Editor's Note

This unconventional retailer is setting new highs. Duluth Holdings posted a massive rally in June and is holding the gains.

I was going to add two this weekend but with earnings in full swing, the choices under $30 were very slim.


New positions are only added on Wednesday and Saturday except in special circumstances.


DLTH - Duluth - Company Description

Duluth Holdings Inc. sells casual wear, workwear, and accessories for men and women under the Duluth Trading brand in the United States. It provides shirts, pants, underwear, tanks, outerwear, footwear, accessories, and hard goods. The company offers its products under various trademarks, trade names, and service marks, including Alaskan Hardgear, Armachillo, Ballroom, Bucket Master, Cab Commander, Crouch Gusset, Dry on the Fly, Duluth Trading Co, Duluthflex, Fire Hose, Longtail T, No-Yank, No Polo Shirt, Wild Boar Mocs, and Buck Naked. Duluth Holdings Inc. markets its products through its Website, catalogs, and retail stores. As of June 7, 2018, it operated 38 retail stores. The company was formerly known as GEMPLER'S, Inc. Duluth Holdings Inc. was founded in 1989 and is headquartered in Belleville, Wisconsin. Duluth Holdings Inc. is a subsidiary of Ariens Company. Company description from FinViz.com.

On June 5th, Duluth reported a loss of 2 cents that beat analyst estimates for a loss of 5 cents. However, revenue rose 20% thanks to the 13 new stores opened in 2018. They now have 39 stores and are shooting for 100. The rapid expansion and capex spending is powering sales higher. However, even with 18 more stores and revenue of $100.2 million that missed estimates for $101.3 million.

On the positive side brick and mortar sales rose 71% but direct web sales rose 4% to account for 70% of all sales. They guided for the full year for revenue of $555-$575 million and earnings of 70-84 cents.

Despite the minor revenue miss shares exploded higher after a short term post earnings dip. Shares peaked at $24.80 on July 2nd and have held at that level lfor three weeks. On Friday they closed at a new high.

Earnings September 4th.

Unfortunately, that new high closed at $25.02 and taking the $25 strike out of play. The next strike is $30 in November. While it is possible for the stock to get there, i can't recommend that far away on a $25 stock. If you want to take a chance on the Nov $30 call it is 90 cents. This will be a stock only position.

Buy DLTH shares, currently $25.02, stop loss $24.00.


No New Bearish Plays