Lands’ End Q2 loss widens, revenues drop

Lands’ End, Inc. second quarter net revenue decreased 7.9 percent to 323.3 million dollars.

The company’s net loss widened to 8 million dollars or 25 cents loss per diluted share and adjusted EBITDA remained flat at 15.8 million dollars.

Commenting on the trading update, Andrew McLean, the company’s chief executive officer, said in a release: “Our strong second quarter was characterised by a return to operating disciplines with a solutions focus on the customer. That resulted in a significant 220 basis point year-over-year improvement in gross margin, a 30 percent year-over-year reduction in our inventory position and adjusted EBITDA in line with the prior year and guidance.”

Lands’ End second quarter financial highlights

The company’s global ecommerce net revenue was 218.7 million dollars, a decrease of 8.7 percent. U.S. ecommerce net revenue decreased 3.6 percent, international ecommerce net revenue decreased 37.3 percent and Europe ecommerce net revenue decreased 20.8 percent.

Outfitters net revenue was 68 million dollars, a decrease of 3.8 percent, primarily driven by the conclusion of the Delta Air Lines contract in the first quarter 2023 partially offset by school uniform revenue increasing high single-digits year-over-year. Excluding the 4.9 million dollars difference from the Delta Air Lines business, revenue for the Outfitters business increased by 3.5 percent.

Third Party net revenue was 24.4 million dollars, a decrease of 10.6 percent due to weaker than expected online demand performance at Kohl’s partially offset by continued growth of marketplace sales through Target, Macy’s and Amazon.

Gross profit was 139.6 million dollars, a decrease of 4.4 million dollars or 3.1 percent, while gross margin increased approximately 220 basis points to 43.2 percent.

Lands’ End announces Q3 and FY23 outlook

For the third quarter, the company expects net revenue to be between 340 million dollars and 355 million dollars, net loss to be between 6.5 million dollars and 4 million dollars, diluted loss per share to be between 20 cents and 13 cents and adjusted EBITDA in the range of 13 million dollars to 16 million dollars.

For fiscal 2023, the company now expects net revenue to be between 1.50 billion dollars and 1.55 billion dollars, Net loss to be between loss of 4.5 million dollars and income of 1 million dollars, diluted loss per share to be between negative 14 cents and positive 3 cents and adjusted EBITDA in the range of 77 million dollars to 84 million dollars.