- Angela Gonzalez-Rodriguez |
U.S. apparel brand Lands' End Inc. (LE) noted a 26.11 percent increase in stock’s value right after posting 39.8 million dollars profit, or 1.24 dollars a share for its fiscal fourth quarter. These compare against a loss of 94.8 million dollars, or 2.96 dollars a share, in the same period a year ago.
Lands’ End closed out 2017 on an upbeat note, with its first 12-month profit since 2014, and its CEO attributes the positive numbers to increasing its online customer base in the United States.
“We’re making tremendous progress,” CEO Jerome Griffith said. He said most of the gains have come from Lands’ End’s online shoppers from the U.S. “We put a lot of work into that, with user experience upgrades and more efficient use of digital marketing,” he said.
The clothing and accessories company has being amongst the first to benefit from the country’s new tax legislation, enjoying a 21.9 million dollars plus. Revenue for the quarter ended on February 2 went up from 58.8 million to 510.6 million dollars, versus FactSet’s average estimate of 471 million dollars revenue.
Although retail segment revenue fell 8.7 percent to 55.1 million dollars on the back of Sears’ closures – the brand was sold at the burst department store chain -, as that means fewer Lands' End shops, direct segment revenue rose 14.3 percent to 455.6 million dollars.
The company’s shares have dropped 14 percent over the past three months, poorly fairing when compared against the S&P 500 SPX, which has gained 1.1 percent. On the upside, investors cheered such a strong set of financials, sending Lands’ End’s stock up 26 percent on the day the earnings were released.
In addition to the second consecutive quarterly profit, this is Lands’ End’s third straight quarter of sales growth after 11 consecutive quarters of sales declines. A big reason for the increase is the addition of new customers — 30 percent more than in the 2016 fourth quarter, the fashion company’s CEO said.
Going back to roots, key to the future of Land’s End
“We have been able to stabilize the brand, really by returning to our roots,” the company’s chief executive explained to analysts.
Griffith who became CEO one year ago, took the helm of Lands’ End calling out that it was “a heritage brand with a great value proposition” and sharing his plans to open more brick-and-mortar stores.
The company has 11 of its own stores, including one in Madison. The number of Lands’ End Shops within Sears stores has been steadily shrinking, ending the year at 174, down 42 from a year ago. Leases for the remaining Sears locations will expire over the next two years.
In a recent interview Griffith advanced he expects to open the first new Lands’ End stand-alone store in late April or early May, in the Chicago area. He said he plans to launch four to six stores in 2018, with the potential of 40 to 60 new stores within five years.
Photo:Land’s End Web