considers it reasonably certain that it will exercise an option to extend, the associated payment of that option will be included in the measurement of the ROU asset and lease liability.
Operating lease renewal term	5 years
Minimum
Accounting Policies [Line Items]
Credit card and debit card receivables from banks settlement period	2 days
Minimum | Store
Accounting Policies [Line Items]
Operating lease renewal term	5 years
Operating lease initial term	5 years
Maximum
Accounting Policies [Line Items]
Credit card and debit card receivables from banks settlement period	4 days
Maximum | Store
Accounting Policies [Line Items]
Operating lease renewal term	5 years
Operating lease initial term	10 years

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Basis of Presentation - Other Comprehensive Income (Loss) and Reclassifications from AOCI (Details) - USD ($) $ in Thousands		3 Months Ended
		May 04, 2024	Apr. 29, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance		$ 148,953	$ 137,228
Other comprehensive income, net of tax		0	49
Ending Balance		$ 153,550	145,672
Retirement Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			(4,928)
Other comprehensive income before reclassifications, net of taxes			6
Amounts reclassified from accumulated other comprehensive income, net of taxes	[1]		43
Other comprehensive income, net of tax			49
Ending Balance			(4,879)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning Balance			(4,928)
Other comprehensive income, net of tax			49
Ending Balance			$ (4,879)

[1] Includes the amortization of the unrecognized loss on retirement plans, which was charged to “Selling, General and Administrative” Expense on the Consolidated Statements of Operations for all periods presented. The Company recognized expense of $58,000, or $43,000 net of taxes, for the three months ended April 29, 2023.

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Basis of Presentation - Other Comprehensive Income (Loss) and Reclassifications from AOCI (Parenthetical) (Details) - USD ($)		3 Months Ended
		May 04, 2024	Apr. 29, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]
Income tax expense (benefit)		$ 1,658,000	$ 2,530,000
Retirement Plans
Accumulated Other Comprehensive Income (Loss) [Line Items]
Expenses recognized	[1]		(43,000)
Retirement Plans | Selling, General and Administrative Expense
Accumulated Other Comprehensive Income (Loss) [Line Items]
Expenses recognized before tax			58,000
Expenses recognized			$ 43,000

[1] Includes the amortization of the unrecognized loss on retirement plans, which was charged to “Selling, General and Administrative” Expense on the Consolidated Statements of Operations for all periods presented. The Company recognized expense of $58,000, or $43,000 net of taxes, for the three months ended April 29, 2023.

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Basis of Presentation - Valuation Assumptions for Stock Options (Details)	3 Months Ended
	Apr. 29, 2023 $ / shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Expected volatility, minimum	86.30%
Expected volatility, maximum	92.10%
Risk-free interest rate, minimum	3.71%
Risk-free interest rate, maximum	4.42%
Expected term	2 years 6 months
Weighted average fair value of options granted	$ 3.24

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Revenue Recognition - Additional Information (Details) $ in Millions	3 Months Ended
	May 04, 2024 USD ($) Segment	Feb. 03, 2024 USD ($)
Revenue from Contract with Customer [Abstract]
Gift card liability, net of breakage	$ 2.4	$ 3.2
Loyalty accrual, net of breakage	$ 1.4	$ 1.7
Number of reportable segments | Segment	1

XML

Revenue Recognition - Additional Information (Details1)	May 04, 2024
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-05-05
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items]
Cycle of earning and redeeming loyalty points period	1 year

XML

Revenue Recognition - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Disaggregation Of Revenue [Line Items]
Total sales	$ 115,489	$ 125,442
Retail Segment | Store Sales
Disaggregation Of Revenue [Line Items]
Total sales	$ 80,848	$ 87,297
Retail Segment | Store Sales | Sales Revenue Net | Product Concentration Risk
Disaggregation Of Revenue [Line Items]
Total sales, percentage	70.00%	69.60%
Retail Segment | Direct Sales
Disaggregation Of Revenue [Line Items]
Total sales	$ 34,641	$ 38,145
Retail Segment | Direct Sales | Sales Revenue Net | Product Concentration Risk
Disaggregation Of Revenue [Line Items]
Total sales, percentage	30.00%	30.40%

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Debt - Additional Information (Details)		3 Months Ended
	Oct. 28, 2021 USD ($) d	May 04, 2024 USD ($)	Apr. 29, 2023 USD ($)
Debt Instrument [Line Items]
Interest and fees paid		$ 90,000	$ 62,000
Revolver Facility
Debt Instrument [Line Items]
Line of credit facility, amount outstanding		$ 0
Credit Facility
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 125,000,000
Debt instrument, interest rate terms		Borrowings under the Credit Facility bear interest at either a Base Rate loan or Daily Simple SOFR rate, at the Company's option. Base Rate loans will bear interest at a rate equal to (i) the greater of: (a) the Prime Rate, (b) the Federal Funds effective rate plus 0.50% per annum and (c) the Daily Simple SOFR rate plus 1.00% per annum (provided the Base Rate shall never be less than the Floor (as defined in the Credit Facility)), plus (ii) a varying percentage, based on the Company’s average excess availability, of either 0.25% or 0.50% (the “Applicable Margin”). Daily Simple SOFR loans will bear interest at a rate equal to (i) the Daily Simple SOFR rate plus an adjustment of 0.10% (provided the Daily Simple SOFR rate shall never be less than the Floor), plus (ii) the Applicable Margin. Any swingline loan will continue to bear interest at a rate equal to the Base Rate plus the Applicable Margin. The Company is subject to an unused line fee of 0.25%.
Debt instrument, covenant description		(i) 10% of the Revolving Loan Cap (the lesser of the aggregate revolving commitments or the borrowing base) and (ii) $7.5 million, then the Company is required to maintain a minimum consolidated fixed charge coverage ratio of 1.0:1.0 until such time as availability has exceeded the greater of (1) 10% of the Revolving Loan Cap and (2) $7.5 million for 30 consecutive days.
Minimum loan cap percentage	10.00%
Line of credit facility	$ 7,500,000
Minimum consolidated fixed charge coverage ratio	1
Number of consecutive days | d	30
Line of credit facility, maturity date	Oct. 28, 2026
Line of credit facility, remaining borrowing capacity		$ 79,200,000
Line of credit facility, average unused excess availability		$ 71,800,000
Unused line fee	0.25%
Credit Facility | Federal Funds Rate
Debt Instrument [Line Items]
Line of credit facility, basis spread on variable rate	0.50%
Credit Facility | SOFR-based Borrowings
Debt Instrument [Line Items]
Line of credit facility, basis spread on variable rate	1.00%
Credit Facility | Prime-based Borrowings
Debt Instrument [Line Items]
Line of credit facility interest rate		8.75%
Credit Facility | Minimum | SOFR-based Borrowings
Debt Instrument [Line Items]
Line of credit facility, basis spread on variable rate	0.25%
Credit Facility | Maximum | SOFR-based Borrowings
Debt Instrument [Line Items]
Line of credit facility, basis spread on variable rate	0.50%
Credit Facility | Commercial And Standby Letter Of Credits
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 20,000,000
Credit Facility | Swing Line Loans
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 15,000,000
Credit Facility | SOFR loans | SOFR-based Borrowings
Debt Instrument [Line Items]
Line of credit facility, basis spread on variable rate	0.10%
Credit Facility | Standby Letters of Credit
Debt Instrument [Line Items]
Letters of credit outstanding, amount		$ 4,300,000
Credit Facility | Documentary Letters of Credit
Debt Instrument [Line Items]
Letters of credit outstanding, amount		$ 1,500,000

XML

Leases - Additional Information (Details) $ in Millions	3 Months Ended
	May 04, 2024 USD ($) RenewalOption Lease
Lessee Lease Description [Line Items]
Operating lease renewal option beginning year	2026
Leases, expected to commence period	2024
Store
Lessee Lease Description [Line Items]
Operating lease option to extend	5 years
Number of leases not yet commenced | Lease	4
Operating lease team, not yet commenced	10 years
Aggregated estimated future lease payments | $	$ 6.3
Store | Minimum
Lessee Lease Description [Line Items]
Operating lease initial term	5 years
Operating lease option to extend	5 years
Store | Maximum
Lessee Lease Description [Line Items]
Operating lease initial term	10 years
Operating lease option to extend	5 years
Corporate Headquarter
Lessee Lease Description [Line Items]
Operating lease initial term	20 years
Operating lease option to extend	5 years
Number of renewal options | RenewalOption	6
Equipment and Other Assets | Minimum
Lessee Lease Description [Line Items]
Operating lease initial term	3 years
Equipment and Other Assets | Maximum
Lessee Lease Description [Line Items]
Operating lease initial term	5 years

XML

Leases - Summary of Components of Net Lease Cost (Details) - USD ($) $ in Thousands		3 Months Ended
		May 04, 2024	Apr. 29, 2023
Leases [Abstract]
Operating lease cost		$ 11,477	$ 10,666
Variable lease costs	[1]	3,393	3,166
Total lease costs		$ 14,870	$ 13,832

[1] Variable lease costs include the cost of property taxes, insurance and common area maintenance fees related to leases.

XML

Leases - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands		3 Months Ended
		May 04, 2024	Apr. 29, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	[1]	$ 12,966	$ 12,753
Non-cash operating activities:
Right-of-use assets obtained in exchange for operating lease liabilities		$ 26,370	$ 9,250
Weighted average remaining lease term		5 years 2 months 12 days	4 years 3 months 18 days
Weighted average discount rate		6.45%	6.39%

[1] The cash paid for the first three months of fiscal 2024 and fiscal 2023 included prepaid rent of $4.3 million and $4.2 million, respectively.

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Leases - Supplemental Cash Flow Information Related to Leases (Parenthetical) (Details) - USD ($) $ in Millions	May 04, 2024	Apr. 29, 2023
Leases [Abstract]
Prepaid rent	$ 4.3	$ 4.2

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Leases - Schedule of Reconciliation of Undiscounted Cash Flows Related to Operating Lease Liabilities (Details) - USD ($) $ in Thousands	May 04, 2024	Feb. 03, 2024
Leases [Abstract]
2023 (remaining)	$ 31,965
2024	47,074
2025	35,037
2026	28,001
2027	19,978
Thereafter	39,695
Total minimum lease payments	201,750
Less: amount of lease payments representing interest	32,523
Present value of future minimum lease payments	169,227
Less: current obligations under leases	34,644	$ 37,221
Long-term lease obligations	$ 134,583	$ 117,316

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Long-Term Incentive Plans - Additional Information (Details) - USD ($)	3 Months Ended
	May 04, 2024	Apr. 29, 2023	Mar. 06, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Incentive plan performance targets covering period	3 years
Vesting terms	The performance period for each LTIP is three years. Awards for any achievement of performance targets will not be granted until the performance targets are achieved and then will be subject to an additional service requirement through August 31, 2025, August 31, 2026 and August 31, 2027, respectively. The time-based awards under the 2022-2024 LTIP, the 2023-2025 LTIP, and the 2024-2026 LTIP vest in four equal installments through April 1, 2026, April 1, 2027 and April 1, 2028, respectively.
Restricted stock units (RSUs) granted for achievement of performance-based compensation, reclassified from liability to equity		$ 1,146,000
2021-2023 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Incentive plan performance targets covering period	3 years
Time Based Vesting Schedule
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting percentage	50.00%
Time Based Vesting Schedule | 2022-2024 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total expected compensation cost of long term incentive plans	$ 4,800,000
Total amortization period	48 months
Time Based Vesting Schedule | 2023-2025 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total expected compensation cost of long term incentive plans	$ 5,100,000
Total amortization period	47 months
Time Based Vesting Schedule | 2024-2026 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total expected compensation cost of long term incentive plans	$ 5,300,000
Total amortization period	49 months
Performance Based Vesting Schedule
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting percentage	50.00%
Performance Based Vesting Schedule | 2021-2023 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total award approved for grant			$ 3,000,000
Performance Based Vesting Schedule | 2022-2024 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Incentive accrual during period	$ 1,400,000
Performance Based Vesting Schedule | 2023-2025 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Incentive accrual during period	0
Performance Based Vesting Schedule | 2024-2026 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Incentive accrual during period	$ 100,000
RSUs | 2022-2024 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting percentage	50.00%
RSUs | 2023-2025 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting percentage	50.00%
RSUs | 2024-2026 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting percentage	50.00%
Cash | 2022-2024 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting percentage	50.00%
Cash | 2023-2025 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting percentage	50.00%
Cash | 2024-2026 LTIP
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Vesting percentage	50.00%

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Stock-Based Compensation - Additional Information (Details) - USD ($)			3 Months Ended
	Aug. 11, 2023	Aug. 04, 2016	May 04, 2024	Apr. 29, 2023	Feb. 03, 2024
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options granted			0
Stock compensation expense			$ 875,000	$ 404,000
Non Employee Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares of common stock issued			8,412
Fair value of common stock issued			$ 34,994
RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Fully-vested shares			129,112
PSUs | Mr. Kanter
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Volume-weighted closing price of the Company's common stock, number of days	30 days
Shares granted	573,000
Vesting description	The award consists of nine tranches, with the first tranche vesting if and when the 30-day volume-weighted closing price of the Company's common stock is equal to or greater than $6.50 per share. Each subsequent tranche will vest upon achievement of the 30-day volume-weighted closing price of the Company's common stock in $0.25 increments with the ninth tranche vesting when such price is equal to or greater than $8.50 per share. The PSUs are subject to a one-year minimum vesting period, and any unvested PSUs will expire on August 11, 2026.
Time Vested Stock Options, RSU and PSU Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized stock compensation cost			$ 3,900,000
Unrecognized stock compensation cost weighted average recognition period			30 months
2016 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Reduction in outstanding reserve for share granted		1.00%
Reduction in outstanding reserve for share granted, full-value award		1.90%
Shares authorised			15,120,538
Shares available for grant			1,445,584
Share-based compensation arrangement by share-based payment award, description			In accordance with the terms of the 2016 Plan, any shares outstanding under the previous 2006 Incentive Compensation Plan (the “2006 Plan”) at August 4, 2016 that subsequently terminate, expire or are cancelled for any reason without having been exercised or paid are added back and become available for issuance under the 2016 Plan, with stock options being added back on a one-for-one basis and full-value awards being added back on a 1 to 1.9 basis. At May 4, 2024, 59,254 stock options remained outstanding under the 2006 Plan.
Stock option outstanding			3,030,394		3,180,739
Percent of shares available for awards		5.00%
Share-based compensation description			Except with respect to 5% of the shares available for awards under the 2016 Plan, no award will become exercisable unless such award has been outstanding for a minimum period of one year from its date of grant.
Options granted				1,316
Shares granted			394,863
Fully-vested shares			138,846
2016 Plan | RSUs
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted			376,416	270,867
Fully-vested shares			129,112
2016 Plan | Fully-vested shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted			9,734
Fully-vested shares			9,734	2,844
2016 Plan | Deferred stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted			8,713
2006 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock option outstanding			59,254

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Stock-Based Compensation - Summary of Share Activity and Stock Option Activity (Details) - $ / shares	3 Months Ended
	May 04, 2024	Apr. 29, 2023
RSUs
Total number of shares
Shares vested and/or issued	(129,112)
2016 Plan
Total number of shares
Outstanding non-vested shares at beginning of year	1,544,853
Shares granted	394,863
Shares vested and/or issued	(138,846)
Outstanding non-vested shares at end of quarter	1,800,870
Weighted-average Grant-Date Fair value
Outstanding non-vested shares at beginning of year	$ 3.53
Shares granted	3.58
Shares vested and/or issued	4.67
Outstanding non-vested shares at end of quarter	$ 3.46
2016 Plan | RSUs
Total number of shares
Outstanding non-vested shares at beginning of year	536,285
Shares granted	376,416	270,867
Shares vested and/or issued	(129,112)
Outstanding non-vested shares at end of quarter	783,589
2016 Plan | Deferred stock
Total number of shares
Outstanding non-vested shares at beginning of year	435,568
Shares granted	8,713
Outstanding non-vested shares at end of quarter	444,281
2016 Plan | Performance Share Units
Total number of shares
Outstanding non-vested shares at beginning of year	573,000
Outstanding non-vested shares at end of quarter	573,000
2016 Plan | Fully-vested shares
Total number of shares
Shares granted	9,734
Shares vested and/or issued	(9,734)	(2,844)

XML

Stock-Based Compensation - Summary of Share Activity and Stock Option Activity (Parenthetical) (Details) - USD ($)		3 Months Ended
	Aug. 11, 2023	May 04, 2024	Apr. 29, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options granted		0
Expected term			2 years 6 months
Common Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted during the period, fair value		$ 1,000	$ 3,000
Director
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted during the period, fair value		$ 40,493,000
2024-2026 LTIP | Common Stock
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares sold		115,292
2016 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares vested		138,846
Shares granted		394,863
Options granted			1,316
Restricted stock units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares vested		129,112
Restricted stock units | 2016 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares vested		129,112
Shares granted		376,416	270,867
Performance Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted during the period, fair value	$ 2,400,000
Stock price on date of grant	$ 4.98
Weighted historical volatility rate	57.80%
Expected term	3 years
Risk-free rate	4.60%
Share based compensation fair value assumptions cost of equity	11.00%
Performance Stock Units | Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Derived service period	12 months
Performance Stock Units | Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Derived service period	13 months
Performance Stock Units | Mr. Kanter
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted	573,000
Vesting description	The award consists of nine tranches, with the first tranche vesting if and when the 30-day volume-weighted closing price of the Company's common stock is equal to or greater than $6.50 per share. Each subsequent tranche will vest upon achievement of the 30-day volume-weighted closing price of the Company's common stock in $0.25 increments with the ninth tranche vesting when such price is equal to or greater than $8.50 per share. The PSUs are subject to a one-year minimum vesting period, and any unvested PSUs will expire on August 11, 2026.
Volume-weighted closing price of the Company's common stock, number of days	30 days
Performance Stock Units | Mr. Kanter | Minimum | First Tranche
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Closing price	$ 6.5
Performance Stock Units | Mr. Kanter | Minimum | Ninth Tranche Vesting
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Closing price	$ 8.5
Deferred stock | Director
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted during the period, fair value		$ 36,246
Deferred stock | 2016 Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted		8,713

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Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	May 04, 2024 USD ($) $ / shares shares
2016 Plan
Number of shares
Outstanding options at beginning of year	3,180,739
Options exercised	(132,397)
Options expired	(16,233)
Options forfeited	(1,715)
Outstanding options at end of quarter	3,030,394
Options exercisable at end of quarter	2,790,202
2006 Plan
Number of shares
Outstanding options at end of quarter	59,254
Weighted-average exercise price per option
Outstanding options at beginning of year | $ / shares	$ 0.75
Options exercised | $ / shares	0.58
Options expired and canceled | $ / shares	5.29
Options forfeited | $ / shares	0.75
Outstanding options at end of quarter | $ / shares	0.73
Options exercisable at end of quarter | $ / shares	$ 0.73
Weighted-average remaining contractual term
Outstanding options	6 years 3 months 18 days
Options exercisable at end of quarter	6 years 2 months 12 days
Aggregate Intrinsic Value
Outstanding options at beginning of year | $	$ 10,962
Options exercised | $	388
Options forfeited | $	5
Outstanding options at end of quarter | $	7,761
Options exercisable at end of quarter | $	$ 7,158

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Equity and Earnings per Share - Additional Information (Details) - shares	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Deferred Stock
Earnings Per Share [Line Items]
Shares excluded from computation of basic and diluted earnings per share	444,281	435,568
Stock Options
Earnings Per Share [Line Items]
Shares excluded from computation of basic and diluted earnings per share	73,000	17,000
Stock Options | Minimum
Earnings Per Share [Line Items]
Share-based compensation arrangement, expiration date	Jun. 01, 2024
Stock Options | Maximum
Earnings Per Share [Line Items]
Share-based compensation arrangement, expiration date	Mar. 20, 2033
Performance Stock Units
Earnings Per Share [Line Items]
Shares excluded from computation of basic and diluted earnings per share	573,000

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Equity and Earnings per Share - Reconciliation of Number of Shares Outstanding for Basic and Diluted Earning Per Share (Details) - shares shares in Thousands	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Common stock outstanding:
Basic weighted average common shares outstanding	58,036	62,690
Common stock equivalents - stock options, restricted stock units and deferred stock	2,927	3,626
Diluted weighted average common shares outstanding	60,963	66,316

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Equity and Earnings per Share - Potential Common Stock Equivalents Excluded from Computation of Diluted Earning Per Share (Details) - $ / shares shares in Thousands	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti dilutive shares	73	17
Range of exercise prices of such options, minimum	$ 4.48	$ 4.48
Range of exercise prices of such options, maximum	$ 6.59	$ 7.43
Restricted Stock Units and Deferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti dilutive shares	545	9

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Income Taxes - Additional Information (Details)	3 Months Ended
	May 04, 2024	Apr. 29, 2023
Income Tax Disclosure [Abstract]
Effective tax rate	30.40%	26.60%

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Fair Value Measurement - Fair Value Measured at Recurring Basis (Details) - USD ($) $ in Thousands	May 04, 2024	Feb. 03, 2024
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments, fair value	$ 36,891	$ 32,459
Recurring | Carrying Value | U.S. Treasury Bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents, fair value		6,047
Short-term investments, fair value	36,891	32,459
Level 1 | Recurring | Fair Value | U.S. Treasury Bills
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents, fair value		6,052
Short-term investments, fair value	$ 36,869	$ 32,479

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Stock Repurchase Program - Additional Information (Details) - USD ($)	3 Months Ended
	May 04, 2024	Mar. 16, 2023
Equity, Class of Treasury Stock [Line Items]
Accrued payment of excise taxes	$ 200,000
Number of shares repurchased	52,802
Percent of excise tax on repurchase of shares	1.00%
Percentage of credit permitted to offset liability	1.00%
Aggregate cost of repurchased shares	$ 211,182
Common Stock | Maximum
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, repurchase amount		$ 25,000,000