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Duluth Holdings (DLTH) Surges 10.8%: Is This an Indication of Further Gains?

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Duluth Holdings (DLTH - Free Report) shares rallied 10.8% in the last trading session to close at $20.65. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 11.2% gain over the past four weeks.

Duluth Holdings’ shares have been getting a boost from the optimism regarding consumers resuming shopping for apparel and related products – with pandemic-induced curbs being lifted and people resuming outdoor activities. On its first-quarter fiscal 2021 earnings call, management stated that consumers were giving positive response to the company’s spring/summer collections, as they started moving out. Apart from this, strength in Duluth Holdings’ omnichannel operations has been a driver. In the first quarter, net sales advanced 21.4% to $133.4 million, with retail store sales and direct-to-consumer sales increasing year over year.

This clothing and tools supplier is expected to post quarterly earnings of $0.03 per share in its upcoming report, which represents a year-over-year change of -83.3%. Revenues are expected to be $141.73 million, up 3.2% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Duluth Holdings, the consensus EPS estimate for the quarter has been revised 30.8% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on DLTH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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