Duluth Holding (DLTH) is a company that may be best known for its “No Bull Guarantee” and its unique and humorous advertising. As for its products, the company offers solution-based casual wear that is rather high quality (and hence pricey) as well as various lines of workwear and accessories. While the company’s primary niche has always been men historically, in recent times the company has aggressively shifted its focus toward women.

What we find interesting is that this publicly traded company has focused most heavily in recent years on driving customers to its e-commerce site. While the company’s products are sold exclusively through its website, catalogs, and “store like no other” retail locations, we think the strength and future of the company rests with its approach to driving e-commerce sales.

The stock, however, has faced some pressure recently, but we think this is setting the name up nicely for a potential rebound trade:

Source: Yahoo Finance, Quad 7 Capital overlaid graphics

As you can see, the name has been volatile. We think this allows for a nice potential trade to be made here. Let us discuss the fiscal side of the business a bit more.

We thought Duluth’s fiscal 2017 was a year of solid growth given 25% top-line growth and 23% growth in total new customers. It has not rushed to expand either, at least physically as the company opened 15 stores and continued to expand in the Eastern and Western United States. Net sales in the men’s business grew 22% and the women’s business grew 37%, exceeding the $100 million milestone. What is more, this was the 32nd consecutive quarter of increased net sales year-over-year.

Sales were strong in the most recent quarter. Net sales increased 24.7% to $217.8 million, compared to $174.7 million in the same period a year ago. The net sales increase was driven by a 8.5% growth in direct net sales and a 98.8% growth in retail net sales, with growth in all product categories. That is a substantial victory. But is the company doing well on margins?

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