• Linkdin
Lands' End Announces Second Quarter Fiscal 2022 Results
01
Sep '22

DODGEVILLE, Wis., Sept. 01, 2022 (GLOBE NEWSWIRE) Lands’ End, Inc. (NASDAQ: LE) today announced financial results for the second quarter ended July 29, 2022.

Jerome Griffith, Chief Executive Officer, stated, “We are very pleased with our performance this quarter, exceeding our revenue and profit expectations. Despite global supply chain and consumer challenges, our teams continue to successfully navigate these challenges. Our performance this quarter across our four strategic growth pillars – product, digital, uni-channel distribution, and infrastructure – gives us confidence in the long-term opportunity ahead.”

Second Quarter Financial Highlights:       

  • For the second quarter, net revenue decreased 8.6% to $351.2 million compared to $384.1 million in the second quarter of fiscal 2021.
    • Global eCommerce net revenue decreased 16.0% for the second quarter. Net revenue in U.S. eCommerce decreased 14.4% and International eCommerce decreased 23.9%, both driven by delayed receipts of key products due to global supply chain and continued macroeconomic challenges.
    • Outfitters net revenue increased 7.7%, attributed to stronger demand within school uniform households and national accounts.
    • Third Party net revenue increased 42.9%, primarily attributed to growth in the Kohl’s online marketplace, and growth in other new and existing online marketplaces.
       
  • Gross margin decreased approximately 530 basis points to 41.0%, compared to 46.3% in second quarter of fiscal 2021. The Gross margin decline was attributable to an incremental $11.7 million of transportation costs as a result of global supply chain challenges, in addition to increased promotional activity and margin mix from growth in our Third Party business.
     
  • Selling and administrative expenses decreased $8.0 million to $128.6 million or 36.6% of net revenue, compared to $136.6 million or 35.6% of net revenue in second quarter of fiscal 2021. The approximately 100 basis points increase was driven by deleverage on lower sales partially offset by continued expense controls.
     
  • Net loss was $2.2 million, or $0.07 loss per diluted share. This compares to Net income of $16.2 million or $0.48 earnings per diluted share in the second quarter of fiscal 2021.
     
  • Adjusted EBITDA decreased to $15.8 million compared to $41.4 million in the second quarter of fiscal 2021.

Second Quarter Business Highlights:        

  • The Company exceeded its profit expectations despite the ongoing global supply chain challenges, changing consumer landscape and difficult macroeconomic conditions.
  • Continued to expand its Third Party business with a strong growth in existing and new online marketplaces.
  • Outfitters business experienced strong demand across its school uniform households and national accounts.

Balance Sheet and Cash Flow Highlights

Cash and cash equivalents were $23.5 million as of July 29, 2022, compared to $39.2 million as of July 30, 2021.

Inventories, net, was $569.2 million as of July 29, 2022, and $464.3 million as of July 30, 2021.

Net cash used in operations was $117.5 million for the 26 weeks ended July 29, 2022, compared to net cash provided by operations of $30.5 million for the 26 weeks ended July 30, 2021. The increase in Net cash used in operations was primarily attributable to earlier receipts and in-transit shipments for fall and holiday inventory compared to prior years and increased transportation costs due to the global supply chain challenges.

As of July 29, 2022, the Company had $135.0 million of borrowings outstanding and $126.2 million of availability, based upon the loan cap calculated in the borrowing base under its asset-based senior secured credit facility, compared to $25.0 million of borrowings as of July 30, 2021. Additionally, as of July 29, 2022, the Company had $250.9 million of term loan debt outstanding compared to $264.7 million of term loan debt outstanding as of July 30, 2021.

During the second quarter, the Company repurchased $2.4 million of the Company’s common stock under its previously announced $50 million share repurchase program.

Outlook

Jim Gooch, President and Chief Financial Officer, stated, “We are pleased to have delivered profitability ahead of our expectations despite continued supply chain challenges and macroeconomic factors impacting our customer. Despite these ongoing industry-wide challenges, we remain confident in our digitally-led business model and our ability to execute on our strategic initiatives.”

For the third quarter of fiscal 2022 the Company expects:

  • Net revenue to be between $375.0 million and $390.0 million.
  • Net income to be between $1.0 million and $4.0 million and diluted earnings per share to be between $0.03 and $0.12.
  • Adjusted EBITDA in the range of $20.0 million to $24.0 million.

This third quarter outlook assumes approximately $9.0 million of incremental transportation expenses due to the global supply chain challenges.

For fiscal 2022 the Company now expects:

  • Net revenue to be between $1.60 billion and $1.64 billion.
  • Net income to be between $16.5 million and $23.5 million, and diluted earnings per share to be between $0.49 and $0.70.
  • Adjusted EBITDA in the range of $95.0 million to $105.0 million.
  • Capital expenditures of approximately $37.0 million.

This full year outlook assumes approximately $35.0 million of incremental transportation expenses due to the global supply chain challenges and gross margin improvement in the second half of the year, as higher supply chain costs are lapped.

About Lands’ End, Inc.

Lands’ End, Inc. (NASDAQ:LE) is a leading uni-channel retailer of casual clothing, accessories, footwear and home products. We offer products online at www.landsend.com, through our own Company Operated stores and through third-party distribution channels. We are a classic American lifestyle brand with a passion for quality, legendary service and real value. We seek to deliver timeless style for women, men, kids and the home.

-Financial Tables Follow-

LANDS’ END, INC.
Condensed Consolidated Balance Sheets
(Unaudited)

(in thousands, except per share data)   July 29, 2022     July 30, 2021     January 28, 2022*  
ASSETS                        
Current assets                        
Cash and cash equivalents   $ 23,505     $ 39,223     $ 34,301  
Restricted cash     2,091       2,102       1,834  
Accounts receivable, net     40,917       30,203       49,668  
Inventories, net     569,174       464,291       384,241  
Prepaid expenses and other current assets     39,267       31,127       36,905  
Total current assets     674,954       566,946       506,949  
Property and equipment, net     124,626       136,714       129,791  
Operating lease right-of-use asset     32,115       33,989       31,492  
Goodwill     106,700       106,700       106,700  
Intangible asset     257,000       257,000       257,000  
Other assets     3,760       4,347       4,702  
TOTAL ASSETS   $ 1,199,155     $ 1,105,696     $ 1,036,634  
LIABILITIES AND STOCKHOLDERS’ EQUITY                        
Current liabilities                        
Current portion of long-term debt   $ 13,750     $ 13,750     $ 13,750  
Accounts payable     236,015       211,916       145,802  
Lease liability – current     6,720       5,437       5,617  
Other current liabilities     101,015       130,285       146,263  
Total current liabilities     357,500       361,388       311,432  
Long-term borrowings under ABL Facility     135,000       25,000        
Long-term debt, net     228,948       240,020       234,474  
Lease liability – long-term     32,333       35,912       32,731  
Deferred tax liabilities     45,516       47,469       46,191  
Other liabilities     4,913       6,084       5,110  
TOTAL LIABILITIES     804,210       715,873       629,938  
Commitments and contingencies                        
STOCKHOLDERS’ EQUITY                        
Common stock, par value $0.01 authorized: 480,000 shares; issued and outstanding: 33,202, 32,981 and 32,985, respectively     332       330       330  
Additional paid-in capital     371,245       370,353       374,413  
Retained earnings     39,947       30,086       44,595  
Accumulated other comprehensive (loss)     (16,579 )     (10,946 )     (12,642 )
TOTAL STOCKHOLDERS’ EQUITY     394,945       389,823       406,696  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 1,199,155     $ 1,105,696     $ 1,036,634  

*Derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2022.

LANDS’ END, INC.
Condensed Consolidated Statements of Operations
(Unaudited)

    13 Weeks Ended     26 Weeks Ended  
(in thousands, except per share data)   July 29,
2022
    July 30,
2021
    July 29,
2022
    July 30, 2021  
Net revenue   $ 351,178     $ 384,109     $ 654,843     $ 705,406  
Cost of sales (excluding depreciation and amortization)     207,141       206,320       381,631       379,880  
Gross profit     144,037       177,789       273,212       325,526  
       

 

(This story has not been edited by Fibre2Fashion staff and is published from a syndicated feed.)


news category


Related Categories:


Advanced Search