Lands' End Earnings Make An Impressive Start, Stock Jumps 8% - Analyst Blog

Lands' End, Inc. (LE) reported its first earnings results after coming into existence following the spin-off from Sears Holdings Corporation SHLD on Apr 4, 2014. Yesterday, the company's share price gained 8.2% after the release of fiscal first-quarter 2014 (ended May 2) results.

Earnings came in at 34 cents per share, reflecting an increase of 48.1% year over year.

Revenues

Total revenues generated were $330.5 million, up 3.6% year over year. Lands' End reports financial results under the heads discussed below:

Revenues from the Direct segment were $276.0 million, up 4.8% year over year and representing 83.5% of total revenue. The Retail segment produced revenues of $54.4 million, down 2.3% year over year. Revenues from Corporate/Other segment were $12 million versus $13 million in the prior-year quarter.

Costs/Margins

Lands' End's cost of sales climbed 2.4% year over year and represented 51% of total revenue, down from 51.5% reported in the year-ago quarter. Selling and administrative expense, as a percentage of total revenue, were 41.8% versus 42.9% recorded in the year-ago quarter.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $23.8 million, up from $17.6 million in the year-ago quarter.

Balance Sheet/ Cash Flow

Exiting fiscal first-quarter 2014, Lands' End had cash and cash equivalents of $68.3 million versus $25.7 million recorded in the previous quarter. Long-term debt was roughly $509.9 million.

Lands' End generated cash of $31.4 million from its operating activities, up from $19.5 million in the prior-year quarter. Capital expenditure surged 89.2% year over year to $1.5 million.

Lands' End has a $920.7 million market capitalization. Some stocks worth considering in the retail industry include PC Connection, Inc. PCCC and Gaiam Inc. GAIA. Both PC Connection and Gaiam hold a Zacks Rank #2 (Buy).