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Destination XL’s fourth quarter total sales dropped 6% year over year to $112.1 million, per a Thursday press release. The company expects its merger with FullBeauty Brands to close in the second quarter of 2026, Destination XL President and CEO Harvey Kanter said in a statement.

The retailer’s comparable sales decreased 7.3% for the quarter, driven by an 8.6% drop in stores and a 4.3% hit to its direct business. DXL’s Q4 net loss jumped to $29.6 million from $1.3 million the same period last year.

Total sales for fiscal 2025 decreased 6.9% to $435 million and comps dropped 8.4%. Kanter on a call with analysts Thursday said the retailer is not providing specific guidance for fiscal 2026, but will revisit that after the merger is completed.

DXL’s CEO believes 2026 is off to a better start for the company and that it’s made progress on strategic initiatives. However, increased GLP-1 usage among customers is a looming concern for the plus-size apparel sector.

“We didn't think it was going to be impacting the business as much at the level we think today it is,” Kanter told analysts on a call regarding anecdotal and preliminary research the company has done on the topic. “We think [it] might be as much as 25% of our customers are using them. And typically, weight loss of any kind up or down is a friend of ours. But I think right now, we're in a pattern where they're losing weight and they're on a journey, and they're trying to not to buy clothes until they're done with that journey.”

Another pattern the company has seen with GLP-1 users is that they are moving around in sizing, not just going down. Some customers on the medication may be losing weight, but then may stop usage and go back up in sizing, creating “volatility,” as Kanter described it.

The company's "hope and belief" is that the customer comes back eventually, Kanter added.

DXL’s pending merger with FullBeauty Brands would mean combining two major players in the plus-size apparel sector. Once combined through an all stock transaction, FullBeauty Chief Executive Officer Jim Fogarty will be CEO of the new company.

FullBeauty will own 55% of the company while DXL will own 45%, with DXL remaining a publicly traded company.

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