Lands' End reports loss, revenues decrease
Lands’ End, Inc. reported fourth quarter net revenue decreased 4.6 percent to 529.6 million dollars,
For the fiscal year, net revenue decreased 5 percent to 1.56 billion dollars. Global ecommerce net revenue decreased 10.1 percent to 1.1 billion dollars for the fiscal year.
Commenting on the fourth quarter and full year trading, Andrew McLean, the company’s chief executive officer, stated: “We executed well throughout the fourth quarter to deliver sequential sales and margin improvement in each month of the quarter, resulting in revenue and adjusted EBITDA at the higher end of our expectations. We are pleased to see this momentum continue in the first quarter, particularly in our core swim category.”
Lands’ End fourth quarter financial highlights
The company’s global eCommerce net revenue was 414.5 million dollars, a decrease of 6.1 percent in the fourth quarter as a result of industry-wide promotional activity and macroeconomic challenges impacting consumer discretionary spending. The company said in a release that U.S. ecommerce decreased 1.5 percent and International ecommerce decreased 30.8 percent which includes the previously announced closure of the Japan ecommerce business.
Outfitters net revenue was 60.5 million dollars, a decrease of 2.1 percent driven by the fulfilment of school uniforms in fiscal 2022 in line with the back to school selling season slightly offset by demand within the company’s travel-related national accounts.
Third Party net revenue, which includes sales on third-party marketplaces and U.S. wholesale revenues, was 39.2 million dollars, an increase of 8 percent driven by sales growth in the Kohl’s marketplace and existing and new online marketplaces.
Retail net revenue was 15.4 million dollars. The U.S. company operated stores experienced a decrease of 3.9 percent in same store sales as compared to the fourth quarter of fiscal 2021.
Gross margin decreased approximately 340 basis points to 32.5 percent as compared to 35.9 percent in the fourth quarter of fiscal 2021. Net loss was 3.3 million dollars or 10 cents loss per diluted share compared to net income of 7.1 million dollars or 21 cents per diluted share in the fourth quarter of fiscal 2021. Adjusted EBITDA was 24.2 million dollars compared to 27.3 million dollars in the fourth quarter of fiscal 2021.
Review of Lands’ End full year results
Net revenue in U.S. ecommerce decreased 7 percent and international ecommerce decreased 24.6 percent.
Outfitters net revenue increased 4.6 percent to 265.9 million dollars, driven by stronger demand within the company’s travel-related national accounts and school uniform customers returning to historical purchasing patterns. Third party net revenue increased 37.5 percent to 119 million dollars, primarily attributed to sales growth in the Kohl’s marketplace and existing and new online marketplaces.
Retail net revenue increased 0.8 percent to 48.2 million dollars. The U.S. company operated stores experienced an increase of 1.5 percent in same store sales as compared to fiscal 2021.
Gross margin decreased approximately 410 basis points to 38.2 percent, compared to 42.3 percent in fiscal 2021. Net loss was 12.5 million dollars or 38 cents loss per diluted share compared to net income of 33.4 million dollars or 99 cents earnings per diluted share in fiscal 2021. Adjusted EBITDA was 70.5 million dollars compared to 120.9 million dollars in fiscal 2021.
Lands’ End announces outlook for Q1 and FY23
For the first quarter net revenue is expected to be between 295 million dollars and 310 million dollars, net loss is expected to be between 5 million dollars and 3 million dollars and diluted loss per share to be between 15 cents and 9 cents and adjusted EBITDA in the range of 13 million dollars to 16 million dollars.
For fiscal 2023 the company expects net revenue to be between 1.56 billion dollars and 1.62 billion dollars, net loss to be between negative 6 million dollars and positive 1 million dollars and diluted loss per share to be between negative 18 cents and positive 3 cents and adjusted EBITDA in the range of 72 million dollars to 82 million dollars.