Destination XL Group Cuts FY13 Outlook; CFO Dennis Hernreich Resigns

(RTTNews) - Destination XL Group, Inc. (DXLG) said it expects loss per share for fiscal 2013 to be in the range of $0.11 to $0.13 per share compared with previous guidance of a net loss of $0.05 per share. The guidance excludes severance and post-employment benefits charges.

The company lowered its fiscal 2013 sales guidance to about $388.0 million, from the previous estimate of $395.0 million.

Analysts polled by Thomson Reuters expected the company to report a loss of $0.05 per share and revenues of $394.95 million for fiscal year 2013. Analysts' estimates typically exclude special items.

"In line with much of the retail industry, which faced challenges in the fourth quarter, particularly in the holiday selling season, our December sales results fell below our expectations," said David Levin, President and Chief Executive Officer.

During the key selling weeks between Black Friday and Christmas, store traffic was down approximately 4% from the prior year as a result of weather in some geographies, as well as continued sluggish consumer buying behavior. This decrease in traffic, disproportionately impacted by the fact that the 2013 holiday season was shorter by six days compared with 2012, negatively affected the fourth-quarter sales causing the company to reduce earnings expectations for the year, the company said. For the fourth quarter and fiscal year 2013, comparable sales for the Company are expected to increase approximately 3.9% and 2.9%, respectively, from the prior-year period. The increase in comparable sales for fiscal 2013 was previously expected to be approximately 5.0%. Sales for the Company's 95 comparable Destination XL or "DXL" stores are expected to increase 15.2% for the fourth quarter and 19.1% for fiscal year 2013.

In addition, Destination XL Group announced the resignation of its Executive Vice President, Chief Operating and Chief Financial Officer, Dennis Hernreich, and the appointment of Board Member John Kyees as Interim Chief Financial Officer.

Kyees, who has served on the Destination XL Board of Directors since 2010, was CFO of Urban Outfitters from 2003 until his retirement in 2010, and has served as a senior financial executive at several other prominent retailers. The Company is conducting a search for a permanent CFO.

The company also announced that it has elected Will Mesdag, 60, to its Board of Directors. Will Mesdag's election to the Destination XL Board of Directors expands the size of the Board to 10 members. Mesdag will serve as a director until the Company's next annual meeting of stockholders, at which time he will stand for re-election.