Duluth Holdings Inc. (DLTH): Business Model Canvas [Dec-2025 Updated]

You're looking at the engine room of Duluth Holdings Inc., and after two decades analyzing retail, I can tell you their model is built on durable goods and a distinct, humorous voice that cuts through the noise. We see this play out in the numbers: Q2 saw a 54.7% Gross Margin, but they are actively managing cost pressures like the estimated $15 million tariff impact for FY2025, all while pushing their DTC e-commerce, which hit $62.6 million in Q1. The core value-solution-based gear backed by the No Bull Guarantee-fuels their omnichannel approach, even as SG&A hit $68.8 million in Q2. Dive into the full canvas below to see exactly how their Key Activities, like proprietary fabric innovation, support this unique position against the backdrop of their $17 million planned CapEx for technology this fiscal year.

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Key Partnerships

You're looking at the backbone of how Duluth Holdings Inc. gets its product made and into the customer's hands, which is all about who they rely on outside their own four walls. Honestly, their entire product flow hinges on these external relationships, from the factory floor to the final delivery scan.

Third-party manufacturers/vendors for merchandise sourcing globally are central, as Duluth Holdings Inc. doesn't own any manufacturing facilities. They arrange production with a variety of domestic and international suppliers. The sourcing strategy actively seeks vendors providing the quality materials and craftsmanship their customers expect.

The reliance on a single sourcing channel is significant, though it appears to be shifting. For fiscal 2024, the data shows a clear concentration:

This agent partner in Hong Kong manages multiple factories across Asia and Latin America. It's defintely worth noting that the reliance on this single agent decreased from 59% in fiscal 2023 to 43% in fiscal 2024, suggesting some diversification efforts.

When it comes to moving the goods, the logistics and fulfillment technology partners are driving major efficiency gains, especially with their 'Big Dam Blueprint' strategy.

• Manhattan Associates: Implemented Manhattan Active® WMS, TMS, and Omni.
• Fulfillment Network Scale: Solutions help scale across three DCs and sixty-five stores.
• Specific Manhattan Solutions: Includes Manhattan Active Order Management and Manhattan Active Store Inventory & Fulfillment.
• Manhattan Associates 2024 Revenue: Reported at $1.042 billion.

The investment in automation through Bastian Solutions, a Toyota Advanced Logistics company, is also a critical component of their network optimization. This partnership focuses on high-throughput, automated distribution centers.

Here's the quick math on the impact of the newest automated facility:

• Bastian Partnership Count: The Adairsville, Ga. facility is the third automated distribution and fulfillment center partnership with Bastian Solutions.
• New Facility Capacity: The Adairsville omnichannel facility can process and ship 160,000 units per day.
• Cost Efficiency: The Adairsville center handles over 60% of total volume at a 66% lower cost per unit than legacy facilities.
• Facility Consolidation Savings: Closing the Dubuque facility results in approximately $5 million in annual cost savings.

Finally, the brand's distinctive voice relies on external creative support. While specific agency names aren't public financial line items here, the partnership strategy is clear in its output.

The creative agencies are tasked with executing the humorous, authentic storytelling that defines the brand. This approach is integral to their customer acquisition strategy, which they expect to continue spending significant amounts on to grow the customer base.

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Key Activities

You're looking at the core engine of Duluth Holdings Inc. right now, which is heavily focused on operational discipline and streamlining after a period of complexity. The key activities are all about making the existing structure work harder and smarter, rather than just chasing top-line growth at any cost.

Product Innovation and Development of Proprietary Fabrics (e.g., Fire Hose®)

Product innovation remains a stated focus, though recent activity leans toward rationalization. Management is conducting an in-depth review of the brand and product portfolio to reinvigorate the Duluth brand. This is happening alongside a product rationalization strategy aiming to narrow the assortment by a target of 20% by Spring 2026. This focus on core products, enhanced by innovation like the Men's Flex Fire Hose HD and Women's NoGa Air lines, is intended to streamline operations.

Direct-to-Factory Sourcing to Improve Product Costs and Speed

Direct-to-factory sourcing is a clear lever being pulled to improve margins. In the first quarter of fiscal 2025, the improvement in product costs from this initiative partially offset a gross profit margin rate decrease. For the second quarter of fiscal 2025, gross margin expanded by 240 basis points to 54.7%, driven by cost-cutting and reduced markdowns, which includes sourcing benefits. The company is also mitigating an estimated $15 million in tariff-related costs for FY2025, having already offset some pressure through $10 million in cost-saving initiatives.

Here's a quick look at how sourcing and cost control impacted recent performance:

Omnichannel Fulfillment and Logistics Network Optimization

Logistics optimization is a major activity, specifically aimed at improving efficiency and customer experience. Duluth Holdings Inc. recently implemented Manhattan Active® Omni to integrate inventory visibility across its four distribution centers and 65 stores. This technology is key to serving customers with the fulfillment options they choose. The Adairsville automated fulfillment center is a prime example of this optimization; it processed 64-65% more units over the Black Friday weekend compared to legacy facilities, with a variable cost per unit (CPU) that is 73% lower than the old facility. The company has stated that these efforts have already reduced delivery times by 30%.

Channel performance shows a dynamic shift in how customers are buying:

• Direct-to-consumer net sales were $62.6 million in Q1 2025, a 17.1% decrease year-over-year.
• Retail store net sales were $40.2 million in Q1 2025, a 2.6% decrease year-over-year.
• In Q2 2025, store sales increased by 5.3%, while direct channel sales (excluding wholesale) declined 18%.

Distinctive, Humorous Brand Marketing and Content Creation

Maintaining the distinctive brand identity, anchored by humor and storytelling, is critical for customer acquisition. The strategy involves digital and email marketing, television, radio, social media presence on platforms like Facebook, Instagram, and YouTube, and the continuation of heritage catalogs. The company is intensifying focus and investments in its direct channel as the primary growth vehicle. In Q3 2024, advertising deleveraged 240 basis points to 15.3% of sales as revenue fell, showing the cost impact when top-line performance lags.

Strategic Cost Structure Right-Sizing and Business Simplification

The current management team is taking decisive actions to simplify the business and streamline the expense base. This is a direct response to challenging operating performance where Selling, General and Administrative (SG&A) expenses deleveraged to 64.0% of net sales in Q1 2025, up from 60.5% the prior year. A key part of the right-sizing is fulfillment network optimization, specifically the exit from the Dubuque facility, which is driving an estimated $5 million in annual run-rate SG&A savings starting in Q4 2025. The company is maintaining its FY2025 Adjusted EBITDA guidance in the range of $20 million to $25 million, signaling confidence that these cost actions will return the company to profitable growth.

The company ended Q1 2025 with $8.6 million in cash and cash equivalents and $44.6 million in net liquidity.

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Key Resources

You're looking at the core assets that let Duluth Holdings Inc. deliver its value proposition. These aren't just things they own; they are the engines driving customer connection and operational efficiency.

Proprietary product technologies and trademarks form the bedrock of product differentiation. These registered assets are what allow Duluth Holdings Inc. to claim unique solutions in the market. As of the fiscal year ended February 2, 2025, the company's key intellectual property included a portfolio of registered marks:

• AKHG®
• Alaskan Hardgear®
• Armachillo®
• Ballroom®
• Buck Naked®
• Bullpen®
• Cab Commander®
• Crouch Gusset®
• Dang Soft®
• Dry on the Fly®
• Duluth Trading Co®
• DuluthFlex®
• Fire Hose®
• Flexpedition®
• Longtail T®
• NoGA®
• No Polo Shirt®
• No Yank®
• Spit & Polish®
• Wild Boar®

The Duluth Trading brand equity, built on its humorous and authentic voice, is a massive intangible asset. This voice conveys product uniqueness in a distinctive, fun way, which IRI data suggested leads to higher customer satisfaction compared to competitors in their set. Maintaining and enhancing this brand is critical to customer acquisition.

The omnichannel technology platform supports integrated inventory management across all touchpoints. Mobile execution, a key part of this platform, showed strong penetration in the third quarter of fiscal 2025 (quarter ended October 27, 2024):

• 71% of website visits were via mobile.
• 57% of sales were via mobile.

The company is actively leveraging foundational work on this platform, including a focus on product sourcing and fulfillment center network optimization to streamline the expense base.

The physical retail footprint provides a tangible presence for customers to experience the brand. As of February 2, 2025, the company operated a network of stores:

The company also relies on four strategically located distribution and fulfillment centers, though specific details on the total count are often discussed in the context of optimization efforts. A major focus has been on the fulfillment network optimization, which includes the exit of the Dubuque facility and the ramp-up of the Adairsville automated center. This optimization is a key driver for cost reduction:

• Adairsville variable cost per unit (CPU) is 73% lower than legacy facilities.
• This optimization is expected to drive approximately $5 million in annualized SG&A savings beginning in the fourth quarter of fiscal 2025.

This infrastructure work is designed to support the business as it simplifies operations.

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Duluth Holdings Inc. over the competition, grounded in their late 2025 operational snapshot. The value isn't just in the fabric; it's in the promise of function and the brand's distinct voice.

High-quality, durable, solution-based apparel for work and outdoor life remains the bedrock. This is evidenced by the brand's focus on material innovation, even as the top line faced headwinds. For instance, in the third quarter of fiscal 2025, the gross margin expanded to 52.3%, driven by sourcing benefits, suggesting that the underlying product cost structure and perceived quality are being actively managed. This focus on durable goods is what keeps customers coming back, despite a challenging top-line environment where net sales for Q3 2025 were $127.1M.

Proprietary features are key differentiators that solve real problems for the customer. While the Crouch Gusset® is the classic example, the success of newer innovations shows this value proposition is alive. In the third quarter of fiscal 2025, the AKHG brand, which carries the same DNA of performance and durability for outdoor recreation, grew by 6%. Furthermore, specific collections like the her all time favorite garden heirloom collection saw growth of nearly 70% in that same quarter, pointing to successful solution-based product development.

The No Bull Guarantee lifetime warranty and straightforward return policy act as a powerful risk-reversal mechanism for the buyer. The stated policy is a refund within one year if you are not satisfied, with consideration for defects after that period. This commitment underpins the belief in their product quality, which is meant to last longer and function smarter.

Engaging, humorous, and distinctive marketing builds brand loyalty that transcends mere product features. The company's advertising, which features animated characters, is intentionally humorous and quirky to highlight solution-based features. This approach helps the brand appeal to customers who identify with the Duluth Trading name, a critical factor for customer acquisition.

The multi-brand offering, specifically with AKHG for outdoor recreation, broadens the appeal beyond core workwear. The growth in AKHG in Q3 2025 to 6% shows traction in this adjacent segment. This diversification strategy is part of a broader focus on core strengths under new leadership, aiming to simplify the business and drive shareholder value.

Here's a quick look at how the financial performance in 2025 supported the operational focus on product quality and cost control, which feeds directly into the value proposition:

The company's commitment to operational excellence is also a hidden value proposition, as seen in fulfillment optimization. The Adairsville automated FC processed 64-65% more units over a key weekend with a variable CPU that is 73% lower than legacy facilities, translating to an estimated $5M annual run-rate savings.

• High-quality, durable apparel for hands-on life.
• Proprietary features like the Crouch Gusset®.
• No Bull Guarantee: Refund within one year for dissatisfaction.
• Marketing that uses humor and storytelling.
• AKHG brand showing growth, up 6% in Q3 2025.

If you're assessing the brand's ability to deliver on its promise, look at the gross margin expansion to 52.3% in Q3 2025, achieved despite a sales decline. Finance: draft the Q4 2025 inventory projection by next Tuesday.

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Customer Relationships

You're looking at how Duluth Holdings Inc. keeps customers engaged across its channels as of late 2025. The relationship strategy mixes digital transactions with physical experience and a core promise.

Transactional via e-commerce and catalog orders represents a significant, though fluctuating, part of the business. For the first quarter of fiscal 2025, ended May 4, 2025, Direct-to-consumer net sales were $62.6 million, which was a 17.1% decrease year-over-year, primarily due to lower site traffic. However, by the second quarter of fiscal 2025, this trend showed a pivot, with Direct sales increasing to $53 million from $50 million in the prior year period. The company is focusing on optimizing this channel, as evidenced by the strategy to intensify focus and investments in the direct channel as the primary growth vehicle.

The physical retail component is being redefined as experiential hubs, not just points of sale. As of the second quarter of fiscal 2025, retail store sales were $79 million, down from $92 million the year prior. The company was on track to open two new stores and close one store in the second half of 2025, maintaining a portfolio of 65 existing stores. These new locations are designed to feature interactive displays, complementing the digital experience with in-store pickups and returns.

The foundation of long-term trust rests heavily on the No Bull Guarantee promise. The current stated policy is clear: If you are not satisfied with any item, return it for a refund within one year. After that year, the company will still consider returns for items that are defective or do not perform as designed. This guarantee is central to the brand's identity, though some customer sentiment suggests a perceived shift toward covering only product flaws and failures, not ordinary wear and tear.

Community building is supported by marketing that leans into the brand's authentic, humorous, and hardworking attributes. New subscribers who join the email list receive an exclusive discount of 20% OFF their next order. The company also supports its people-first culture through community efforts, with fundraising activities generating over $125k last year for the Employee Assistance Fund.

Here's a look at the channel performance for the first half of fiscal 2025:

The reliance on customer feedback for product improvement is formalized through continuous testing:

• Field Tested, Customer Trusted: Duluth Trading relies on expert feedback from hardworking customers.
• If it doesn't break during testing, it's available to buy.
• The company asks customers to report what they see so it can continually increase quality.

The commitment to the customer experience is also reflected in the operational focus on simplification and brand awareness. Finance: draft 13-week cash view by Friday.

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Channels

Direct-to-Consumer (DTC) e-commerce website (primary growth vehicle).

For the first quarter of fiscal year 2025, Direct-to-consumer net sales were $62.6 million, representing a decrease of 17.1% compared to the prior year period. However, for the fourth quarter of fiscal 2025, Direct-to-consumer net sales increased by 0.4% to $172.9 million.

Print catalogs for customer acquisition and retention.

Duluth Holdings Inc. sells products exclusively through its content-rich website, catalogs, and retail locations. Specific revenue contribution from print catalogs is not separately itemized from the overall DTC sales figure of $62.6 million for Q1 FY2025.

65 brick-and-mortar retail stores across the U.S.

As of February 2, 2025, Duluth Holdings Inc. operated 62 retail stores and three outlet stores. The company planned to open two new stores in priority markets in Fall 2025, including a flagship location in Kansas City, Kansas, which is 16,000-square-foot.

Ship-from-store and Buy Online, Pick Up In Store (BOPIS) omnichannel services.

The omnichannel services fully integrated across all sales channels include order-in-store, buy-online-pickup-in-store, and ship-from-store. New experiential stores in 2025 focus on in-store pickups and product demonstrations.

Channel performance comparison for recent reporting periods:

The company employed 1,085 employees at its retail stores as of February 2, 2025.

Key operational focus areas related to channels include:

• Intensify efforts to optimize Duluth Holdings Inc.'s owned retail channels as the primary growth vehicle.
• Conducting strategic research for future stores regarding new locations, market share potential, size, format, and assortment.
• The Kansas City store opening in September 2025 is a 16,000-square-foot location.
• The company is committed to leveraging foundational work on fulfillment center network optimization and store portfolio rationalization.

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Customer Segments

You're analyzing the core of Duluth Holdings Inc., which is built around a very specific type of consumer. This customer segment is the Modern, Self-Reliant American. They value durability, functionality, and a job well-done ethos, which is reflected in how Duluth Holdings Inc. designs its products.

The overall customer base is served through an integrated multichannel platform, which includes direct-to-consumer channels (website and catalog) and brick-and-mortar retail locations. As of August 3, 2025, Duluth Holdings Inc. operated 61 retail stores and three outlet stores across the United States.

Here's a look at the sales distribution across the primary channels for the most recently reported period, which gives you a sense of where the customer base is transacting:

The core segment remains the men's workwear and casual apparel consumers. This group is the historical anchor for Duluth Holdings Inc., seeking out proprietary fabric technologies and design features like articulated knees and secure storage pockets for their hands-on work.

The growth segment is women's apparel and accessories. Duluth Holdings Inc. is actively refining this assortment to capture more of this market, which is a key focus area for management moving forward.

• The brand emphasizes its commitment to size-inclusive offerings within this segment.
• The company is focused on driving profitable growth by simplifying the business and focusing on core strengths, which includes the women's line.

Outdoor enthusiasts and adventurers form another distinct segment, primarily served through the AKHG brand. This line is built for year-round performance in varied conditions, from harsh wilderness to general outdoor recreation. This segment is characterized by a desire for technical design elements that boost versatile, long-term use.

• AKHG showcases an expansion into all-weather performance apparel and gear.
• The AKHG line includes specific product collections like the Crosshaul Collection, featuring fabric with a TOUGH COTTON finish that is three times more abrasion-resistant than regular cotton.
• The brand's focus is on the 'rolled-up-sleeves side of adventure.'

Finance: draft 13-week cash view by Friday.

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Cost Structure

The Cost Structure for Duluth Holdings Inc. reflects the ongoing investment required to support its value proposition of quality and durability, alongside significant efforts to manage external pressures like tariffs and internal efficiency drives.

High Cost of Goods Sold (COGS) is inherent due to the focus on product quality and durability, which commands a premium in sourcing and manufacturing. This is evidenced by the Gross Margin in the second quarter of fiscal 2025 reaching 54.7%. This margin performance is an improvement over the first quarter of 2025, where the Gross Profit Margin Rate was 52.0%.

Selling, General, and Administrative (SG&A) expenses represent a significant component, though management is actively working on leverage through cost control. For the second quarter of 2025, SG&A spend was reported at $68.8 million, which was a decrease of $5.2 million from the prior year period. As a percentage of sales for Q2 2025, SG&A was 52.2%.

The company is actively managing inventory levels, which carries associated carrying costs. Duluth Holdings reported a 12% year-over-year reduction in inventory for the second quarter of 2025. Ending inventory for Q2 2025 stood at $148.1 million, down from an implied level of approximately $168.3 million in Q2 2024 based on the reported reduction.

Capital investment remains a cost factor, directed toward both physical footprint expansion and operational improvements. The fiscal year 2025 guidance for capital expenditures is set at approximately $17 million, supporting new store openings and technology investments. This is a reduction from the $17.4 million spent in fiscal 2024.

A major external cost factor is the impact of tariffs on imported goods. Duluth Holdings is factoring in an estimated tariff impact of $15 million for the full fiscal year 2025. The company has taken proactive steps, including price increases and vendor negotiations, to mitigate this, as the impact in Q2 2025 was negligible, with the effect expected to be felt more strongly in the second half of the year.

Here's a quick look at key cost-related metrics from the recent reporting periods:

• Q2 2025 SG&A spend: $68.8 million
• FY2025 CapEx Guidance: Approximately $17 million
• FY2025 Estimated Tariff Impact: $15 million
• Q2 2025 Inventory Reduction YoY: 12%
• Q2 2025 Advertising as a percentage of sales: 8.9%

The following table summarizes the key financial figures impacting the Cost Structure as of the latest available reports:

Duluth Holdings Inc. (DLTH) - Canvas Business Model: Revenue Streams

You're looking at how Duluth Holdings Inc. actually brings in money as of late 2025. It's a mix of selling directly to you and through their physical stores, with a clear focus on their unique product offerings.

The revenue streams are clearly segmented across their primary channels. For the first quarter ended May 4, 2025, the Direct-to-consumer channel, which includes e-commerce and catalog, generated $62.6 million in net sales. Retail store sales for that same period were $40.2 million.

The second quarter ended August 3, 2025, showed a divergence in channel performance. While the overall net sales for Q2 2025 were $131.7 million, the direct-to-consumer segment (e-commerce and catalog combined) was $79.1 million, showing a year-over-year decrease of 13.7%. Conversely, retail store net sales for Q2 2025 grew by 5.3% to reach $52.6 million.

Here's a quick look at how those key channels stacked up in the first half of fiscal 2025:

The proprietary product lines are central to the value proposition, driving much of the brand's identity and margin strength, which improved to 54.7% in Q2 2025. While specific revenue for legacy lines like Fire Hose® pants or Buck Naked® underwear isn't broken out, performance indicators for newer innovations and sub-brands are visible.

The revenue derived from catalog-driven orders is bundled into the Direct-to-Consumer figures. For Q2 2025, the combined Direct sales figure was $79.1 million, which saw lower traffic, though higher average order values provided some offset.

You can see the focus on product differentiation in the recent performance:

• The AKHG brand saw growth exceeding 10% in both men's and women's categories during Q2 2025.
• New product lines launched in Q2 2025 included the Artisan Hemp collection and the Seawool collection.
• The overall gross margin expansion to 54.7% in Q2 2025 was partly due to reduced promotional activity, suggesting premium pricing or less discounting on core, proprietary items.

Finance: draft 13-week cash view by Friday.