Lands' End Shares In Freefall After Q2 Earnings Miss, Gloomy Q3 Outlook

Lands' End Inc (NASDAQ:LE) reported a second-quarter FY23 sales decline of 7.9% year-on-year to $323.3 million, missing the analyst consensus estimate of $328.2 million.

Global eCommerce revenue decreased 8.7% Y/Y to $218.7 million.

Net revenue in U.S. eCommerce fell 3.6% driven by continued promotional productivity within swim and adjacent product categories, and International eCommerce declined 37.3%.

Adjusted EPS loss of $(0.25) missed the consensus of $(0.11). The gross margin expanded by 220 basis points to 43.2%, and the gross profit declined 3.1% Y/Y to $139.6 million.

Operating margin was 1.7%, and operating income for the quarter increased 4.6% to $5.8 million.

The company held $26.6 million in cash and equivalents as of July 28, 2023. Cash provided by operating activities for six months totaled $54.8 million.

Inventories as of July 28, 2023, totaled $396.1 million, a 30.4% decrease Y/Y.

Adjusted EBITDA remained flat Y/Y at $15.8 million.

Outlook: Lands' End sees Q3 sales of $340 million - $355 million against an estimate of $390 million and EPS of $(0.20) - $(0.13) versus an estimate of $(0.05).

The company sees FY23 sales of $1.50 billion - $1.55 billion with an estimate of $1.59 billion; EPS of $(0.14) - $0.03 against the consensus estimate of $(0.05).

Price Action: LE shares are trading lower by 21.3% at $8.06 on the last check Thursday.

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