Total sales for the quarter ended May 2, 2026, fell 2.1 per cent year-on-year (YoY) to $103.3 million, while comparable sales declined 3.8 per cent compared to Q1 FY25. The company posted a net loss of $5.9 million, or $(0.11) per diluted share, against a net loss of $1.9 million, or $(0.04) per diluted share, in the prior-year quarter. Adjusted EBITDA stood at a loss of $(0.7) million, compared to positive adjusted EBITDA of $0.2 million a year earlier.
“We are encouraged by our first quarter results, which reflect an improving sales performance and continued progress towards our strategic priorities,” said Harvey Kanter, president and chief executive officer of DXL. “We saw positive momentum in key areas of the business, including higher conversion rates and increased average order value across both stores and online.”
American men’s big and tall retailer DXL has reported Q1 FY26 sales of $103.3 million, down 2.1 per cent YoY, with comparable sales declining 3.8 per cent.
Net loss widened to $5.9 million, while adjusted EBITDA slipped into negative territory.
The company highlighted progress in FiTMAP fit technology and AI initiatives, while macroeconomic pressures continued to impact performance.
The company said that weaker traffic, particularly in physical stores, remained the primary driver behind the comparable sales decline, although improvements in conversion and transaction value partly offset the pressure. Direct business sales improved during the quarter, supported by paid search, social media marketing efforts, and enhancements to the company’s website and mobile app, DXL said in a press release.
The company highlighted growing interest in its FiTMAP technology platform, which offers personalised fit recommendations. During the quarter, DXL completed the rollout of FiTMAP in 188 stores. More than 100,000 customers have used the platform since launch, with the company reporting higher conversion rates, increased purchase frequency and lower return rates among users.
DXL expands AI-driven e-commerce initiatives
DXL also increased its focus on artificial intelligence (AI) initiatives to improve product discoverability and strengthen e-commerce capabilities. The company launched projects aimed at enhancing product data quality, inventory connectivity and AI-enabled search relevance as digital shopping becomes increasingly conversational and agent-driven.
In addition, DXL said it is monitoring the impact of GLP-1 and similar weight-loss medications on customer demand and sizing behaviour. The company is adjusting assortments in smaller sizes and refining merchandising and customer engagement strategies in response to evolving consumer needs.
Gross margin pressured by tariffs and freight costs
The gross margin for Q1 FY26 declined 80 basis points to 44.3 per cent, primarily due to tariff impacts, higher shipping costs from fuel surcharges and increased markdown activity linked to clearance sales. The decline was partly offset by improved private-brand merchandise mix and favourable loyalty costs.
Selling, general and administrative (SG&A) expenses accounted for 45 per cent of sales, broadly flat compared to last year. Marketing expenses rose to 6.5 per cent of sales during the quarter as the retailer increased customer acquisition and engagement efforts.
The company ended the quarter with cash and investments of $16.2 million, down from $29.1 million a year earlier, while maintaining a debt-free balance sheet.
During the quarter, DXL closed one DXL retail store and one Casual Male XL outlet store. The company expects fiscal 2026 capital expenditure to range between $8 million and $12 million, primarily focused on technology investments, store relocations and format conversions.
Fibre2Fashion News Desk (DS)
