Destination XL Group, Inc. (DXLG) Q2 FY2026 earnings

Reported results

• Total sales for Q2 fiscal 2026 were $111.6 million, down 3.4% from $115.5 million in Q2 fiscal 2025; comparable sales decreased 3.5%.
• Net income (GAAP) for Q2 fiscal 2026 was $2.0 million, or $0.04 per diluted share, compared to a net loss of $0.3 million, or $0.00 per diluted share, in Q2 fiscal 2025; net income includes a $4.6 million tariff refund.
• Adjusted net income (non-GAAP) for Q2 fiscal 2026 was $0.05 per diluted share, compared to $0.01 per diluted share in Q2 fiscal 2025.
• Adjusted EBITDA (non-GAAP) for Q2 fiscal 2026 was $7.7 million, compared to $4.7 million in Q2 fiscal 2025.
• Gross margin rate for Q2 fiscal 2026 was 47.9%, up 270 basis points from 45.2% in Q2 fiscal 2025, primarily driven by a 340 basis point increase in merchandise margin, partially offset by a 70 basis point increase in occupancy costs.
• Cash and investments were $20.1 million at August 1, 2026, compared to $33.5 million at August 2, 2025, with no outstanding debt in either period.

Guidance

• Expected capital expenditures for fiscal 2026 are estimated at $8.0 million to $10.0 million, net of tenant incentives, down from previous estimate of $9.0 million to $12.0 million.
• Marketing costs for fiscal 2026 are expected to be approximately 5.8% of sales.
• If currently enacted tariff rates remain in effect throughout fiscal 2026 and no additional tariffs are added, the estimated impact on gross margin for fiscal 2026, exclusive of refunds realized, will be approximately 100 basis points.

Notes

A full valuation allowance was established against net deferred tax assets in Q4 fiscal 2025, resulting in an effective tax rate of (1.6)% for Q2 fiscal 2026. The company’s Board of Directors determined on September 2, 2026, that the proposed merger with FullBeauty is no longer advisable and recommended stockholders vote against the issuance proposal.

Price and volatility reaction

Source

The figures above come from the earnings release the company filed with the SEC on 2026-09-09 (8-K, Item 2.02). Read the original filing on sec.gov.