DXLG

Image source: The Motley Fool. Wednesday, Sept. 9, 2026 at 9:00 a.m. ET Vice President of Financial Reporting and SEC Compliance - Shelly Mokas Interim Chief Executive Officer - Lionel Conacher Chief Financial Officer - Peter Stratton Chief Growth Officer - James Olsson Operator: Good day, everyone, and welcome to Destination XL Group, Inc.'s conference call to discuss our second quarter fiscal 2026 financial results. Today's call is being recorded. At this time, I would like to turn the call over to Ms. Shelly Mokas, Vice President of Financial Reporting and SEC Compliance at DXL. Please go ahead, Shelly. Shelly Mokas: Thank you, operator, and good morning, everyone. We appreciate your joining us on Destination XL Group's Second Quarter Fiscal 2026 Earnings Call. Joining me today are Lionel Conacher, our Interim Chief Executive Officer; Peter Stratton, our Chief Financial Officer; and Jimmy Olsson, our new Chief Growth Officer. During today's call, we will reference certain non-GAAP financial measures that we will -- that we believe provide useful supplemental information regarding our performance. Please refer to our earnings release, which was filed this morning and is available on our Investor Relations website for additional information and reconciliation of those measures. Today's discussion will also include forward-looking statements regarding the company's strategic initiatives, marketing strategies, store rationalization work, expectations for comparable sales, the impact of tariffs, update regarding the merger and other expectations for fiscal 2026. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations. Additional information regarding those risks and uncertainties is included in the company's filings with the Securities and Exchange Commission. With that, I will turn the call over to our Interim CEO, Lionel Conacher. Lionel? Lionel Conacher: Thank you, Shelly, and good morning, everyone. I'm honored to join today's call as DXL's Interim Chief Executive Officer at an important time for the company. I want to begin by recognizing Harvey Kanter for his leadership and contributions to DXL over more than 7 years as CEO. Harvey helped strengthen DXL's position as the leading specialty retailer in men's big and tall. And on behalf of the Board of Directors and the entire management team, I want to thank Harvey for his service and wish him well in retirement. Just a few words about myself. I've been involved with DXL as a director since 2018 and have served as Chairman since 2020. During my time with DXL, I have developed a deep appreciation for the company, its people and most importantly, the big and tall customer. We have a strong brand, a loyal customer base, a clear understanding of our customers' priorities. The differentiated leadership position that we have established in this underserved market gives us a strong foundation on which to build, grounded in our commitment to serving the big and tall customer. Our priorities from here are straightforward. We are focused on increasing traffic and revenue, strengthening customer engagement, improving profitability and advancing strategic initiatives that can support long-term growth. The second quarter earnings results we reported today are a testament to progress we are already making in these efforts. Our business continues to improve, and we see clear signs that a resumption in sales growth is imminent. Q2 sales performance was consistent with the progress we reported in the first quarter, which is a significant improvement over our prior year's results. I'm incredibly excited about the opportunities ahead for DXL and proud to be speaking with you all about our momentum today. Before we dive into the quarter, I'd like to introduce Jimmy Olsson, who has worked with DXL in a consulting role for the past 12 months and recently joined us as full-time as Chief Growth Officer. Jimmy comes to DXL with a deep background in retail strategy, brand elevation and scaling omnichannel platforms through marketing, merchandising and product development. This newly created role of Chief Growth Officer brings together the customer-facing levers of the business, and Jimmy's perspective will be instrumental as we execute against the traffic, assortment, promotional and store experience opportunities in front of us. Jimmy has held leadership positions at a number of blue-chip retailers, including Walmart, American Eagle, Tommy John, Todd Snyder and -- the Gap. On behalf of the DXL Board of Directors, I am thrilled to welcome Jimmy to DXL. You will hear directly from Jimmy for a deeper dive into our growth priorities and initiatives. To frame up the balance of today's remarks, in just a moment, I'm going to turn the call over to Peter to give you an update on our second quarter performance, sales trends, margin and liquidity. After that, Jimmy is going to talk about our go-forward strategy and priorities before I come back to close things out. So with that, I'm going to ask Peter to give you an update on our financial results. Peter? Peter Stratton: Thank you, Lionel, and good morning, everyone. Our second quarter sales were generally in line with our expectations and remain consistent with the year-over-year improvement in trends that we saw in Q1. Net sales were $111.6 million, down 3.4% from last year, and our adjusted EBITDA was $7.7 million or 6.9% of sales compared with $4.7 million last year, while adjusted earnings per share was $0.05 compared with last year's $0.01 result. Comparable sales were down 3.5% for the quarter, with stores down 4.3% and our direct business down 1.6%. Monthly comps improved sequentially from negative 5.7% in May to negative 2.8% in June and then negative 1.9% in July. Store traffic remains our most significant challenge, although we continue to be encouraged by strong conversion and dollars per transaction, which helped offset some of that traffic pressure. In direct, we saw improvement in conversion driven by enhancements to the app and overall site experience, and we also benefited from solid performance in clearance product, primarily through the direct channel. More broadly, the direct business generated demand through paid search, paid social and programmatic marketing, while ongoing improvements in app performance, site experience and speed supported better conversion. We continue to evaluate our marketing allocation carefully to strike the right balance between attracting new customers, where we have seen acquisition rate increases since the fourth quarter and reengaging repeat and lapsed customers where spending remains more cautious. Encouragingly, when new customers discover DXL, they continue to respond well to our assortment, fit and value proposition. Based on customer surveys and related insights, the overall slowdown in customer traffic appears to reflect a combination of weight loss journeys, shifting spending priorities and delayed purchasing decisions. Importantly, we believe the underlying affinity for the DXL experience remains strong. Although we still have meaningful work ahead, we are encouraged by the improvement in the quarter and confident that our turnaround efforts are beginning to gain traction. Our merchandising efforts remain focused on sharpening value, strengthening private brands and improving inventory flow to better align with current demand. We are leaning further into private brands, particularly Harbor Bay as an opening price point and value driver, while continuing to improve storytelling around quality, fit and value across channels. Our creative and messaging have become more focused on essentials, cost per wear and trusted fit, reinforcing our position with a more value-conscious customer. We are also rebalancing the promotional calendar toward higher margin and higher inventory risk categories so that promotions can help drive demand while protecting profitability and reducing future inventory exposure. Another topic that I'd like to touch on quickly is IEEPA tariff refunds. Towards the end of the first quarter, we submitted a claim to the U.S. Customs and Border Protection online portal, and I'm pleased to report that we received a refund of $4.6 million during the second quarter, which benefited merchandise margin and improved adjusted EBITDA versus plan. Gross margin, inclusive of occupancy costs, was 47.9%, up 270 basis points from last year, primarily driven by this refund. Excluding the tariff refund, merchandise margin would have been approximately 70 basis points worse than last year, primarily due to a higher markdown rate to move through slower-moving seasonal product and increased shipping costs due to fuel surcharges. Occupancy costs were flat in dollars, but deleveraged versus last year due to lower sales. Selling, general and administrative expenses were 41% of sales with advertising expense coming in at 6.1% of sales, generally in line with last year. We continue to look very carefully at SG&A across the organization, reducing corporate expenses where appropriate and rationalizing our store base over the next several years as leases expire or kickout rights become available. The punchline here is we need to improve our return on assets. Targeting stores that have a high probability of transferring volume to another store allows us to make the total store portfolio more productive. In certain markets, we believe there are opportunities to rationalize high occupancy stores and redirect customers to other stores in the market. The store rationalization work will have limited impact in 2026, but it is expected to reduce occupancy and store operating costs beginning in 2027 and beyond. This is a multiyear project that should improve sales per square foot and 4-wall profit over time. I'll close with an update on the continued strength of our balance sheet. We ended Q2 with $20.1 million of cash and investments on hand, no debt and excess availability of $61.7 million. Most importantly, our balance sheet gives us flexibility. Our inventory levels are clean and stable. Inventory turnover is strong and clearance levels are in line with our 10% targets. Preserving working capital remains a priority, and we have paused all nonessential uses of cash while funding only the most important and required initiatives for the business. These targeted growth initiatives are already bearing fruit as evidenced by this quarter's comparable sales result of negative 3.5%, the strongest we have delivered in the past 3 years. I'd now like to turn it over to Jimmy to talk more about those initiatives and elaborate on our marketing and merchandising strategies. Jimmy? James Olsson: Thank you, Peter, and good morning, everyone. I'm excited to join DXL and be leading our growth agenda across merchandising, marketing, direct and stores. The second quarter reinforced both the strength of the DXL proposition and the work still ahead to drive more traffic, sharpen product storytelling and create stronger reasons for customers to shop with us. I want to organize my comments on today's call around the internal growth strategy we are calling Fit for Growth. In the simplest terms, this strategy consists of 4 strategic pillars: supercharging our Fit Authority, fueling growth in our private brands, building our brand awareness and go-to-market strategy, and lastly, driving new customer acquisition. Our first priority is supercharging our Fit Authority. This is the foundation of what makes DXL different, and it starts with the initiative that has positioned DXL at the leading edge of fit centricity, FITMAP. We've now scanned more than 150,000 customers and our most recent 12-month cohort shows scanned customers spending more than they did before scanning with stronger conversions, higher AOV, increased visits and a meaningfully lower return rate than non-scanned customers. Scan penetration, simply getting more of our customer file measured, remains our single largest lever inside this program. Fit Authority is also the right lens for how we're addressing a genuine structural shift in our customer with GLP-1 medication adoption. Based on our customer surveys, a meaningful portion of our customer base is currently using GLP-1 medications and it is indicated while they are on their weight loss journey, they stop buying apparel altogether for a period, but a majority tell us that they intend to come back to DXL once they reach a stable size. We believe being the authority on fit means staying with this customer through that transition, not just at a single point in time. And we're building a specific communication journey tied to FITMAP scan segments to do exactly that. Our second priority is fueling growth in our private brands. Private brand penetration continues to grow year-over-year. Our THERMACHILL franchise, which is a new product development technology built into our tech pants, shorts and button-down shirt is one of our cleanest growth bets inside this priority. THERMACHILL features dual temperature regulation to keep you cool when it's hot outside and warmer when it cools down. Our year-to-date demand for THERMACHILL product grew 56% over last year, proof that when we invest choice count and marketing behind a private brand franchise that's genuinely working, it scales. We also continue to see that targeted product-specific promotions outperform broad discounting. That discipline is protecting merchandise margin even as we work through a softer traffic environment, and it's a direct extension of what fueling private brand growth actually means in practice, winning through product and value, not through the depth of the discount. Our third priority is building our brand awareness and evolving our go-to-market strategy. As we continue to evolve our marketing investment from lower funnel spend toward mid- and upper funnel tactics, we're running tests in select markets to get in front of him where he consumes media. Our brand awareness remains below the category average and the current marketing mix has been heavily weighted toward bottom-of-funnel conversion. We are reallocating, not adding to, the advertising budget over time to support a more balanced funnel, including incremental testing in YouTube and programmatic channels. We're already seeing early proof points. Awareness in our core demographic of 35- to 64-year-olds with household incomes above $100,000 has moved from 40% to 49% in 7 months. This priority is also where our AI discoverability work sits. Through a focused effort on generative and answer engine optimization, we've moved our Trustpilot sentiment score from 1.5 to 4.4, a concrete, inexpensive proof point that the go-to-market investment behind agentic and AI-initiated search is paying off before the larger infrastructure is even fully built. Our fourth priority is driving new customer acquisition. I want to be direct and transparent with you that this is the priority most exposed by this quarter's traffic miss. We are behind the pace we'd like on both new customer acquisition and reactivation right now. This is why priorities 1 through 3 matter so much. Fit Authority and FITMAP give customers a differentiated reason to choose us and stay. Expanding private label lets us deliver more value, helping attract new customers and grow our base. And brand awareness is what actually gets a new or lapsed customer to notice us in the first place. Acquisition doesn't happen in isolation. It's the output of the other 3 priorities working together, and it's the priority we're most focused on moving over the balance of the year. Before I turn the call back over to Lionel, I want to leave you with this one thread. Traffic and customer acquisition are the challenge underlying essentially everything I just described and this Fit for Growth strategy is our coordinated response, not 4 separate initiatives, but one solution viewed through 4 distinct lenses. I'd like to thank Lionel and the Board of Directors for this opportunity. I'm so excited to be working on solutions that are going to move the needle for DXL and the big and tall customer we are proud to serve. Lionel? Lionel Conacher: Thanks, Jimmy. Before we open the line for questions, I want to provide a brief update on the status of our proposed merger with FullBeauty. On September 2, DXL filed an updated preliminary proxy statement with respect to the merger. As detailed in this filing, conditions have changed since we first entered into the merger agreement in December, causing FullBeauty's operating performance, financial results and balance sheet positioning to deteriorate. Our Board takes its fiduciary duties to our stockholders seriously and to that end, has continued to evaluate the merger in light of these developments. Based on this evaluation, the Board determined that the merger is no longer in the best interest of DXL and its stockholders. Accordingly, the Board has withdrawn its prior recommendation in favor of the merger and now unanimously recommends that stockholders vote against the issuance proposal. There were several factors that contributed to this decision. The increasingly challenging consumer environment since 2025 of December. FBB's continuing decline in operating performance and financial results, including lower-than-expected net sales, earnings, EBITDA and cash flow. The corresponding heightened risk that FBB will not achieve its projections for the current fiscal year. Their increased level of indebtedness, concerns regarding the potential negative equity value and the substantial economic dilution that our stockholders would experience if the merger were consummated on its current terms. In terms of next steps in this process, we are currently awaiting SEC review of the amended preliminary proxy statement. Once we receive SEC clearance, we will file and mail definitive proxy materials to all stockholders eligible to vote at the special meeting, which will be held in 20- to 25-day window following the definitive proxy filing. The proxy statement can be found on the landing page of our investor web page at investor.dxl.com. We encourage stockholders to read the proxy statement carefully and in its entirety. Beyond that, we are not commenting further on the merger at this time. We ask that you keep your questions on today's call focused on second quarter operational and financial performance. In closing, as you just heard, we are taking focused steps to advance the strategic priorities we believe can meaningfully strengthen the business over time. Three of the most important are FITMAP, our application of AI and our work to better understand GLP-1-related customer behavior. What connects these priorities is that each reflects a meaningful shift in how our customer shops, how he discovers products and how we need to evolve to serve him more effectively. Together, these are strategic growth levers that we believe can improve customer engagement and sharpen our competitive position and create more durable long-term value. We have a differentiated position in an underserved market, a powerful relationship with the big and tall customer and a team that understands how to serve him. The actions we are taking to strengthen the business, drive growth and improve profitability are beginning to translate into encouraging improvements in our performance. And our fortress balance sheet provides us with a strong underlying foundation for the growth engine we are building. I am confident in our ability to capture the meaningful value creation opportunities ahead. With that, operator, we will now take questions. Operator: [Operator Instructions] Our first question comes from [Joseph Midkiff] of [226 B] Capital Partners. Unknown Analyst: There was mention of reviewing store base as leases come due, particularly in markets with multiple locations. I was curious if we could clarify how many leases would be coming up for renewal in total over the next 24 months? And how many or what percentage of those might be potential candidates for closure or consolidation? Peter Stratton: Sure. I'll take that one. This is Peter. So we've been spending a fair amount of time taking a look at the portfolio. And as I mentioned in my remarks, we need to make our assets more productive. So in instances where we have more than one store in a market that we believe we can eliminate a store, drive that volume to the nearby sister store, it improves our return on assets. And that's really the big focus. For this year, there's a handful of stores that are closing. I want to say, 3 stores this year. Next year, the stores that are coming up for lease and renewal, there's going to be a few dozen that are coming up. Now those are not all closing. We are going to be looking at those on a case-by-case basis, and we'll be developing those plans really over the next 6 months to figure out how many more we'll be closing. But ultimately, it's about improving our sales per square foot in the existing portfolio and making sure that we can get the most return out of those assets. Unknown Analyst: Fantastic. Excited to hear about the return on asset focus there. If I could follow up, you mentioned as well the potential for pausing any cash investments that can be deferred. Is that something that you could quantify the impacts of or speak at all to what specifically -- what areas specifically have been targeted for pausing or removing? Peter Stratton: So the majority of our capital spend this year is in our technology upgrades and improvements. Our distribution center, and there's a small amount in stores. The majority of that is going to be in distribution and in technology. So we are -- we have a number of projects going on right now to make sure we're staying current with the latest releases of all of our software platforms. But in some cases, we're going to try to push those out a little further. When our vendors start taking platforms to end of life and we're required to upgrade, well, those are the situations that we're going to have to deal with. But we're trying to avoid any upgrades that will burn cash until we see more stability in our comp trends in the near future. Unknown Analyst: I appreciate the tone of the call shifting to a realization of what's happening in the business, and I'll jump back in the queue. Thanks again, guys. Operator: I'm showing no further questions at this time. I'd like to turn it back to Lionel Conacher for closing remarks. Lionel Conacher: Thank you, operator, and thank you, everybody, for listening in today, and we appreciate your interest in DXL. And with that, we'll close out the meeting. Thank you. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Destination XL (DXLG) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

Sales of $111.6 million, Net Income of $0.04 per diluted share, Adjusted Net Income of $0.05 per diluted share CANTON, Mass., Sept. 09, 2026 (GLOBE NEWSWIRE) -- Destination XL Group, Inc. (NASDAQ: DXLG)(“DXL” or the “Company”), the leading integrated-commerce specialty retailer of Big + Tall men’s clothing and footwear, today reported operating results for the second quarter of fiscal 2026. Second Quarter Financial Highlights Total sales for the second quarter were $111.6 million, down 3.4% from $115.5 million in the second quarter of fiscal 2025. Comparable sales for the second quarter of fiscal 2026 decreased 3.5% as compared to the second quarter of fiscal 2025. Net income for the second quarter was $2.0 million, or $0.04 per diluted share, as compared to a net loss of $(0.3) million, or $0.00 per diluted share, for the second quarter of fiscal 2025. Net income for the second quarter of fiscal 2026 includes a refund for tariffs of $4.6 million. Adjusted net income (a non-GAAP measure) for the second quarter was $0.05 per diluted share as compared to an adjusted net income of $0.01 per diluted share for the second quarter of fiscal 2025. Adjusted EBITDA (a non-GAAP measure) for the second quarter was $7.7 million as compared to $4.7 million for the second quarter of fiscal 2025. Total cash and investments were $20.1 million at August 1, 2026, as compared to $33.5 million at August 2, 2025, with no outstanding debt for either period. Management’s Comments “DXL’s singular commitment to serving the Big + Tall customer has allowed us to establish a differentiated leadership position in an underserved market that represents meaningful opportunities for future growth. We have a strong brand, loyal customer base and a clear understanding of our customers’ priorities. As we navigate a dynamic consumer environment, our team is focused on delivering the right product and value, deepening our engagement with customers across channels and operating the business with greater discipline,” said Lionel F. Conacher, Chairman and Interim Chief Executive Officer. “Our second quarter results show encouraging sequential improvement in comparable sales trends and continued progress on the actions we are taking to strengthen the business. Comparable sales improved from down 5.7% in May, to down 2.8% in June, and down 1.9% in July, even as traffic remained under pressure across stores and digital. While there is more work ahead, we remain confident that our disciplined operating approach and focus on execution will position us to drive continued performance improvements over the remainder of the year,” Mr. Conacher concluded. Strategic Priorities We continue to advance several strategic initiatives designed to strengthen our market leadership in the big + tall sector while enhancing the customer experience across channels. FiTMAP® We have exclusive rights to our fit technology platform until 2030. FiTMAP® remains one of the Company’s most important long-term growth drivers. This FiTMAP technology is currently available in 188 stores. Since launch, over 150,000 customers have engaged with the platform, and early results continue to reinforce its value. Customers who use FiTMAP have demonstrated stronger conversion, higher average order values, greater purchase frequency and lower return rates, underscoring the role personalized fit can play in driving both customer satisfaction and profitable growth. Leverage AI We are sharpening our focus on artificial intelligence (“AI”) as consumer shopping behavior evolves. As the Company believes AI-powered search and discovery tools may become increasingly important in ecommerce, the Company is investing to ensure that its products and content are more visible, relevant and accessible in these emerging environments. We have launched new AI initiatives to improve product data quality, enrich item-level attributes and strengthen our ability to connect product, pricing and inventory information across AI-enabled platforms. These efforts are intended to improve discoverability, support future commerce applications and position the Company to compete effectively as digital shopping journeys become more conversational and agent-driven. GLP-1 Medications and Similar Weight-Loss Medications We continue to deepen our understanding of how the use of glucagon-like peptide-1 (“GLP-1”) medications and similar weight-loss medications may be influencing customer behavior and category demand. Our research indicates that a meaningful portion of our customer base is currently using GLP-1 medications, contributing to more dynamic sizing needs over time. We are responding thoughtfully by broadening select assortments in smaller sizes and using customer insights to inform future merchandising, marketing and re-engagement strategies. Importantly, the Company sees this as both a near-term challenge and a long-term opportunity: while some customers may pause apparel purchases during periods of rapid size change, many express an intention to return once they reach a more stable size profile. By staying closely aligned with these evolving customer needs, we believe we can strengthen retention, reactivation and lifetime value over time. Merger with FullBeauty In connection with the merger with FBB Holdings I, Inc., a Delaware corporation (“FullBeauty”), we filed an Amendment No. 1 to Preliminary Proxy Statement (as amended, the “Preliminary Proxy Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) on September 2, 2026. As described in the Preliminary Proxy Statement, our Board of Directors (the “DXL Board”), as part of its ongoing fiduciary duties to the Company’s stockholders, has continued to evaluate the merger. As part of that evaluation, the DXL Board has considered, among other things, (i) the increasingly challenging consumer environment since the execution of the merger agreement in December 2025, (ii) FullBeauty’s continuing decline in operating performance and financial results, including lower-than-expected net sales, net income (loss), adjusted EBITDA and cash flow from operations as compared to both prior-year performance and prior projections (and the corresponding heightened risk that FullBeauty will not achieve its projections for the current fiscal year), (iii) FullBeauty’s increased level of indebtedness, (iv) concerns regarding FullBeauty’s potential negative equity value, and (v) the substantial economic dilution that DXL stockholders would experience if the merger were consummated on its current terms. Based on this evaluation, including these considerations, the DXL Board has determined that the merger and the transactions contemplated by the merger agreement, including the issuance proposal, are no longer advisable and are not in the best interests of DXL and its stockholders. The DXL Board encourages stockholders to read carefully in their entirety the Preliminary Proxy Statement and the Definitive Proxy Statement, when it becomes available, and urges stockholders to carefully consider the DXL Board’s recommendation that stockholders vote “AGAINST” the issuance proposal. The Preliminary Proxy Statement can be found on DXL’s investor relations website at investor.dxl.com or the SEC’s website at www.sec.gov. Second Quarter Results Sales Total sales for the second quarter of fiscal 2026 were $111.6 million, as compared to $115.5 million for the second quarter of fiscal 2025. The decrease in total sales was primarily attributable to a decrease in comparable sales for the second quarter of 3.5%, partially offset by an increase in non-comparable store sales. Comparable sales decreased 5.7% in May, reflecting lower traffic as consumers remained cautious amid pressure on discretionary spending from inflation, higher energy costs, global conflict and broader economic uncertainty. Comparable sales improved sequentially to a decrease of 2.8% in June and a decrease of 1.9% in July, supported by Father's Day and other promotional activity that helped offset the continued decline in traffic, while consumer confidence remains pressured. We also continue to believe GLP-1 medications and similar weight-loss medications are contributing to structural changes in customer demand within the big and tall category. The comparable sales decrease of 3.5% for the second quarter consisted of a comparable sales decrease of 4.3% from stores and a comparable sales decrease of 1.6% from our direct business. A decrease in traffic continued to be the primary driver, particularly in stores, partially offset by improvements in conversion and dollars per transaction. The direct business performed stronger than stores as we have seen positive results from our paid search, paid social and program marketing efforts. Contributing to this improvement were strong sales of clearance and promotional merchandise on the website. Gross Profit For the second quarter of fiscal 2026, our gross margin rate, inclusive of occupancy costs, was 47.9% as compared to a gross margin rate of 45.2% for the second quarter of fiscal 2025. Our gross margin rate increased by 270 basis points, driven by an increase of 340 basis points in merchandise margin, partially offset by a 70 basis point increase in occupancy costs. The increase in merchandise margin as compared to the second quarter of fiscal 2025 is primarily due to a refund of $4.6 million, or 410 basis points, received in the second quarter of fiscal 2026 for tariffs previously paid. This benefit was partially offset by increased shipping costs as a result of fuel surcharges and increased markdown activity associated with clearance sales. Given the volatility that currently exists around trade discussions, it is difficult to determine the potential impact that continuing tariffs may have on our financial results for fiscal 2026.  However, if currently enacted rates remain in effect throughout fiscal 2026, and no additional tariffs, including those under U.S. trade laws, are added, we estimate that the impact of the current administration’s tariffs on gross margin for fiscal 2026, exclusive of refunds realized, will be approximately 100 basis points. The 70 basis point increase in occupancy costs for the second quarter, as a percent of sales, was primarily due to the deleveraging of sales. On a dollar basis, occupancy costs increased $0.1 million as compared to the second quarter of fiscal 2025. Selling, General & Administrative As a percentage of sales, SG&A (selling, general and administrative) expenses for the second quarter of fiscal 2026 were 41.0% as compared to 41.1% for the second quarter of fiscal 2025. On a dollar basis, SG&A expenses decreased by $1.8 million as compared to the second quarter of fiscal 2025. The decrease was primarily due to a decrease in incentive-based compensation, including the reversal of expense associated with forfeited awards, and favorable healthcare costs. Marketing costs were 6.1% of sales for the second quarter of fiscal 2026 and fiscal 2025. For fiscal 2026, marketing costs are expected to be approximately 5.8% 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 24.9% of sales in the second quarter of fiscal 2026 as compared to 24.1% of sales in the second quarter of fiscal 2025. Corporate Support Costs, which include the distribution center and corporate overhead costs, represented 16.1% of sales in the second quarter of fiscal 2026 as compared to 17.0% of sales in the second quarter of fiscal 2025. Transaction-Related Costs Transaction-related costs for the second quarter of fiscal 2026 and fiscal 2025 were $1.8 million and $0.1 million, respectively, and primarily related to fees paid for professional services in connection with the proposed merger with FullBeauty. Interest Income, Net Net interest income for the second quarter of fiscal 2026 was $0.1 million as compared to $0.2 million for the second quarter of fiscal 2025. For both periods, interest income was earned from investments in U.S. government-backed investments and money market accounts. The decrease in interest income was primarily due to the decrease in the average balance of investments during the second quarter of fiscal 2026 as compared to the prior year period. Interest costs for both periods were minimal because we had no outstanding debt and no borrowings under our credit facility. Income Taxes Our income tax provision 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 second quarter of fiscal 2026, the Company's effective tax rate was (1.6)% as compared to an effective tax rate of 129.3% for the second quarter of fiscal 2025. In the fourth quarter of fiscal 2025, a full valuation allowance was established against the net deferred tax assets. As a result, the effective tax rate for the second quarter of fiscal 2026 primarily reflects a provision for state margin tax, based on gross receipts less certain deductions. The effective tax rate for the second quarter of fiscal 2025 reflected the impact of permanent book-to-tax differences and discrete items. Net Income (Loss) For the second quarter of fiscal 2026, net income was $2.0 million, or $0.04 per diluted share, as compared to a net loss for the second quarter of fiscal 2025 of ($0.3) million, or $0.00 per diluted share. The increase in earnings for the second quarter of fiscal 2026 as compared to the second quarter of fiscal 2025 was driven primarily by the tariff refund and lower incentive-based accruals, partially offset by a decrease in sales and an increase in transaction-related expenses. We have fully reserved against our deferred tax assets and, therefore, the net income in the second quarter of fiscal 2026 does not reflect a normal provision or benefit for income taxes for the Company. On a non-GAAP basis, adjusting for a normal tax rate of 26% and the add back of transaction-related costs, adjusted net income for the second quarter of fiscal 2026 was $0.05 per diluted share as compared to adjusted net income for the second quarter of fiscal 2025 of $0.01 per diluted share. Adjusted EBITDA Adjusted EBITDA, a non-GAAP measure, for the second quarter of fiscal 2026 was $7.7 million, as compared to $4.7 million for the second quarter of fiscal 2025.  Adjusted EBITDA includes the tariff refunds received during the second quarter of fiscal 2026. Cash Flow Cash flow from operations for the first six months of fiscal 2026 was $(2.8) million as compared to $(2.1) million for the first six months of fiscal 2025. The slight decrease in cash flow from operations was primarily due to the decrease in earnings partially offset by the timing of other working capital. Free cash flow, before capital expenditures for store development, a non-GAAP measure, was $(8.3) million for the first six months of fiscal 2026 as compared to $(7.6) million for the first six months of fiscal 2025. Free cash flow, a non-GAAP measure, was $(8.7) million for the first six months of fiscal 2026 as compared to $(14.2) million for the first six months of fiscal 2025. This improvement reflects a decrease in capital expenditures for new store openings of $6.2 million. Non-GAAP Measures Adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted net income (loss) per diluted share, free cash flow before capital expenditures for store development and free cash flow are non-GAAP financial measures. Please see “Non-GAAP Measures” below and reconciliations of these non-GAAP measures to the comparable GAAP measures that follow in the tables below. Balance Sheet & Liquidity As of August 1, 2026, we had cash and investments of $20.1 million as compared to $33.5 million as of August 2, 2025, with no outstanding debt in either period. The decrease in cash and investments at August 1, 2026, as compared to August 2, 2025, is primarily due to the capital spent over the past 12 months of approximately $13.9 million. We did not have any borrowings under our credit facility during either period and, as of August 1, 2026, the availability under our credit facility was $61.7 million, as compared to $70.1 million as of August 2, 2025. Our credit facility does not mature until August 13, 2030. As of August 1, 2026, our inventory decreased $3.4 million to $75.5 million, as compared to $78.9 million as of August 2, 2025. We continue to take proactive measures to manage our inventory and adjust our receipt plan given the ongoing macroeconomic factors affecting consumer spending. At August 1, 2026, our clearance inventory was 9.8% of our total inventory, as compared to 10.2% at August 2, 2025. We believe our inventory position is healthy, and our clearance levels are in line with our benchmark of 10%. Retail Store Information The following is a summary of our retail square footage since the end of fiscal 2023 through the end of the second quarter of fiscal 2026: During the first six months of fiscal 2026, we closed one DXL retail store and one Casual Male XL outlet store. We expect our capital expenditures for fiscal 2026 to range from $8.0 million to $10.0 million, net of tenant incentives, a decrease from our previous estimate of $9.0 million-$12.0 million. We expect our capital spend for fiscal 2026 to primarily be for technology-related projects to support our business initiatives and projects necessary to maintain our existing store portfolio and distribution center. Digital Commerce Information We distribute our national brands and private brand merchandise directly to consumers through our stores, website, app, and third-party marketplaces. 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. Our direct business is a critical component of our business and an area of significant growth opportunity for us. For the second quarter of fiscal 2026, our direct sales were $30.9 million, or 27.8% of sales, as compared to $31.8 million, or 27.5% of sales, in the second quarter of fiscal 2025. As a result of our marketing efforts, including paid search and paid social, we have seen an increase in demand and online conversion. Conference Call The Company will hold a conference call to review its financial results on Wednesday, September 9, 2026 at 9:00 a.m. ET. To participate in the live webcast, please pre-register at: https://register-conf.media-server.com/register/BI8c4f05c8c3264e639204d7543c946a86 Upon registering, you will be emailed a dial-in number, and unique PIN. For listen-only, please join and register at: https://edge.media-server.com/mmc/p/4tu7vgo9. An archived version of the webcast may be accessed by visiting the "Events" section of the Company's investor relations website for up to one year. During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously. Non-GAAP Measures In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains non-GAAP financial measures, including adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted EBITDA, adjusted EBITDA margin, free cash flow before capital expenditures for store development, and free cash flow. The presentation of these non-GAAP measures is not in accordance with GAAP and should not be considered superior to or as a substitute for net income (loss), net income (loss) per diluted share or cash flows from operating activities or any other measure of performance derived in accordance with GAAP. In addition, not all companies calculate non-GAAP financial measures in the same manner and, accordingly, the non-GAAP measures presented in this release may not be comparable to similar measures used by other companies. The Company believes the inclusion of these non-GAAP measures helps investors gain a better understanding of the Company’s performance, especially when comparing such results to previous periods, and that they are useful as an additional means for investors to evaluate the Company's operating results when reviewed in conjunction with the Company's GAAP financial statements. Reconciliations of these non-GAAP measures to their comparable GAAP measures are provided in the tables below. Adjusted net income (loss) and adjusted net income (loss) per diluted share reflect an adjustment assuming a normal tax rate of 26% and the add back of transaction-related costs. We have fully reserved against our deferred tax assets and, therefore, the net income in the second quarter of fiscal 2026 is not reflective of earnings assuming a normal tax position for the Company. Adjusted net income (loss) provides investors with a useful indication of the financial performance of the business, on a comparative basis, assuming a normalized tax rate of 26%. The estimated normal tax rate of 26% includes a blended state income tax rate.  The Company believes that this comparability is useful in comparing the actual results period to period. Adjusted net income (loss) per diluted share is then calculated by dividing the adjusted net income (loss) by the weighted average shares outstanding for the respective period, on a diluted basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization and adding back transaction-related expenses. Adjusted EBITDA margin is calculated as adjusted EBITDA divided by total sales. The Company believes that providing adjusted EBITDA and adjusted EBITDA margin is useful to investors to evaluate the Company’s performance and are key metrics to measure profitability and economic productivity. 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 development. Free cash flow is calculated as cash flow from operating activities, less capital expenditures and excludes the mandatory and discretionary repayment of debt. Free cash flow before capital expenditures for store development is calculated as cash flow from operating activities less capital expenditures other than capital expenditures for store development. Capital expenditures for store development includes capital expenditures for new stores, conversions of Casual Male XL stores to DXL and remodels. Capital expenditures related to store relocations and maintenance are not included in store development. About Destination XL Group, Inc. Destination XL Group, Inc. is the leading retailer of Men’s Big + Tall apparel that provides the Big + Tall man the freedom to choose his own style. Subsidiaries of Destination XL Group, Inc. operate DXL Big + Tall retail and outlet stores and Casual Male XL retail and outlet stores throughout the United States, and an e-commerce website, DXL.COM, and mobile app, which offer a multi-channel solution similar to the DXL store experience with the most extensive selection of online products available anywhere for Big + Tall men. The Company is headquartered in Canton, Massachusetts, and its common stock is listed on the Nasdaq Capital Market under the symbol "DXLG." For more information, please visit the Company's investor relations website: https://investor.dxl.com. Forward-Looking Statements Certain statements and information contained in this press release constitute forward-looking statements under the federal securities laws, including statements regarding our belief that we have established a differentiated leadership position in an underserved market that represents meaningful opportunities for future growth; our belief that we have a strong brand, a loyal customer base and a clear understanding of our customers’ priorities; our belief that the sequential improvement in comparable sales trends in the second quarter are encouraging and shows continued progress on the actions we are taking to strengthen the business; our belief that traffic remained under pressure across stores and digital; our belief that our disciplined operating approach and focus on execution will position us to drive continued performance improvements over the remainder of the year; our belief that our results for the second quarter reflect our continued progress against our strategic priorities; our belief that our customers are responding positively to the adjustments we are making to our merchandise assortment, promotional strategy, and customer experience; our belief that our strategic initiatives will provide us opportunities for future growth and enable us to return to profitability; our belief that FiTMAP remains one of the Company’s most important long-term growth drivers; our belief that early results for FiTMAP technology continue to reinforce its value; our belief that personalized fit solutions can drive both customer satisfaction and profitable growth; our belief that AI-powered search and discovery tools are becoming increasingly important in ecommerce; our belief that the new AI initiatives that were launched will improve product data quality, enrich item-level attributes and strengthen our ability to connect product, pricing and inventory information across AI-enabled platforms; our intention that our AI initiatives will improve discoverability, support future commerce applications and position us to compete effectively as digital shopping journeys become more conversational and agent-driven; our belief that GLP-1 medications and similar weight-loss medications present both near-term challenges and long-term opportunities; our continued belief that GLP-1 medications and similar weight loss medications are contributing to structural changes in customer demand within the big + tall category; our belief, based on our research, that while some customers may pause apparel purchases during periods of rapid size change, we expect many will return once they reach a more stable size profile; our belief that we can strengthen retention, reactivation and lifetime value over time by remaining closely aligned with evolving customer needs; our belief that the comparable sales for May reflected lower traffic as consumers remained cautious amid pressure on discretionary spending from inflation, higher energy costs, global conflict and broader economic uncertainty; our belief that the comparable sales for June and July reflected Father’s Day and other promotional activities that helped offset the continued decline in traffic; our belief that it is difficult to determine the potential impact that tariffs may have on our financial results for fiscal 2026; our expectation that the impact of tariffs on pre-tariff gross margin for fiscal 2026, exclusive of refunds realized, will be approximately 100 basis points; our expectation that for fiscal 2026, marketing costs will be approximately 5.8% of sales; our expectation that capital expenditures for fiscal 2026 will range from $8.0 million to $10.0 million, net of tenant incentives, a decrease from our previous estimate of $9.0 million to $12.0 million; our expectation that capital spend for fiscal 2026 will primarily be for technology-related projects to support our business initiatives and projects necessary to maintain our existing store portfolio and distribution center; our belief that inclusion of the 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; our belief that the comparability of adjusted net income (loss) is useful in comparing the actual results period to period; our expectation that we will be able to continue to take proactive measures to manage our inventory and adjust our receipt plan given the ongoing macroeconomic factors affecting consumer spending; our belief that our inventory position is healthy, and our clearance levels are in line with our benchmark of 10%; and statements regarding the proposed merger with FullBeauty, including the DXL Board's evaluation of the proposed transaction, the factors considered by the DXL Board in changing its recommendation with respect to the issuance proposal, stockholder voting matters, and the potential consummation of the proposed merger and related transactions. The discussion of forward-looking information requires the management of the Company to make certain estimates and assumptions regarding the Company's strategic direction and the effect of such plans on the Company's financial results. The Company's actual results and the implementation of its plans and operations may differ materially from forward-looking statements made by the Company. The Company encourages readers of forward-looking information concerning the Company to refer to its filings with the Securities and Exchange Commission, including without limitation, its Annual Report on Form 10-K filed on March 19, 2026, its Amendment No. 1 to Annual Report on Form 10-K/A filed on May 26, 2026, its Amendment No. 1 to the Preliminary Proxy Statement filed on September 2, 2026, its Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission that set forth certain risks and uncertainties that may have an impact on future results and the direction of the Company, including risks relating to changes in consumer spending in response to economic factors; the impact of inflation with rising costs and high interest rates; the impact of tariffs; the impact of ongoing worldwide conflicts on the global economy; potential labor shortages; and the Company’s ability to grow its market share, predict customer tastes and fashion trends, forecast sales growth trends, and compete successfully in the U.S. men’s big and tall apparel market. Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The Company undertakes no obligation and expressly disclaims any duty to update such statements. Additional Information About the Merger and Where to Find It In connection with the merger with FullBeauty, we filed the Preliminary Proxy Statement with the SEC on September 2, 2026. Investors and security holders are encouraged to read the Preliminary Proxy Statement, as well as any other relevant documents filed with the SEC in connection with the merger or incorporated by reference into the Preliminary Proxy Statement, because such documents contain important information regarding the merger and related matters. Investors and security holders may obtain these documents, and any other documents we have filed with the SEC, free of charge at the SEC’s website, www.sec.gov, or by accessing our website at investor.dxl.com. In addition, documents filed with the SEC by us will be available free of charge by writing to us at 555 Turnpike Street, Canton, Massachusetts 02021, Attention: Corporate Secretary. DXL and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of DXL in connection with the merger. Information about DXL’s directors and executive officers, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in DXL’s Annual Report on Form 10-K/A, which was filed with the SEC on May 26, 2026, including under the headings “Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation,” and “Security Ownership of Management,” and in the Amendment No. 1 to the Preliminary Proxy Statement, which was filed with the SEC on September 2, 2026, including under the headings “The Merger—Interests of DXL’s Directors and Executive Officers in the Merger,” “DXL’s Executive Compensation,” “Executive Officers and Directors Following the Merger” and “Principal Stockholders of DXL.” To the extent holdings of our common stock by our directors and executive officers have changed from the amounts of our common stock held by such persons as reflected therein, such changes have been or will be reflected on Initial Statements of Beneficial Ownership of Securities on Form 3, Statements of Changes in Beneficial Ownership on Form 4 or Annual Statements of Changes in Beneficial Ownership of Securities on Form 5, in each case filed with the SEC, including the Form 4s filed by each of the non-executive directors on August 6, 2025, the Form 4s filed by each of the executive officers on September 3, 2025, the Form 4s filed by each of the non-executive directors on November 5, 2025, the Form 4s filed by each of the non-executive directors on February 4, 2026, the Form 4s filed by each of the executive officers on April 3, 2026, the Form 4s filed by each of the non-executive directors on May 6, 2026, the Form 4s filed by each of the non-executive directors on August 5, 2026 and the Form 4s filed by a non-executive director and executive officer on August 14, 2026. FullBeauty and its chief executive officer may be deemed to be participants in the solicitation of proxies from the stockholders of DXL in connection with the merger. Information about FullBeauty and its chief executive officer can be found in the Form 8-K filed by DXL with the SEC on December 11, 2025 and in the Amendment No. 1 to the Preliminary Proxy Statement filed by DXL with the SEC on September 2, 2026, including under the heading “Executive Officers and Directors Following the Merger.” Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the Preliminary Proxy Statement regarding the merger. Free copies of this document may be obtained as described above. No Offer or Solicitation This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. Investor Relations Contact: [email protected](603) 933-0541 Destination XL Group Media Contact: Aaron Palash / Michael Reilly / Carly KingJoele Frank, Wilkinson Brimmer Katcher(212) 355-4449

This article first appeared on GuruFocus. Release Date: September 09, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Destination XL Group Inc (NASDAQ:DXLG) reported its strongest comparable sales result in three years, with sequential monthly improvement from -5.7% in May to -1.9% in July. Adjusted EBITDA significantly improved to $7.7 million (6.9% of sales) from $4.7 million in the prior year, and adjusted EPS rose to $0.05 from $0.01. The company received a $4.6 million IEEPA tariff refund, which boosted gross margin by 270 basis points to 47.9%. The FitMap program has scanned over 150,000 customers, with scanned customers showing higher spending, stronger conversions, higher AOV, and lower return rates. The company maintains a fortress balance sheet with $20.1 million in cash, no debt, and $61.7 million in excess availability, providing financial flexibility. Private brand penetration is growing, with the ThermoChill product line seeing a 56% year-over-year demand increase. Brand awareness in the core demographic improved from 40% to 49% in seven months, and the Trustpilot sentiment score rose from 1.5 to 4.4. Net sales declined 3.4% year-over-year to $111.6 million, with comparable sales down 3.5%. Store traffic remains the most significant challenge, with store comparable sales down 4.3%. Excluding the tariff refund, merchandise margin would have been approximately 70 basis points worse than last year due to higher markdowns and increased shipping costs. The company is behind pace on new customer acquisitions and reactivation, which was exposed by the quarter's traffic miss. The proposed merger with Full Beauty is no longer recommended by the board due to Full Beauty's deteriorating performance, increased indebtedness, and potential negative equity value. A meaningful portion of the customer base using GLP-1 medications has stopped buying apparel altogether, contributing to the traffic slowdown. The company has paused non-essential cash uses and is deferring technology upgrades until comp trends stabilize. Warning! GuruFocus has detected 4 Warning Signs with DXLG. Is DXLG fairly valued? Test your thesis with our free DCF calculator. Q: Can you clarify how many leases are coming up for renewal over the next 24 months and what percentage might be candidates for closure or consolidation? A: Peter Stratton (CFO): We are focused on making our assets more productive. In markets with multiple stores, we can eliminate a store and drive volume to a nearby sister store to improve return on assets. This year, we are closing three stores. Next year, a few dozen leases are coming up for renewal, but not all will close. We will evaluate them case-by-case over the next six months to determine how many more will close, with the ultimate goal of improving sales per square foot and maximizing returns on our existing portfolio. Q: Can you quantify the impact of pausing non-essential cash investments and specify which areas have been targeted? A: Peter Stratton (CFO): The majority of our capital spend this year is in technology upgrades and our distribution center, with a small amount in stores. We are prioritizing projects that keep us current with software platform releases. However, we are deferring upgrades that are not required until we see more stability in our comp trends. We are avoiding any upgrades that will burn cash unnecessarily until the business stabilizes. Q: What is the status of the proposed merger with Full Beauty, and why has the Board changed its recommendation? A: Lionel Conacher (Interim CEO): On September 2, we filed an updated preliminary proxy statement. Conditions have changed since the merger agreement was signed in December, causing Full Beauty's operating performance, financial results, and balance sheet to deteriorate. The Board determined the merger is no longer in the best interest of DXL and has withdrawn its recommendation, now unanimously recommending stockholders vote against the issuance proposal. Factors include the challenging consumer environment, FDB's declining performance, heightened risk of missing projections, increased indebtedness, and substantial economic dilution to our stockholders. Q: What are the key drivers behind the improvement in comparable sales, and what is the outlook for traffic? A: Peter Stratton (CFO): Q2 comparable sales were down 3.5%, the strongest result in three years, with monthly comps improving sequentially from negative 5.7% in May to negative 1.9% in July. Store traffic remains our biggest challenge, but strong conversion and dollars per transaction are offsetting some pressure. In the direct business, we saw improved conversion from app and site enhancements. Customer surveys indicate the slowdown reflects weight loss journeys, shifting spending priorities, and delayed purchases, but we believe affinity for DXL remains strong. Q: How is DXL addressing the impact of GLP-1 medication adoption on customer behavior? A: Jimmy Olsson (Chief Growth Officer): A meaningful portion of our customer base is using GLP-1 medications and stops buying apparel during their weight loss journey. However, a majority intend to return to DXL once they reach a stable size. We are building a specific communication journey tied to FitMap scan segments to stay with these customers through their transition, reinforcing our position as the authority on fit. Q: What is the "Fit for Growth" strategy, and what are its four pillars? A: Jimmy Olsson (Chief Growth Officer): The strategy consists of four pillars: supercharging our fit authority, fueling growth in private brands, building brand awareness and go-to-market strategy, and driving new customer acquisitions. FitMap is central to the first pillar, with over 150,000 customers scanned, showing higher spending, stronger conversions, and lower return rates. Private brands like ThermoChill are growing, with demand up 56% year-over-year. We are reallocating marketing spend toward upper-funnel tactics, and awareness in our core demographic has improved from 40% to 49% in seven months. Q: How is the company balancing promotional activity to protect margins while driving demand? A: Peter Stratton (CFO): We are rebalancing the promotional calendar toward higher-margin and higher-inventory-risk categories to drive demand while protecting profitability. Targeted product-specific promotions are outperforming broad discounting, which is protecting merchandise margin even in a softer traffic environment. Excluding the one-time tariff refund, merchandise margin was approximately 70 basis points worse than last year due to higher markdowns on seasonal products and increased shipping costs. Q: What is the financial impact of the IEEPA tariff refund received in Q2? A: Peter Stratton (CFO): We received a refund of $4.6 million from US Customs and Border Protection during the second quarter, which benefited merchandise margin and improved adjusted EBITDA versus plan. Gross margin, inclusive of occupancy costs, was 47.9%, up 270 basis points year-over-year, primarily driven by this refund. Q: What are the company's priorities for improving profitability and return on assets? A: Lionel Conacher (Interim CEO): Our priorities are increasing traffic and revenue, strengthening customer engagement, improving profitability, and advancing strategic initiatives for long-term growth. We are rationalizing the store base over the next several years as leases expire, targeting stores with a high probability of transferring volume to other locations. This multiyear project is expected to reduce occupancy and store operating costs beginning in 2027, improving sales per square foot and four-wall profit over time. Q: How is DXL leveraging AI and technology to improve customer acquisition and brand sentiment? A: Jimmy Olsson (Chief Growth Officer): Through focused efforts on generative and answer engine optimization, we have moved our Trustpilot sentiment score from 1.5 to 4.4. This is a concrete proof point that our investment behind Agentic and AI-initiated search is paying off. We are also enhancing the app and site experience to support better conversion, and we are testing mid and upper-funnel marketing tactics in select markets to get in front of customers where they consume media. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes the sequential improvement in comparable sales to enhanced digital conversion and the successful scaling of private brand franchises like THERMACHILL. The company is navigating a structural shift in customer behavior driven by GLP-1 medication adoption, which has led to temporary pauses in apparel purchasing during weight loss journeys. Performance was significantly bolstered by a $4.6 million IEEPA tariff refund, which masked a 70 basis point decline in underlying merchandise margins caused by higher markdowns and shipping surcharges. Strategic focus has shifted toward 'Fit Authority' through the FITMAP initiative, which has scanned 150,000 customers and resulted in higher average order values and lower return rates. Management identified store traffic as the primary headwind, noting that while conversion remains strong, overall foot traffic is pressured by shifting consumer spending priorities. The newly created Chief Growth Officer role aims to integrate marketing, merchandising, and store experience to address the lag in new customer acquisition and reactivation. The 'Fit for Growth' strategy will reallocate existing advertising budgets from bottom-of-funnel conversion toward mid- and upper-funnel tactics like YouTube and programmatic channels to improve brand awareness. A multi-year store rationalization program is already underway with store closures occurring this year, though the impact on occupancy and store operating costs is expected to be more significant beginning in 2027., targeting high-occupancy locations in multi-store markets to improve sales per square foot and return on assets. Management has paused all non-essential capital expenditures, prioritizing only critical technology upgrades and distribution center maintenance to preserve liquidity until sales trends stabilize. Future marketing will utilize FITMAP data to create specific communication journeys for customers transitioning through weight loss, aiming to recapture them once they reach a stable size. The company expects to leverage AI and answer engine optimization to maintain recent gains in sentiment scores and improve discoverability without significant infrastructure spend. The Board has unanimously recommended that stockholders vote against the FullBeauty (FBB) merger, citing FBB's deteriorating financial results, increased debt, and potential equity dilution. A $4.6 million one-time tariff refund provided a 270 basis point benefit to gross margin, which management noted is not a recurring operational improvement. Inventory levels are being managed to a strict 10% clearance target to protect margins despite the softer traffic environment. Management flagged significant risks regarding FBB's ability to achieve its current fiscal year projections, influencing the decision to withdraw the merger recommendation. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management plans to close 3 stores this year and will evaluate a few dozen leases coming due next year on a case-by-case basis. The primary objective is to consolidate stores in markets with multiple locations to drive volume to 'sister stores' and improve total asset productivity. Capital spending is currently restricted to essential technology upgrades where vendors are moving platforms to 'end of life'. Management is deferring non-mandatory software releases and non-essential distribution center projects to maintain the 'fortress balance sheet' until comparable sales stabilize.

West Palm Beach, FL, Aug. 24, 2026 (GLOBE NEWSWIRE) -- Zodiac Partners II, LLC ("Zodiac Partners" or "Zodiac") today announced the final results of its previously announced all-cash tender offer to acquire all outstanding shares of Destination XL Group, Inc. ("DXLG" or "DXL"), which expired at 5:00 PM, Eastern Time, on August 21, 2026. As of the expiration, approximately 23% of DXL's outstanding shares (12,450,814) had been validly tendered and not withdrawn - the culmination of a stockholder response that continued to grow daily and strengthen throughout the offer. In accordance with its terms, the offer expired without the purchase of any shares. Zodiac elected to allow the offer to expire in order to concentrate its full efforts and resources on maximizing value to DXL shareholders. "Nearly a quarter of DXL shares came to us, but due to the onerous terms of the FBB Merger Agreement, we feel DXL cannot do what is in the best interest of shareholders" said Ziggy Gokea, Managing Member of Zodiac Partners II, LLC. Zodiac remains confident that, if granted appropriate access, it can negotiate and execute a definitive agreement within 45 days, and it is prepared to engage immediately. Forward-Looking Statements This communication contains forward-looking statements. Statements that are not historical facts, including statements about beliefs, expectations, targets, goals, intentions to acquire securities, intentions to oppose or seek termination of the FBB merger, and plans to engage with stockholders, are forward-looking statements. These statements are based on plans, estimates, expectations and/or goals at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as "may," "will," "should," "expect," "opportunity," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential," "target," "goal," or "continue," or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties, and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Such factors include but are not limited to: whether the FBB merger is completed, abandoned or terminated; whether DXL's Board takes action consistent with its recommendation against the FBB merger; the outcome of any vote of DXL stockholders; Zodiac's ability to acquire additional Shares on acceptable terms; uncertainties as to whether DXL will engage with Zodiac; and the ultimate outcome of any possible transaction between Zodiac and DXL, including the possibility that the parties will not agree to pursue a transaction or that the terms of any definitive agreement will be materially different from those previously proposed. Zodiac cautions that forward-looking statements should not be relied on as predictions of future events, and these statements are not guarantees of performance or results. Forward-looking statements herein speak only as of the date each statement is made. Zodiac does not assume any obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law. Important Additional Information and Where to Find It This communication is for informational purposes only and does not constitute a recommendation, an offer to purchase or a solicitation of an offer to sell DXL securities, nor a solicitation of any proxy, vote, consent or authorization. The tender offer described herein has expired in accordance with its terms and is no longer open. Zodiac Partners II, LLC (the "Purchaser") intends to file a final amendment to its Tender Offer Statement on Schedule TO with the Securities and Exchange Commission (the "SEC") reporting the results of the offer, and intends to make such other filings, including amendments to its Schedule 13D and any soliciting materials, as may be required in connection with its ongoing efforts. Investors and security holders are urged to carefully read all such materials when available, as they contain important information. These materials are filed with the SEC, and investors and security holders may obtain a free copy of these materials and other documents filed by the Purchaser and DXL with the SEC at the website maintained by the SEC at www.sec.gov. In addition, documents that the Purchaser files with the SEC will be made available to all investors and security holders of DXL free of charge from the information agent: Investor Contacts‍ Saratoga Proxy Consulting LLC520 8th Avenue 14th FloorNew York, NY 10018toll-free telephone: +1 (212) [email protected]

West Palm Beach FL, June 23, 2026 (GLOBE NEWSWIRE) -- Zodiac Partners II, LLC (“Zodiac Partners” or “Zodiac”) today announced the results to date of its previously announced all-cash tender offer to acquire all outstanding shares of Destination XL Group, Inc. (“DXLG” or “DXL”), and announced that it has increased its offer price to $0.84 per share, committed additional equity to the offer, and has extended the expiration date. The offer, which had been scheduled to expire at 5:00 PM, Eastern Time, on June 22, 2026, has been extended to 5:00 PM, Eastern Time, on July 24, 2026. As of the prior expiration of the offer, more than 16% of DXL’s outstanding shares had been validly tendered and not withdrawn (approximately 8,978,000 shares). Zodiac Partners has been overwhelmed by the strength of this stockholder response and, in light of it, has elected to improve and extend the offer. “We are pleased by the response from DXL’s stockholders, and by raising our price and committing additional capital we are demonstrating just how serious we are about completing this transaction,” said Ziggy Gokea, Managing Member of Zodiac Partners II, LLC. “This offer was designed to show the Board the flawed nature of the Full Beauty Brands (“FBB”) merger and to give stockholders a better path forward. The strength of the support we have received to date is a clear signal that stockholders want a choice.” Commits More Equity and Raises PriceZodiac Partners has increased its offer price to $0.84 per share in cash and has increased its committed equity financing for the transaction. The improved offer represents a ~27% premium to the most recent share price and reflects Zodiac’s improved conviction in the transaction following such a strong shareholder turn out. Consistent with the terms of the offer, the increased price would be paid to all stockholders whose shares are accepted for payment in the offer, including stockholders who have already tendered. Zodiac believes the shareholder support and improved terms leave the DXL Board with no sound basis to continue refusing to engage. A Choice for StockholdersZodiac Partners expects the Board will recognize the clear signal that its stockholders have sent. Having itself concluded that the Full Beauty Brands merger is not in the best interest of stockholders, the Board should stop expending stockholder resources pursuing that transaction. In Zodiac's view, the Board must recognize that the FBB merger cannot be saved and that any deal with FBB, even if modified, is not a path to value. A highly levered, all-stock transaction in a further weakening macro environment would leave stockholders worse off. Given this, Zodiac urges the Board to give its stockholders a voice and to engage with Zodiac’s competing, all-cash offer. Zodiac remains confident that it can execute a definitive agreement within 45 days of being granted appropriate access, and stands ready to engage with the Board immediately. The Risk of the FBB PathZodiac cautions that continuing to pursue the FBB merger could leave DXL in a precarious position within a matter of weeks. By August 11th, 2026, DXL could be left with no CEO, no transaction partner, and a diminished cash position after the resources spent on a transaction the Board has now repudiated. Zodiac believes such an outcome risks leaving the business effectively orphaned and could place further pressure on the share price, which is down another 28% year to date. TermsThe offer is now scheduled to expire at 5:00 PM, Eastern Time (ET), at the end of July 24th, 2026, unless the offer is extended. The full terms, conditions and other details of the tender offer are set forth in the amended offering documents that the Purchaser is filing promptly with the Securities and Exchange Commission (the “SEC”). Wyrick Robbins Yates & Ponton LLP is acting as legal counsel to Zodiac Partners II, LLC. In addition, the Purchaser reiterates that it intends to pursue all options to complete a transaction, including potentially nominating directors for election at DXL’s Annual Meeting. Forward-Looking StatementsThis communication contains forward-looking statements. Statements that are not historical facts, including statements about beliefs, expectations, targets, goals, regulatory approval timing and nominating directors are forward-looking statements. These statements are based on plans, estimates, expectations and/or goals at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Such factors include but are not limited to: the ultimate outcome of any possible transaction between the Purchaser and DXL, including the possibility that the parties will not agree to pursue a business combination transaction or that the terms of any definitive agreement will be materially different from those proposed; uncertainties as to whether DXL will cooperate with the Purchaser regarding the proposed transaction; the Purchaser’s ability to consummate the proposed transaction with DXL; the conditions to the completion of the proposed transaction, including the receipt of any required stockholder approvals and any required regulatory approvals; and the Purchaser’s ability to finance the proposed transaction. The Purchaser intends, promptly following consummation of the Offer, to effect a second-step merger under Section 251(h) of the Delaware General Corporation Law in which all Shares not tendered (other than Shares as to which appraisal rights are properly exercised) will be converted into the right to receive the same consideration per Share paid in the Offer, so that non-tendering stockholders receive the identical consideration The Purchaser cautions that forward-looking statements should not be relied on as predictions of future events, and these statements are not guarantees of performance or results. Forward-looking statements herein speak only as of the date each statement is made. The Purchaser does not assume any obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law. Important Additional Information and Where to Find ItThis communication is for informational purposes only and does not constitute a recommendation, an offer to purchase or a solicitation of an offer to sell DXL securities. Zodiac Partners II, LLC (the “Purchaser”) intends to file an Amended Tender Offer Statement on Schedule TO/A with the SEC on the date hereof, and DXL will file a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer with the SEC. Investors and security holders are urged to carefully read the Tender Offer Statement (including the Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as each may be amended or supplemented from time to time), and the Solicitation/Recommendation Statement when available, as these materials contain important information that investors and security holders should consider before making any decision regarding tendering their common stock, including the terms and conditions of the tender offer. The Tender Offer Statement, Offer to Purchase, Solicitation/Recommendation Statement and related materials are filed with the SEC, and investors and security holders may obtain a free copy of these materials and other documents filed by the Purchaser and DXL with the SEC at the website maintained by the SEC at www.sec.gov. In addition, the Tender Offer Statement and other documents that the Purchaser file with the SEC will be made available to all investors and security holders of DXL free of charge from the information agent for the tender offer: Investor Contacts‍ Saratoga Proxy Consulting LLC520 8th Avenue 14th Floor New York, NY 10018toll-free telephone: +1 (212) [email protected]

Sales of $103.3 million, Net Loss of $(0.11) per diluted share, Adjusted Net Loss of $(0.06) per diluted share CANTON, Mass., June 03, 2026 (GLOBE NEWSWIRE) -- Destination XL Group, Inc. (NASDAQ: DXLG), the leading integrated-commerce specialty retailer of Big + Tall men’s clothing and footwear, today reported operating results for the first quarter of fiscal 2026. First Quarter Financial Highlights Total sales for the first quarter were $103.3 million, down 2.1% from $105.5 million in the first quarter of fiscal 2025. Comparable sales for the first quarter of fiscal 2026 decreased 3.8% as compared to the first quarter of fiscal 2025. Net loss for the first quarter was $(5.9) million, or $(0.11) per diluted share, as compared to a net loss of $(1.9) million, or $(0.04) per diluted share, for the first quarter of fiscal 2025. Adjusted net loss (a non-GAAP measure) for the first quarter was $(0.06) per diluted share as compared to an adjusted net loss of $(0.04) per diluted share for the first quarter of fiscal 2025. Adjusted EBITDA (a non-GAAP measure) for the first quarter was $(0.7) million as compared to $0.2 million for the first quarter of fiscal 2025. Total cash and investments were $16.2 million at May 2, 2026, as compared to $29.1 million at May 3, 2025, with no outstanding debt for either period. Management’s Comments “We are encouraged by our first quarter results, which reflect an improving sales performance and continued progress toward our strategic priorities. While comparable sales declined 3.8%, we saw positive momentum in key areas of the business, including higher conversion rates and increased average order value across both stores and online. We believe these trends reinforce that the adjustments we are making to our merchandise assortment, promotional strategy, and customer experience are aligning better with today’s value-conscious consumer. We will continue to navigate the challenging environment, building on the strength of our offering and assortment and the trust our customers place in the DXL brand,” said Harvey Kanter, President and Chief Executive Officer. Strategic Priorities: We continue to advance several strategic initiatives designed to strengthen our market leadership in the big + tall sector while enhancing the customer experience across channels. FiTMAP® We have exclusive rights to our fit technology platform until 2030. FiTMAP® remains one of the Company’s most important long-term growth drivers. During the quarter, we completed the rollout of FiTMAP technology in 188 stores to enhance the customer journey. Since launch, over 100,000 customers have engaged with the platform, and early results continue to reinforce its value. Customers who use FiTMAP have demonstrated stronger conversion, higher average order values, greater purchase frequency and lower return rates, underscoring the role personalized fit can play in driving both customer satisfaction and profitable growth. Leverage AI We are sharpening our focus on artificial intelligence (“AI”) as consumer shopping behavior evolves. As AI-powered search and discovery tools become increasingly important in ecommerce, the Company is investing to ensure that its products and content are more visible, relevant and accessible in these emerging environments. During the quarter, DXL launched new AI initiatives to improve product data quality, enrich item-level attributes and strengthen its ability to connect product, pricing and inventory information across AI-enabled platforms. These efforts are intended to improve discoverability, support future commerce applications and position the Company to compete effectively as digital shopping journeys become more conversational and agent-driven. GLP-1 Medications and Similar Weight-Loss Medications We continue to deepen our understanding of how the use of glucagon-like peptide-1 (“GLP-1”) medications and similar weight-loss medications may be influencing customer behavior and category demand. Our research indicates that a meaningful portion of our customer base is currently using GLP-1 medications, contributing to more dynamic sizing needs over time. We are responding thoughtfully by broadening select assortments in smaller sizes and using customer insights to inform future merchandising, marketing and re-engagement strategies. Importantly, the Company sees this as both a near-term challenge and a long-term opportunity: while some customers may pause apparel purchases during periods of rapid size change, many express an intention to return once they reach a more stable size profile. By staying closely aligned with these evolving customer needs, we believe we can strengthen retention, reactivation and lifetime value over time. Merger with FullBeauty Brands In a separate press release issued today, the Company provided an update on the pending merger with FullBeauty Brands. To access the press release, please visit https://investor.dxl.com. First Quarter Results Sales Total sales for the first quarter of fiscal 2026 were $103.3 million, as compared to $105.5 million for the first quarter of fiscal 2025. The decrease in total sales was primarily attributable to a decrease in comparable sales for the first quarter of 3.8%, partially offset by an increase in non-comparable store sales. Sales improved at the start of fiscal 2026 with comparable sales down 1.3% in February and down 2.7% in March and, in April, sales were down 6.8%. While the performance between March and April was impacted at some level by the earlier Easter holiday, we believe the slowdown in sales in April was primarily the result of a combination of macroeconomic pressures impacting consumer confidence and discretionary spending, including global conflict, rising fuel costs, and inflation. We also believe the impact of GLP-1 medications and similar weight-loss medications are contributing to structural changes in customer demand within the big + tall category. The comparable sales decrease of 3.8% for the first quarter consisted of a comparable sales decrease of 4.6% from stores and a comparable sales decrease of 1.6% from our direct business. A decrease in traffic continued to be the primary driver, particularly in stores, partially offset by improvements in conversion and dollars per transaction. The direct business showed improvement during the first quarter, with increased demand being generated from our paid search, paid social and program marketing efforts. In addition, improvements to the website and app have helped to improve conversion during the first quarter of fiscal 2026. Contributing to this improvement were strong sales of clearance merchandise on the website. Gross Margin For the first quarter of fiscal 2026, our gross margin rate, inclusive of occupancy costs, was 44.3% as compared to a gross margin rate of 45.1% for the first quarter of fiscal 2025. Our gross margin rate decreased by 80 basis points, driven by a decrease of 100 basis points in merchandise margin, partially offset by a 20-basis point decrease in occupancy costs. The decrease in merchandise margin as compared to the first quarter of fiscal 2025 is primarily due to the impact of tariffs, increased shipping costs as a result of fuel surcharges, and increased markdown activity associated with clearance sales. These increased costs were partially offset by an improvement in merchandise margins as a result of a shift in product mix toward our private brand merchandise and favorable loyalty costs. The decrease in occupancy costs of 20 basis points, or $0.5 million, was primarily due to $1.4 million received from a landlord as a result of an early lease termination, partially offset by increased rents from lease extensions and new stores. Tariffs In April 2026, U.S. Customs and Border Protection ("CBP") launched an online portal through which companies may submit refund requests. During the first quarter of fiscal 2026, the Company submitted a claim seeking a refund of approximately $4.0 million related to tariffs previously paid. The timing and amount of any potential refund and recovery remain uncertain, and the Company expects to recognize any recovery when receipt is considered realizable. Given the volatility that currently exists around trade discussions, it is difficult to determine the potential impact that tariffs may have on our financial results for fiscal 2026. However, if currently enacted rates remain in effect throughout fiscal 2026, and no additional tariffs, including those under U.S. trade laws, are added, we estimate that the impact of tariffs on pre-tariff gross margin for fiscal 2026, exclusive of any refunds realized, will be approximately 100 basis points, a decrease from the previous estimate of 150 basis points. Selling, General & Administrative As a percentage of sales, SG&A (selling, general and administrative) expenses for the first quarter of fiscal 2026 were 45.0% as compared to 44.9% for the first quarter of fiscal 2025. On a dollar basis, SG&A expenses decreased by $0.9 million as compared to the first quarter of fiscal 2025. The decrease was primarily due to a decrease in supporting payroll costs and incentive-based compensation partially offset by an increase in marketing costs. Marketing costs were 6.5% of sales for the first quarter of fiscal 2026 as compared to 6.1% of sales for the first quarter of fiscal 2025. For fiscal 2026, marketing costs are expected to be approximately 5.8% 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 26.1% of sales in the first quarter of fiscal 2026 as compared to 25.2% of sales in the first quarter of fiscal 2025. Corporate Support Costs, which include the distribution center and corporate overhead costs, represented 18.9% of sales in the first quarter of fiscal 2026 as compared to 19.8% of sales in the first quarter of fiscal 2025. Transaction-Related Costs Transaction-related costs for the first quarter of fiscal 2026 and fiscal 2025 were $1.2 million and $0.1 million, respectively, and primarily related to fees paid for professional services in connection with costs related to the merger with FullBeauty Brands. Interest Income, Net Net interest income for the first quarter of fiscal 2026 was $0.1 million as compared to $0.3 million for the first quarter of fiscal 2025. For both periods, interest income was earned from investments in U.S. government-backed investments and money market accounts. The decrease in interest income was primarily due to the decrease in the average balance of investments during the first three months of fiscal 2026 as compared to the prior year period. Interest costs for both periods were minimal because we had no outstanding debt and no borrowings under our credit facility. Income Taxes Our income tax provision 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 2026, the Company's effective tax rate was (1.1)% as compared to an effective tax rate of 39.7% for the first quarter of fiscal 2025. In the fourth quarter of fiscal 2025, a full valuation allowance was established against the net deferred tax assets. As a result, the effective tax rate for the first quarter of fiscal 2026 primarily reflects a provision for state margin tax, based on gross receipts less certain deductions. The effective tax rate for the first quarter of fiscal 2025 reflected the impact of permanent book-to-tax differences. Net Loss For the first quarter of fiscal 2026, net loss was $5.9 million, or $(0.11) per diluted share, as compared to a net loss for the first quarter of fiscal 2025 of $1.9 million, or $(0.04) per diluted share. The decrease in earnings for the first quarter of fiscal 2026 as compared to first quarter of fiscal 2025 was driven primarily by a decrease in sales, an increase in transaction-related expenses and a decrease in the effective tax rate. We have fully reserved against our deferred tax assets and, therefore, the net loss in the first quarter of fiscal 2026 does not reflect a normal provision or benefit for income taxes for the Company. On a non-GAAP basis, adjusting for a normal tax rate of 26% and the add back of transaction-related costs, adjusted net loss for the first quarter of fiscal 2026 was $(0.06) per diluted shares as compared to adjusted net loss for the first quarter of fiscal 2025 of $(0.04) per diluted share. Adjusted EBITDA Adjusted EBITDA, a non-GAAP measure, for the first quarter of fiscal 2026 was $(0.7) million, as compared to $0.2 million for the first quarter of fiscal 2025. Cash Flow Cash flow from operations for the first three months of fiscal 2026 was $(8.8) million as compared to $(12.0) million for the first three months of fiscal 2025. The improvement in cash flow from operations was primarily due to the timing of other working capital partially offset by a decrease in earnings. Free cash flow, before capital expenditures for store development, a non-GAAP measure, was $(12.3) million for the first three months of fiscal 2026 as compared to $(14.5) million for the first three months of fiscal 2025. Free cash flow, a non-GAAP measure, was $(12.7) million for the first three months of fiscal 2026 as compared to $(18.8) million for the first three months of fiscal 2025. Non-GAAP Measures Adjusted EBITDA, adjusted EBITDA margin, adjusted net loss, adjusted net loss per share, free cash flow before capital expenditures for store development and free cash flow are non-GAAP financial measures. Please see “Non-GAAP Measures” below and reconciliations of these non-GAAP measures to the comparable GAAP measures that follow in the tables below. Balance Sheet & Liquidity As of May 2, 2026, we had cash and investments of $16.2 million as compared to $29.1 million as of May 3, 2025, with no outstanding debt in either period. The decrease in cash and investments at May 2, 2026 as compared to May 3, 2025 is primarily due to the capital spent over the past 12 months of approximately $17.2 million. We did not have any borrowings under our credit facility during either period and, as of May 2, 2026, the availability under our credit facility was $70.0 million, as compared to $77.1 million as of May 3, 2025. Availability under our credit facility is primarily driven by our available inventory. As of May 2, 2026, our inventory decreased $4.1 million to $81.4 million, as compared to $85.5 million as of May 3, 2025. We continue to take proactive measures to manage our inventory and adjust our receipt plan given the ongoing macroeconomic factors affecting consumer spending. At the same time, we may accelerate certain receipts to avoid potential delays caused by the recent conflict with Iran. At May 2, 2026, our clearance inventory was 9.9% of our total inventory, as compared to 9.5% at May 3, 2025. Our inventory position is healthy, and our clearance levels are in line with our benchmark of 10%. Our inventory turnover rate has improved by over 30% from fiscal 2019. Retail Store Information The following is a summary of our retail square footage since the end of fiscal 2023 through the end of the first quarter of fiscal 2026: During the first three months of fiscal 2026, we closed one DXL retail store and one Casual Male XL outlet store. We expect our capital expenditures for fiscal 2026 to range from $8.0 million to $12.0 million, net of tenant incentives. Our store development plans for fiscal 2026 will be limited to conversions of a few remaining Casual Male XL stores to the DXL format, store relocations and other capital projects necessary to maintain our existing store portfolio and distribution center. The remainder of our expected capital spend for fiscal 2026 will primarily be for technology-related projects to support our business initiatives. Digital Commerce Information We distribute our national brands and private brand merchandise directly to consumers through our stores, website, app, and third-party marketplaces. 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. Our direct business is a critical component of our business and an area of significant growth opportunity for us. For the first quarter of fiscal 2026, our direct sales were $28.7 million, or 27.7% of sales, as compared to $29.1 million, or 27.5% of sales, in the first quarter of fiscal 2025. As a result of our marketing efforts, including paid search and paid social, we have seen an increase in demand and online conversion. Conference Call The Company will hold a conference call to review its financial results on Wednesday, June 3, 2026 at 9:00 a.m. ET. An investor presentation with additional details on the transaction can be found at https://investor.dxl.com. To participate in the live webcast, please pre-register at: https://register-conf.media-server.com/register/BI5ae665897d864e8da0f0d4edcae59a76 Upon registering, you will be emailed a dial-in number, and unique PIN. For listen-only, please join and register at: https://edge.media-server.com/mmc/p/m5iyuyet. An archived version of the webcast may be accessed by visiting the "Events" section of the Company's investor relations website for up to one year. During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously. Non-GAAP Measures In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains non-GAAP financial measures, including adjusted net loss, adjusted net loss per diluted share, adjusted EBITDA, adjusted EBITDA margin, free cash flow before capital expenditures for store development, and free cash flow. The presentation of these non-GAAP measures is not in accordance with GAAP and should not be considered superior to or as a substitute for net loss, net loss per diluted share or cash flows from operating activities or any other measure of performance derived in accordance with GAAP. In addition, not all companies calculate non-GAAP financial measures in the same manner and, accordingly, the non-GAAP measures presented in this release may not be comparable to similar measures used by other companies. The Company believes the inclusion of these non-GAAP measures help investors gain a better understanding of the Company’s performance, especially when comparing such results to previous periods, and that they are useful as an additional means for investors to evaluate the Company's operating results when reviewed in conjunction with the Company's GAAP financial statements. Reconciliations of these non-GAAP measures to their comparable GAAP measures are provided in the tables below. Adjusted net loss and adjusted net loss per diluted share reflect an adjustment assuming a normal tax rate of 26% and the add back of transaction-related costs. We have fully reserved against our deferred tax assets and, therefore, the net loss in the first quarter of fiscal 2026 is not reflective of earnings assuming a normal tax position for the Company. Adjusted net loss provides investors with a useful indication of the financial performance of the business, on a comparative basis, assuming a normalized tax rate of 26%. The estimated normal tax rate of 26% includes a blended state income tax rate. The Company believes that this comparability is useful in comparing the actual results period to period. Adjusted net loss per diluted share is then calculated by dividing the adjusted net loss by the weighted average shares outstanding for the respective period, on a diluted basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization and adding back transaction-related expenses. Adjusted EBITDA margin is calculated as adjusted EBITDA divided by total sales. The Company believes that providing adjusted EBITDA and adjusted EBITDA margin is useful to investors to evaluate the Company’s performance and are key metrics to measure profitability and economic productivity. 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 development. Free cash flow is calculated as cash flow from operating activities, less capital expenditures and excludes the mandatory and discretionary repayment of debt. Free cash flow before capital expenditures for store development is calculated as cash flow from operating activities less capital expenditures other than capital expenditures for store development. Capital expenditures for store development includes capital expenditures for new stores, conversions of Casual Male XL stores to DXL and remodels. Capital expenditures related to store relocations and maintenance are not included in store development. About Destination XL Group, Inc. Destination XL Group, Inc. is the leading retailer of Men’s Big + Tall apparel that provides the Big + Tall man the freedom to choose his own style. Subsidiaries of Destination XL Group, Inc. operate DXL Big + Tall retail and outlet stores and Casual Male XL retail and outlet stores throughout the United States, and an e-commerce website, DXL.COM, and mobile app, which offer a multi-channel solution similar to the DXL store experience with the most extensive selection of online products available anywhere for Big + Tall men. The Company is headquartered in Canton, Massachusetts, and its common stock is listed on the Nasdaq Global Market under the symbol "DXLG." For more information, please visit the Company's investor relations website: https://investor.dxl.com. Forward-Looking Statements Certain statements and information contained in this press release constitute forward-looking statements under the federal securities laws, including statements regarding our belief that first quarter results reflect an improving performance and continued progress toward our strategic priorities; our belief that the higher conversion rates and increased average order value across both stores and online reinforce that the adjustments we are making to our merchandise assortment, promotional strategy, and customer experience are aligning better with today’s value-conscious consumer; our belief that AI-powered search and discovery tools are becoming increasingly important in ecommerce; our belief that the new AI initiatives that were launched will improve product data quality, enrich item-level attributes and strengthen our ability to connect product, pricing and inventory information across AI-enabled platforms; our intention that our AI initiatives will improve discoverability, support future commerce applications and position us to compete effectively as digital shopping journeys become more conversational and agent-driven; our belief that GLP-1 medications provide both a near-term challenge and a long-term opportunity: our belief that the impact of GLP-1 medications and similar weight loss medications are contributing to structural changes in customer demand within the big + tall category; our belief based on our research that while some customers may pause apparel purchases during periods of rapid size change, we expect them to return once they reach a more stable size profile; our belief that we can strengthen retention, reactivation and lifetime value over time by staying closely aligned with evolving customer needs; our belief that the slowdown in April reflects a combination of macroeconomic pressures impacting consumer confidence and discretionary spending, including global conflict, rising fuel costs, and inflation; our expectation that the impact of tariffs on gross margin, exclusive of any refunds realized, will be approximately 100 basis points, a decrease from the previous estimate of 150 basis points; our expectation that for fiscal 2026, marketing costs will be approximately 5.8% of sales; our expectation that capital expenditures for fiscal 2026 will range from $8.0 million to $12.0 million, net of tenant incentives; our belief that store development plans for fiscal 2026 will be limited to conversions of a few remaining Casual Male XL stores to the DXL format, store relocations and other capital projects will be necessary to maintain our existing store portfolio and distribution center; our expectation that the remainder of our capital spend for fiscal 2026 will primarily be for technology-related projects to support our business initiatives; our belief that inclusion of the 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; our belief that the comparability of adjusted net loss is useful in comparing the actual results period to period; and our expectation that we will be able to take proactive measures to manage our inventory and adjust our receipt plan given the ongoing macroeconomic factors affecting consumer spending, while at the same time, accelerating certain receipts to avoid potential delays caused by the recent conflict with Iran. The discussion of forward-looking information requires the management of the Company to make certain estimates and assumptions regarding the Company's strategic direction and the effect of such plans on the Company's financial results. The Company's actual results and the implementation of its plans and operations may differ materially from forward-looking statements made by the Company. The Company encourages readers of forward-looking information concerning the Company to refer to its filings with the Securities and Exchange Commission, including without limitation, its Annual Report on Form 10-K filed on March 19, 2026, its Amendment No. 1 to Annual Report on Form 10-K/A filed on May 26, 2026, its Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission that set forth certain risks and uncertainties that may have an impact on future results and the direction of the Company, including risks relating to changes in consumer spending in response to economic factors; the impact of inflation with rising costs and high interest rates; the impact of tariffs; the impact of ongoing worldwide conflicts on the global economy; potential labor shortages; and the Company’s ability to grow its market share, predict customer tastes and fashion trends, forecast sales growth trends, and compete successfully in the U.S. men’s big and tall apparel market. Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The Company undertakes no obligation and expressly disclaims any duty to update such statements. Additional Information About the Merger and Where to Find ItIn connection with the merger with FullBeauty Brands, we intend to file a proxy statement (the “Proxy Statement”), which will be distributed to our stockholders in connection with their votes on the issuance of our common stock in the merger. Investors and security holders are encouraged to read the Proxy Statement when it becomes available (and any other documents filed with the SEC in connection with the merger or incorporated by reference into the Proxy Statement) because such documents will contain important information regarding the merger and related matters. Investors and security holders will be able to obtain these documents, and any other documents we have filed with the SEC, free of charge at the SEC’s website, www.sec.gov, or by accessing our website at investor.dxl.com. In addition, documents filed with the SEC by us will be available free of charge by writing to us at 555 Turnpike Street, Canton, Massachusetts 02021, Attention: Corporate Secretary. Participants in the SolicitationWe and certain of our directors and executive officers may be deemed to be participants in the solicitation of proxies from our stockholders in connection with the merger with FullBeauty Brands. Information about our directors and executive officers, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in our proxy statement for our Form 10-K/A, which was filed with the SEC on May 26, 2026, including under the headings “Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation,” “Security Ownership of Management.” To the extent holdings of our common stock by our directors and executive officers have changed from the amounts of our common stock held by such persons as reflected therein, such changes have been or will be reflected on Initial Statements of Beneficial Ownership of Securities on Form 3, Statements of Changes in Beneficial Ownership on Form 4 or Annual Statements of Changes in Beneficial Ownership of Securities on Form 5, in each case filed with the SEC, including the Form 4s filed by each of the non-executive directors on August 6, 2025, the Form 4s filed by each of the executive officers on September 3, 2025, the Form 4s filed by each of the non-executive directors on November 5, 2025, the Form 4s filed by each of the non-executive directors on February 4, 2026, the Form 4s filed by each of the executive officers on April 3, 2026 and the Form 4s filed by each of the non-executive directors on May 6, 2026. FullBeauty Brands and its chief executive officer may be deemed to be participants in the solicitation of proxies from our stockholders in connection with the merger. Information about FullBeauty Brands and its chief executive officer was included as Exhibit 99.9 to our Current Report on Form 8-K filed on December 11, 2025. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement regarding the merger when it becomes available. Free copies of this document may be obtained as described above. No Offer or SolicitationThis communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. Investor Relations Contact: [email protected](603) 933-0541 Destination XL Group Media Contact: Aaron Palash / Michael Reilly / Carly KingJoele Frank, Wilkinson Brimmer Katcher(212) 355-4449

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Comparable sales of negative 3.8% represent the strongest quarterly result in three years, attributed to traction from turnaround initiatives despite persistent traffic challenges. Management identified a structural shift in demand driven by GLP-1 medication usage, leading to more dynamic sizing needs and a temporary pause in discretionary apparel spending. Merchandise strategy is pivoting toward private brands, specifically Harbor Bay, to serve as an opening price point and value driver for increasingly price-sensitive consumers. Operational focus has shifted to rebalancing the promotional calendar toward higher-margin and higher-inventory-risk categories to protect profitability while driving demand. Supply chain management is proactively pulling forward production and booking containers earlier to mitigate extended transit times that delayed key spring receipts. The direct-to-consumer channel outperformed physical stores, supported by enhancements to the mobile app and site speed which improved conversion rates. The company is prioritizing 'FitMap' technology, AI-driven search discovery, and GLP-1 data analysis as the three primary levers for long-term growth and customer retention. Guidance assumes a 100-basis point headwind to gross margin from currently enacted tariff rates, an improvement from the previous estimate of 150 basis points. Management expects to finalize and implement significant cost-saving actions in the coming months by reviewing corporate overhead and the store portfolio. Future merchandising will broaden assortments in smaller sizes to capture the 'return' of GLP-1 users once their size profiles stabilize. Capital expenditures for fiscal 2026 are projected between $8 million and $12 million, focused on technology initiatives and distribution center maintenance. CEO Harvey Kanter announced his intention to retire effective August 11, 2026, initiating a formal board-led succession planning process. The Board has determined that the existing terms of the pending merger with FullBeauty are not in the best interest of stockholders and is re-engaging in discussions. A $4 million refund claim was submitted to U.S. Customs and Border Protection for previously paid tariffs, though the timing of any realization remains uncertain. Inventory levels were reduced by $4.1 million year-over-year to maintain a clean position and align with softer macroeconomic demand. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. May comparable sales trended between -5% and -6%, impacted by consumer sensitivity to gasoline prices and global conflicts. Management remains optimistic for a second-half improvement, noting that current trends still represent an improvement over the last two years. Tariffs are expected to account for approximately 100 basis points of margin exposure this year. Promotional activity remains consistent with expectations, with upcoming Father's Day events planned to generate summer demand. Customers using FitMap demonstrate conversion rates approximately 100 basis points higher than non-users. Average order values for FitMap users are up 'meaningfully' in the double digits, and return rates for online purchases have decreased. The technology has been mapped to nearly 30 different brands to allow cross-brand sizing accuracy for scanned customers.