Financial Performance

Lands’ End Swings to Profit, Shares Climb 12%

The retailer's same-store sales fell 1.3% but it says the momentum from Q3 carried through to the Thanksgiving holiday period.
Matthew HellerDecember 5, 2017

Lands’ End shares jumped nearly 12% on Wednesday after the struggling apparel retailer posted its first quarterly profit in two years, reflecting a strong performance from its online and catalog unit.

For the third quarter, Lands’ End swung to a net profit of $162,000, or 1 cent per share, from a loss of $7.2 million, or 23 cents a share, a year ago.

Net revenue rose 4.5% to $325.5 million though same-store sales, a key metric for retailers, fell 1.3% after a 2.1% increase in the second quarter. In trading Wednesday, Lands’ End shares rose 11.9% to $13.20.

“We were pleased with the continued momentum in our business in the third quarter, which carried through the Thanksgiving to Cyber Monday period,” CEO Jerome Griffith said in a news release.

“Overall, as we continued to execute on our strategic initiatives, we stabilized the business and laid the foundation to enable us to capitalize on the opportunities that lie ahead,” he added. “We are now focused on building off of this momentum and our strong position as a customer-centric, multi-channel, online organization as we work to drive consistent revenue and earnings growth over the long term.”

Lands’ End said net revenue from its direct segment, including catalog and e-commerce, increased 6.7% to $290.3 million, while retail segment net revenue 10.8% to $35.1 million, primarily due to fewer Lands’ End stores at Sears.

Since taking over at Lands’ End in March, Griffith has focused on expanding the company’s e-commerce team and opening additional standalone stores. His predecessor, Federica Marchionni, tried unsuccessfully to give a more fashion-forward spin to Lands’ End with the Canvas line of slimmer-fitting, more stylish and pricier apparel.

“I believe that we are uniquely positioned as a highly recognized American Heritage Brand operating in the heartland of the country, representing strong family values and offering a great value proposition,” Griffith said Wednesday in an earnings call.

He told analysts that the third quarter saw a strong performance in Lands’ End’s outerwear, bottoms, men’s knit tops, women sweaters, and home categories.