Lands’ End, Inc ((LE)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Lands’ End, Inc. revealed a mixed sentiment among stakeholders. While the company celebrated achievements in its B2B segment, licensing, and innovative product lines, it faced challenges with a decline in total revenue, European sales, and an adjusted net loss.
Strong Performance in B2B Business
The B2B segment emerged as a bright spot for Lands’ End, showcasing growth in both top and bottom lines. The commercial uniform side delivered significant results, and the school uniform segment saw high single-digit revenue increases, underscoring the strength of this business area.
Expansion in Licensing and Third-Party Marketplaces
Lands’ End experienced a 19% year-over-year increase in licensing revenue, reflecting the brand’s growing visibility. The third-party marketplace business also thrived, with a 14% growth, driven by strong performances at Macy’s and a record-setting prime week on Amazon.
Innovative Product Lines and Strong Customer Engagement
The company’s launch of the Lands’ End Essentials line on Amazon and the success of new product lines, such as embroidered jeans and expanded barrel leg fit, have significantly boosted customer engagement and sales.
Gross Margin Improvement
Despite facing revenue challenges, Lands’ End improved its gross margin by approximately 90 basis points compared to the previous year. This improvement was driven by full-price selling and the expansion of the licensing business.
Decrease in Total Revenue
Total revenue for the second quarter was reported at $294 million, marking a 7% decrease compared to the same period last year. U.S. E-commerce sales also saw a decline of 11%.
Supply Chain Challenges in Europe
European sales decreased by 15% year-over-year, impacted by supply chain challenges on key seasonal products and broader macroeconomic pressures.
Adjusted Net Loss
The company reported an adjusted net loss of $1.9 million, or $0.06 per share, for the second quarter, with an 18% year-over-year decrease in adjusted EBITDA.
Forward-Looking Guidance
Looking ahead, Lands’ End projects net revenue for the third quarter to be between $320 million and $350 million, with adjusted EBITDA ranging from $24 million to $28 million. For the full fiscal year, the company expects net revenue between $1.33 billion and $1.4 billion, with adjusted EBITDA projected to be in the range of $98 million to $107 million.
In summary, Lands’ End’s earnings call presented a mixed picture, with notable successes in B2B and licensing offset by challenges in revenue and European sales. The company’s forward-looking guidance suggests a cautious optimism, with expectations of growth in the coming quarters.