BMO Capital Reiterates Outperform on Duluth Holdings Inc. (DLTH) After Meeting with Management
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BMO Capital reiterated an Outperform rating and $35.00 price target on Duluth Holdings Inc. (NASDAQ: DLTH) following a tour of Hoffman Estates and meetings with management. The company indicated that the rural stores serve as destination locations, with nearly 50% of customers traveling about 50 miles. Within the first 12 months of a new store opening, about 50% of the customers are discovering Duluth for the first time. Duluth has opened three other stores in 2016, each of which has performed in line with or better than expectations.
Analyst John Morris commented, "We met with CEO Stephanie Pugliese, CFO Mark DeOrio, and Executive Chairman Stephen Schlecht at an Analyst day field trip to tour the company's Hoffman Estates, Illinois, location that opened last September. Management indicated that it was pleased with the initial performance of the new stores as they continue to meet/ surpass expectations. We believe there is ample opportunity for growth, given the accelerated pace of store expansions, which could likely drive sales and additional profitability once new stores begin to scale. We reiterate our Outperform rating on the shares."
Shares of Duluth Holdings closed at $27.02 yesterday.
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