Destination XL Group Inc Stock Downgraded (DXLG)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK (TheStreet) -- Destination XL Group (Nasdaq:DXLG) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share.
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- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 1407.1% when compared to the same quarter one year ago, falling from $4.22 million to -$55.15 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, DESTINATION XL GROUP INC's return on equity significantly trails that of both the industry average and the S&P 500.
- DESTINATION XL GROUP INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DESTINATION XL GROUP INC swung to a loss, reporting -$1.23 versus $0.17 in the prior year. This year, the market expects an improvement in earnings ($0.08 versus -$1.23).
- 45.29% is the gross profit margin for DESTINATION XL GROUP INC which we consider to be strong. Regardless of DXLG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, DXLG's net profit margin of -50.80% significantly underperformed when compared to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.2%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
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