Lands' End Posts Upbeat Q1 Earnings, But Sales Miss Views

Lands' End, Inc. LE reported better-than-expected earnings for the first quarter, but the company's sales missed analysts' estimates. The Dodgeville, Wisconsin-based company posted quarterly net income of $1.7 million, or $0.05 per share, compared to $10.9 million, or $0.34 per share, in the year-ago quarter. Its merchandise sales and services, net fell 9.4 percent year-over-year to $299.4 million from $330.5 million. However, analysts were expecting a profit of $0.03 per share on revenue of $320.5 million. The average estimate among 3 Estimize users was for earnings of $0.73 per share and revenue of $437.02 million. Direct segment merchandise sales and services, net dropped 8.2 percent to $253.4 million, while merchandise sales and services, net in the retail segment slipped 15.5 percent to $46.0 million. Its same store sales in the retail segment dipped 12.1 percent in the quarter. Its gross margin came in unchanged at 49.0 percent in the latest quarter. Operating income slipped to $8.5 million from $18.8 million. Adjusted EBITDA fell 45.2 percent to $13.1 million in the first quarter, versus $23.8 million in the year-earlier period. At the end of the first quarter, cash and cash equivalents was $177.8 million, versus $65.0 million on May 2, 2014. Federica Marchionni, Lands' End's Chief Executive Officer, said, "While our first quarter results reflect a challenging retail environment, I feel privileged to be leading Lands' End into the future and excited about our opportunities for growth…While there is certainly work to be done, the Company has the powerful elements to be a meaningful global lifestyle brand over time. The next 12 to 18 months will be an important transformational period where we will be focused on upgrading the product design and development process, enhancing our technology platform, fostering brand awareness, exploring new distribution opportunities, strengthening operations and integrating new talent throughout the organization." Lands' End shares gained 0.53 percent to close at $28.70 yesterday.