Good day, everyone. And welcome to the Destination XL Group Inc. First Quarter Fiscal 2025 Financial Results Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Ms. Shelly Mokas, Vice President of Financial Reporting and SEC Compliance at DXL. Please go ahead, Shelly.

Thank you. And good morning, everyone. Thank you for joining us on Destination XL Group's first quarter fiscal 2025 earnings call. On our call today are our President and Chief Executive Officer, Harvey Kanter; and our Chief Financial Officer, Peter Stratton. During today's call, we will discuss some non-GAAP metrics to provide investors with useful information about our financial performance. Please refer to our earnings release, which was filed this morning and is available on our Investor Relations Web site at investor.dxl.com for an explanation and reconciliation of such measures. Today's discussion also contains certain forward looking statements concerning the company's strategic initiatives and marketing strategies, expectations for comparable sales, potential impact of current tariffs and other expectations for fiscal 2025. Such forward looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those assumptions mentioned today due to a variety of factors that affect the company. Information regarding risks and uncertainties is detailed in the company's filings with the Securities and Exchange Commission. I would now like to turn the call over to our CEO, Harvey Kanter. Harvey?

Thank you, Shelly. And good morning, everyone. As always, we appreciate all of you joining us today for an update on our business, specifically about how we are navigating in this challenging environment and hearing about our performance in the first quarter. On our last earnings call in mid-March, I shared how through the first six weeks of the quarter, our comp sales were down 12.5% and projected that quarter would likely end down in a low double digit comp decline. I am pleased to report that sales performance in the first quarter improved and we ended up with a comp sales decline of 9.4%. This is a small improvement from our thinking in mid-March but we are encouraged by the implications, which we believe at least partially stem from the initiatives designed for greater consumer engagement with the focus on creating greater value and in all cases this is meaningful. We are beginning to see a small improvement in sales from a combination of these strategic initiatives designed to drive value and capture a greater share of demand. In addition, we expect to benefit from easier comp comparisons later as we move through 2025. We expect comparable sales to continue to gradually improve over the year, delivering a single digit negative in the second quarter and a return to a positive comp result in the second half of the year. There are several topics, which I want to update you all on today. But I thought it was important starting with our comp sales performance as we work feverishly to regain our trajectory and ultimately sales growth. A second topic that I expect is at the top of everyone's mind these days is the impact of reciprocal tariffs on our business. As we know, the situation with tariffs is…

Thank you, Harvey. And good morning, everyone. I'll start with some additional color around our first quarter financial performance. Net sales for the first quarter were $105.5 million as compared to $115.5 million in the first quarter of last year. The decrease in net sales was primarily due to a decrease in comparable sales for the first quarter of 9.4%, partially offset by an increase in non-comparable sales from new stores. As Harvey noted, sales trends improved month-over-month with comparable sales down 13.9% in February, down 8.2% in March and down 7.2% in April. Overall, the first quarter decline was consistent with the sales trend in fiscal 2024 as customers continued to pull back on discretionary spending and shifted toward our private label merchandise and value driven brands, which sell at lower average unit retails but generate higher margins. Our gross margin rate inclusive of occupancy costs was 45.1% as compared to 48.2% in the first quarter of last year. The 310 basis point decrease was primarily due to a 280 basis point increase in occupancy costs as a percentage of sales due to the deleveraging from lower sales and increased rents from new stores and lease extensions. Merchandise margins decreased by 30 basis points as compared to the first quarter of last year, primarily due to an increased markdown rate from the promotional offers and marketing initiatives that Harvey spoke about, partially offset by the benefit from the shift in product mix towards private label. In response to the tariff situation, we accelerated some of our inventory receipts to get them on the water before the tariffs took effect. We feel very good about our inventory position, both in terms of total inventory balance at the end of the quarter and in relation to our turnover rates as well…

Thanks, Peter. I'll close with this statement and while it may seem like a broken record, our team and the people of DXL are part of our secret sauce. Given this, as always, I remain energized by the dedication and the passion of the entire DXL team to serve the underserved big and tall consumer. None of this would be possible without the hard work and dedication of all of our people in the stores, in the distribution center, in the corporate office and the guest engagement center. It is because of this talented team and the culture we've created that I want to get up every morning and keep moving on this journey. Thank you for all your hard work and commitment in pursuit of serving big and tall men and making DXL the place where they can choose their own style and wear what they want. And with that operator, we will now take questions.

[Operator Instructions].

Operator, if there's no questions, we will wish everyone on the call a good summer, and look forward to regrouping with everyone in August, late August when we have our next quarterly earnings call.

We do have one question. It is coming from the line of Will Forsberg of Craig Hallum [Operator Instructions]. And now there are no more questions in the queue. I would like to turn the call back over for closing remarks.

We appreciate everyone's interest in DXL and look forward to a wonderful summer and continuing our move back to growth. And look forward to talking to you all in August. Thank you so much. Have a wonderful summer.

Thank you all for participating in today's conference call. You may now disconnect.