Investor Relations

Lands’ End Posts Fiscal Q4 Loss

A $98 million write-down of the value of the Land's End name and a 6% drop in net sales were the lowlights.
Katie Kuehner-HebertMarch 17, 2016

Lands’ End posted a loss for both its fiscal fourth quarter and full year 2015, describing it as a “transition” year after spinning off from Sears in 2014.

For its fiscal fourth quarter that ended Jan. 29, the Dodgeville, Wis.-based clothing retailer posted a loss of $39.5 million, or $1.23 a share, compared with a profit of $33.1 million, or $1.03 a share, a year earlier.

The loss was exacerbated by a $98.3 million write-down of the Land’s End trade name. Excluding the write-down, adjusted income was $22.6 million, or 71 cents a share.

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A product recall due to the failure of meeting the federal flammability standard for some of the retailer’s children’s sleepwear also hurt profits. Net sales in the fourth fell 6.1%, to $473.5 million.

For the full fiscal 2015, Land’s End’s net loss was $19.5 million, or 61 cents a share.

“While we made meaningful progress in the business throughout 2015, these efforts are not yet reflected in our financial performance,” Lands’ End’s chief executive Federica Marchionni said in a press release. “This past year was a transition year for Lands’ End, during which we were intently focused on creating a solid foundation from which to grow over the long term.”

Over the last year, the company brought in more executives, updated its product assortment, revamped its catalogs, and enhanced its branding efforts.

“As we look to 2016, we will continue to develop a product assortment that is both timeless and updated, with improved fit and quality,” Marchionni said. “We also remain focused on elevating our branding initiatives, further enhancing our e-commerce and distribution channels, as well as investing in our infrastructure to increase operational efficiencies and support the business. Importantly, we believe that these steps will position us to deliver sequential improvement beginning in the second quarter of the year.”

Marchionni, who joined the company last year, has been seeking to attract new, “more-style-conscious consumers while holding on to the company’s traditionalist core,” according to The Milwaukee Journal Sentinel.

Lands’ End spring collection will feature “freshly updated styles and fits” and “an elevated aesthetic that we believe will be compelling to both loyal and new customers,” Marchionni said in an earnings conference call.